The topic of cloud computing has dominated much of the networking discussions this year. More often than not, the discussion quickly turns to the mega providers. Amazon, Google and Microsoft lead the list of data center service providers who want to be your cloud solution providers. AT&T, BT and Verizon lead the list of Internet service providers who are challenging that model by moving from interconnect providers to Internet destinations. Conversely, the Value Added Resellers (VARs) and small System Integrators (SIs) are often identified as the most likely victims of the cloud era. I have an alternative view of how the cloud era will unfold, where VARs and SIs continue to play a critical and differentiated role.
VARs and SIs have been the unquestioned dominant provider of infrastructure solutions for the commercial mid-market over the past two decades. Through all the twists and turns in the IT world over this period, these organizations have demonstrated business savvy and agility as they have evolved their business models to increase their value add and provide the necessary complementary capabilities for mid-market IT departments. While I agree they may be facing their most significant challenge right now, I am confident that top channel partners will, as they have time and time again, weather this storm and come through it with even greater strategic importance to their customers.
The formula for success, for the VARs and SIs that have thrived, is to anticipate their customers’ strategic IT needs and do a better job of precisely delivering business value than any other provider. These channel partners have provided a buffer between the lock-in architectures of some vendors and their customers’ specific business situation. They have been consultants, advisors, dispassionate analysts and genuinely trusted partners to their customers. As a result, their customers have been successful and have enjoyed better solutions because they were able to opt for best-of-breed open architectures from multiple vendors. As the industry moves toward more and more cloud architectures, we are seeing the top VARs and SIs acting as cloud hosters and consultants.
Due to the inherent nature of these VARs vertical focus and defined geographic service area, they are perfectly positioned to deliver mid-market customers the personal touch that large service providers are not inclined to deliver. They are able to look at small local boroughs and create points-of-presence for cloud-based services that make sense for very short-haul low-latency needs. Ultimately, VARs have a relatively simplified model that is hinged on very intimate and trusted direct touch with the customer. It’s one thing to create products and solutions, but being able to cultivate a long-term trusted partnership requires capabilities the VAR has excelled at for years.