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AI World Conference & Expo · Boston, MA · December 11-13, 2017

This syndicated post originally appeared at No Jitter - Recent posts by Zeus Kerravala.

At Westcon’s recent Connect event in Orlando, it became
clearer how the channel can adapt models and perspectives
to embrace the cloud and cast fears aside.

Westcon runs a number of “Connect” events throughout the year, and I had the pleasure of speaking at its recent Orlando event as well as at its UC-focused Connect event earlier this year. The theme for the Orlando event was “cloud,” which makes sense given that Westcon acquired a cloud distribution platform called Verecloud earlier this year. The goal of the event was to make the cloud a more integral part of the VAR business model, which is a big change for most channel partners. Cloud UC, in particular, has become a hot topic over the past 24 months as the number of UCaaS offerings has skyrocketed.

After my presentations I had a chance to speak with many of the VARs about the topic of cloud and while almost all of the VARs had great interest in the cloud, the ability to sell and monetize the cloud varied quite a bit from reseller to reseller.

Based on the questions I got at the event and other interviews I’ve done over the past few months, here are some key points the channel needs to consider regarding the cloud as sales strategies are developed:

Treat the cloud as a delivery model, not a solution.
One of the questions I was asked repeatedly was how does one sell the cloud? My answer to this is that the cloud isn’t really something that one can sell. It’s a delivery model, not a product. This may be cliche, but channel partners need to sell solutions and use the cloud as a way to deliver those solutions. One of the resellers I spoke to that had a thriving cloud business told me he rarely mentions or sells the cloud. Instead the cloud is just a means to an end and a way of selling a monthly recurring service.

Partners must engage line of business managers and business leaders.
C-level executives and line of business managers are key decision makers when it comes to cloud services. In some cases, they may be the only decision makers. For the channel, having to interact with this audience can be challenging as the discussion moves away from technology to solving business problems. In a recent interview with a local reseller, the individual told me he can often get meetings with business leaders, but doesn’t always know what to say when he gets it. My advice here is to not be all things to all people. Instead, invest in resources that can help build vertical practices – but start with just a few. In some cases a vendor or distribution partner can be of assistance.

Build a robust set of services.
The majority of organizations today want hybrid environments. For example, it may make sense to stick with a premises-based UC solution for large locations and then use cloud UC for mobile workers and small branches. Hybrid environments are much more complex than the old way of deploying UC where everything was on site. However, this complexity provides opportunity for the channel. I’ve interviewed dozens of channel partners over the past year and the ones that are succeeding are the those that have a robust set of services. I’ve built a taxonomy of services for the cloud, and channel partners can build service practices in the following areas:

  • Professional services
  • Integration services
  • Managed services
  • Application development

There’s no requirement to do all of these, but professional services are becoming mandatory today as a way to move to a more consultative, business-outcome approach.

Figure out compensation changes before rolling out cloud services.
Shifting compensation plans is one of the biggest deterrents in moving to the cloud. When a sales person sells a bunch of infrastructure as a one time sale, he or she is rewarded with a big check. The monthly recurring model of the cloud means that the channel partner gets paid a smaller amount over a long period of time. While this is a necessary shift, channel partners (and vendors) need to be careful to not make this transition too fast since it can disrupt the flow of income of the sales person. I’ve seen many strategies to adjust compensation plans, including forward rolling a cloud service for the term of the contract and paying out a commission up front. Another consideration is “burstable services,” where customers can buy more cloud when needed. This can play havoc with back-end systems and screw up compensation plans even more. Burstable services are great, but ensure the back-end systems are ready before jumping in.

Channel partners don’t need to build cloud services right away.
One of the fears of the cloud is that the partner needs to drop a chunk of money to build a cloud service without knowing how fast the investment will be recouped. If you’re IBM, this isn’t really a concern. If you’re Central Mass Technologies, it’s a big issue. The first step is to determine which cloud services are right for that particular reseller. The next step is to align with a distributor or vendor that has a broad set of services that can be white labeled. The white labeling of an existing set of services can help a channel partner get comfortable with the cloud and build a business around it without incurring the risk of capital outlay.

The last point regarding the cloud is that channel partners need to understand that it’s just a better delivery model for mobile computing. Traditional prem-based equipment was fine when the endpoints were fixed, but mobile devices require service ubiquity and that’s best delivered from the cloud. So channel partners need to embrace the cloud, not fear it, but go into it with an understanding of how it changes the business.

More About Westcon
For those who aren’t familiar with Westcon, the company is a global value added distributor of communications and networking products that include unified communications, network infrastructure, data center and security. The company distributes products to value added resellers (VARs) that aren’t large enough to have a direct relationship with the technology vendors.

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Zeus Kerravala

Zeus Kerravala is the founder and principal analyst with ZK Research. Kerravala provides a mix of tactical advice to help his clients in the current business climate and long term strategic advice.
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