Executive Corner, Part V

Cloud is a top priority for Solution Providers

Solution providers state that growing their cloud practice is one of their top four initiatives to improve their business in 2019, according to IPEDs Partner Enablement Study. Services strategy is tied closely to cloud success. Building cloud skills and bundling services in cloud engagements has become a significant source of growth and profit for solution providers.

So, where and how are solution providers investing? IPED Channelytics' Public Cloud Provider Channel Impact Study sheds light on how your peers are capitalizing on the move to cloud.

Solution providers embrace the cloud but are cautious.

Solution providers see the cloud as a growing part of their overall opportunity. Forty-five percent of solution providers say they've seen a large/moderate increase in adoption of cloud services within their customer base, and an even higher 52% expect a large/moderate increase in the future. In general, half of the solution providers state that cloud platform providers will have a high impact on their business in 2019.

At the same time, some are hesitant. Many continue to see cloud platform providers as a competitive threat to their business. Half of the partners polled said they saw Amazon Web Services (AWS) as a competitive threat, about the same as Microsoft Azure, with only 36% viewing Google as their competition.

Choosing the right partners is critical.

Picking the right partnership is crucial for success. As it turns out, your peers are turning to different cloud partnerships for particular reasons. Research shows that the three major hyperscaler platform providers, Microsoft Azure, Amazon Web Services, and Google, lead in different and complementary segments of the market.

AWS dominates the space where customers are using the cloud for a wide variety of workloads across the entire enterprise. Microsoft Azure is more prevalent where customers have moved beyond an initial cloud deployment and are expanding cloud to multiple workgroups and divisions, while Google is the primary platform where a customer deploys cloud for a single workload or use case.

Source: IPED Channelytics Public Cloud Platform Providers — IT Channel Impact Study 2019

This points to a strategy that may include doubling down on a unique partnership with synergies in your primary customer base or the need for multiple partnerships depending on where your customer is in their adoption of cloud. It will be critical to look across the needs of your customer base to determine which partnerships are right for your business.

Invest in developing skills that support cloud services.

According to IPED Channelytics' Public Cloud Provider Channel Impact Study, cloud services have steadily increased as a percentage of overall solution provider revenue from less than 5% on average in 2013 to just under 15% in 2019. The key to developing these offerings is building the necessary skills. In addition to certifications in the major cloud platforms, security and networking skills have become critical. Your peer solution providers cite network design, security services, and network management services as areas of investment in 2019. Also, specialty areas like analytics and application integration/middleware are noted as areas of investment as cloud becomes a significant platform for business intelligence.

Anchoring these skills investments, certifications are an essential part of taking advantage of cloud programs. Your peers cite being AWS and Microsoft Azure Certified right along-side Cisco and VMWare as top certifications for investment.

Conclusion — Invest both for growth and a hedge.

Customer demand is driving solution provider investment in the cloud. Whether you believe the cloud is a competitive threat to your business or an opportunity, this shift in customer behavior demands continued action. As your revenue continues to shift more to services, cloud skills and certification offer you the flexibility to build offerings around core computing services or as a service provider only, delivering migrations, application development, analytics, or network and security management for your customers' cloud environments.

Jeff Hine

Consultant - IPED, The Channel Company

Jeff Hine is a writer and consultant focused on the issues impacting the IT Channel. Anchored with nearly 15 years of experience as a solution provider, he brings to the table a real-world practical perspective. Throughout his career, he's built IT consulting businesses, sold technology to Fortune 500 firms, led marketing functions, helped launch managed services offerings, and trained hundreds of solution provider executives to expand their cloud businesses. He's currently leading content development for Channelytics, a subscription service harnessing the collective research and knowledge of IPED, a division of The Channel Company. In his spare time, Jeff writes science fiction and is the lead singer in a blues classic rock band.