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2015 – The Year of Channel Transformation standard

2015 will be the year in which most major on prem vendors really begin to drive out their cloud channel transformation programs.   The two poles of the transformation are Iaas where the transformation will be lead by HP, IBM, Microsoft, Cisco, and Vmware who all have on-prem channels that need to shift; and in Saas by Oracle, SAP, Microsoft who have a similar need to shift from on-prem to on-demand. Many have begun on this journey, but real scale will be achieved in 2015.   Microsoft is probably ahead of the curve in this regard, and they have been working with their partners for a few years now in helping them migrate their business models: But this year the steady stream ...

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Why is Cloud so Darn Hard for Resellers and Vendors? standard

Right about now, most “born in the cloud” resellers and vendors are smiling to themselves.  Especially when they look at resellers and vendors who grew up in the client/server era and are finding it so hard to embrace the new business and operating models that cloud demands – In many cases requiring a complete re-design and often starting-up from scratch for success. It reflects in many ways the same challenges that people born before 1985 faced when dealing with the Internet, and the change is just as dramatic. With Cloud we are at a new tipping point. In a prior blog, we wrote about the hybrid cloud pivot and why that’s hard.  Selling true cloud, e.g.  multi-tenant, public cloud SaaS ...

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Why Channel Management Sucks standard

Despite trillions of $s flowing through indirect partnerships (including marketing, sales, and support channels across the entire end-user experience for tech vendors), the process of effectively extending cross-functional enterprise processes to build superior business partnerships is broken and manual. Enterprises cannot calculate cause and effect relationships between their investments in business partnerships and the resulting enterprise value achieved. Executives responsible for managing these partnerships are therefore marginalized and lack enterprise political and financial capital.   The processes needed to manage business partnerships cut across marketing, sales, enablement, finance, legal, support and other enterprise processes and involve working with third-parties (and their employees), aka the channel, who are outside of the enterprise command and control governance (unlike a direct sales organization). The ...

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Thoughts on Crossing the Chasm standard

In a recent blog post Geoff Moore makes the case that the Crossing the Chasm Model is still relevant in the 3rd Platform, Social, Mobile, Analytics and Cloud (SMAC) era.  At Channel Cloud Consulting we agree that the Whole Product and Business Ecosystem components continue to be highly relevant.  However we believe that the dynamics of creating an offering and establishing the required go to market ecosystem have changed so profoundly that we might need to revise the way we think of and label these pillars. In today’s marketplace, the concept of a whole product has become far more complex and dynamic.  The Whole Product today needs to take into account Component Services and the Platform(s) that link these services. ...

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Forget About Public Cloud, Hybrid Cloud is Where the Real Game of Thrones is Being Played standard

Recent press has focused on the battle between Google and Amazon for domination of Cloud services, with Microsoft positioned as the third place challenger.  This picture may well be true for Public cloud services, but it ignores the huge market for Hybrid cloud that is arguably where the bulk of enterprise revenues are going.  And this arena is dominated by companies such as HP, IBM, Microsoft and VMware.   All of our recent research points to hybrid as the main area where enterprise buyers are making their investments, particularly taking into account the fact that most private cloud is extended through a hybrid model.  In a recent Channel Cloud consulting survey of more than 350 executives, directors and managers in ...

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The Hybrid Cloud Pivot standard

When it comes to Enterprise Cloud Computing trends, Hybrid Cloud increasingly appears to be the inevitable destination for most future IT business and technical topologies. In spite of the inexorable march toward Public Cloud, IaaS, and multi-tenant SaaS, two things are widely accepted: Many enterprise workloads will remain either within the data center or operating as a single-tenant instance in a private cloud (managed in-house or outsourced). Most enterprises will deploy multiple clouds running on multiple providers across public and private IaaS, SaaS, PaaS, etc. This leaves most IT vendors and most of the channel that they work with at a critical inflection point.  Offerings MUST now incorporate three key stages which build on each other: Based on what we’re ...

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Vertical Industry Platforms – Importance of Vision Alignment standard

In a recent benchmarking study looking at companies exploring vertical industry technology platforms that leverage the power of cloud (XaaS) & Big Data to transform existing value and supply chains and change the axes of competition, we identified a range of key criteria that helped to define market success, including: Vision and Objectives Nature of the offering Organizational Context Marketplace Economics Our work covered a diverse range of industries from financial services, building automation, health care, commerical aviation, automotive to name a few.  Across each of these industries and examples we noticed a number of common themes. Most successful companies have developed a clear view of, and commitment to, their vision for the platform and what it represented for the ...

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Vertical Industry Platforms – Selected Characteristics standard

In a recent benchmarking study we conducted we evaluated a range of companies developing vertical industry platforms to enable the “Internet of Things”.  At a high level, these companies range in two critical dimensions: The nature of their offering and maturity of their efforts. Johnson Controls provides a good example.  JCI Panoptix, a sub-brand of Johnson Controls, offers an open platform solution on which 3rd party developers can offer SaaS solutions.  The goal is to build a community of applications and developers, at least initially related JCI’s Building Automation business (it can be assumed that JCI intends to extend this model to other segments).  The platform integrates data from JCI system sensors and makes that data available to the community.  ...

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From Concept to Reality: Vertical Industry Platforms standard

Over the past two years we are beginning to see the early stage realization of IDC’s projection regarding the 3rd wave of computing:  The rise of vertical industry platforms built to: Facilitate the management and exchange of the huge amounts of data generated by industrial systems  Enable increased flexibility and interdependence of the associated value chain processes.   The elements of such vertical industry platforms include: General Electric’s “Industrial Internet,” initiative, which seeks to create value from the new business model is a great example.  Such activities however aren’t unique to manufacturing, we are seeing them in a range of industries, from healthcare to financial services. Cloud Channel Consulting is currently working with a number of our large clients to ...

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The Business Model Gap standard

It’s been a busy few months for us at Channel Cloud Consulting.  With a recent focus on delivering a number of key projects we haven’t been updating our blog as much as we’d like.  But we’d like to take this opportunity to get back on the scoreboard.   Much of the work we’re doing now is focused on helping companies migrate their business to the cloud.  In a recent survey we conducted, in industries like telecommunications, banking, retail and manufacturing, anywhere from 60 – 75% of the companies surveyed said they are planning on migrating 10% or more of their IT spend to the cloud.  This represents a significant shift in spend, particularly when you consider the fact that most ...

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Process Aware Cloud Infrastructure standard

We are beginning to see buzz around the idea of Process Aware Cloud Infrastructure, from academic articles such as W.M.P. van der Aalst’s recent publication: “Business Process Configuration in The Cloud: How to Support and Analyze Multi-Tenant Processes“ to selected vendor presentations including RedHat’s recent presentation on The Intelligent Cloud Application Infrastructure. These and other publications on the topic point the way to an inevitable outcome of Cloud based IT, a necessary shift in emphasis from supporting and managing IT infrastructure, to business process change and managing business process change.  This driven by a shift in the way users consume IT:      Source:  Redhat The primary enablement for this change as Redhat points out, is through both open API’s that allow for ease ...

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Choosing Your Horse – Which Cloud Vendor to Ride? standard

As in the client/server channel paradigm of yore, Value Added Integrators for Cloud Solutions need to pick the Cloud Vendor horse they wish to ride.  And things get pretty interesting on this front…   The big debate revolves around Open stack vs proprietary platform decisions.  On one hand you have the two big proprietary platforms VMWare (who is going Private to Public) and Amazon (who is going Public to Private).  Both of these vendors offer a lot but there are, not withstanding all the cloud washing, real walled gardens in each of their models. On the open stack side, there options are plentiful.  Dozens of start-ups and early stage companies such as Eucalyptus, Rightscale, ManageIQ, and now Rackspace are offering ...

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Bursting out of the Private Cloud – Big AHA! Moment for the Value Added Integrator Roadmap standard

At Channel Cloud Consulting we agree that Private Clouds are the best route to accelerate the move to Cloud Computing in the enterprise.  With that, comes the recognition that managing Hybrid Clouds (private and public together) presents a unique opportunity for a channel that is mostly seen as ‘going away’ in the cloud era. From a channel roadmap point of view, how does this help and what does it mean?  Historically the channel (since the dawn of PC era) has grown up as an on-prem integrator bringing disparate HW and SW together to form last mile solutions inside of small to large enterprises.  We know the cloud changes all of this and moves the value prop away from on-prem integration to ...

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Ecosystem as a Service: Ecosystem Importance for Vendor/Channel Mgmt. standard

In an effort to add to the alphabet for “X”aaS, we at Channel Cloud Consulting are proposing the addition of “E”aaS for Ecosystem as a Service… Are we taking it too far?  Perhaps not.  Don’t be suprised if you see cloud services popping up that make it easier for service providers and customers to find related services in an attempt to assemble a complete offering or a family of related cloud services. Let’s begin with a little channel management history that puts the notion of Ecosystems into context. In our last post we talked about how the traditional Vendor-Indirect Channel model is giving way to an Cloud-connected Ecosystem model. The Vendor-Indirect Channel model is characterized by a big powerful vendor ...

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Is There Really a Channel for the Cloud? standard

Many pundits have argued that the cloud essentially eliminates the need for a channel.  To some extent, this is an accurate observation, because distribution in the traditional terms “pick, pack, ship, install” is no longer needed.  On the other hand however, all of us know that the value-added services the channel has traditionally provided for on-prem solutions are still important, albeit many services for the cloud are unique and distinct from on-prem services.  At Channel Cloud Consulting we’ve blogged a lot about this. The truth emerging between the two positions, for and against a channel role, is that the channel is shifting from a focus on physical distribution and integration toward a role centered around software value add.  This make ...

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A Solution Provider Cloud Maturity Adoption Model standard

In the course of our work at Channel Cloud Consulting with vendors and partners in the Public Cloud market, we’ve observed that most Solution Providers begin their transition to the cloud by moving through the following Solution Provider Cloud Maturity adoption stages.  For each of these stages, Solution Providers have a context (noted below) that describe their current business related to the cloud. At this point in the evolution of the overall cloud market, and in the evolution of Vendor cloud channel ecosystems, we believe that engagement and resources should be focused where they are most needed.  In our minds, two stages in the maturity model represent a sweet spot for partner engagement and enablement.   1.     Moving partners from awareness ...

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Why Partner Matching Still Makes Sense Especially in Facilitating Delivery of Cloud Solutions standard

To date the large majority of effort on the part of vendors in helping their partners “cross the chasm” to the Cloud, is in delivering enablement materials and tools to help partners make business model and operational changes and to build Cloud practices. These efforts are laudatory, but they ignore a simple opportunity.  Right now there are many small and emerging firms that have been very successful in building out a focus on Cloud, what they lack is the market to grow their business.  At the same time, there are many larger firms, with significant client bases, that represent an opportunity to sell in new Cloud offerings and/or their clients are demanding evaluation and deployment of such offerings. At Channel ...

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Driving Partner Business Model Evolution for Cloud Solutions Through Industry Benchmarks standard

In our last post on ways to enable the channel for cloud solutions and drive partner business model evolution we highlighted two mechanisms of primary importance: Helping channel partners understand emerging business models and develop associated Practices, offerings and marketing tools Creating programs that drive partners to build delivery relationships to fill gaps in their business capabilities and do joint planning with them Right now in the marketplace a number of large vendors such as Microsoft and Cisco are starting to address number one above, with varying degrees of success.  These companies have created well laid out roadmaps for their partners that describe in a proscriptive way what they need to do to build new elements of their business.  Microsoft ...

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Enabling the Cloud Channel standard

In earlier posts we’ve focused a great deal on the new model of channel partner required for vendors to successfully deliver cloud solutions to end customers.  We’ve highlighted a number of shifts currently taking place in the channel, including the increased importance of cloud channel partners (VARs, Consultants and Integrators),  the types of services these partners will need to deliver, and their new business models.  But what we haven’t addressed is how these changes are going to take place and how large vendors can support them.   It is our strong belief at Channel Cloud Consulting that vendors who want to win with the channel should provide concrete enablement and support aligned to the needs of new and existing partners who ...

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Returning to our Roots – Cloud IT as Driver of Enterprise Transformation standard

A common trend over the past decade has been a shift in IT’s focus, from driving innovation in an organization, to managing increasingly complex and expensive systems.  Today one of the most important reasons that companies leverage SIs or VARs to help build, implement and manage technology solutions is that technology is complex and companies need consultants and integrators they trust to help them make effective decisions and run IT (in-house or in the cloud).In spite of this dominant role, it’s ironic to note that many vendors, service and solution providers are currently selling cloud not as trusted advisors but rather as product sales people, e.g., based on price, its inherent technology merits, its “speeds, feeds, features and functionality”, or ...

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Cloud-Delivered Data, 21st Century Electricity standard

In some of our earlier Channel Cloud Consulting blog posts, we touched on the idea that Electricity as a UTLITY is a great historical and economic metaphor for IT as a UTILITY, aka Cloud Computing. On reflection, it seems that one can take the metaphor even further, with the idea that the energy market is also an antecedent to the market for Cloud-Delivered (and Originated) Data, where Cloud Data creates a key source of differentiation and competitive advantage in many industries. Earlier this year, David Linthicum wrote that “CES 2012 should have been called the Cloud Electronics Show“.  His point is that Cloud-Delivered Data is becoming one of the most important components of the electronics value chain, whether in Cars, TVs, or kitchen ...

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The Cloud Integrator/Broker Model standard

We’ve spent considerable time talking about the importance of the channel for cloud and a provided a big picture view on the services categories that will underlie the channel’s value add around the cloud.  Today, we at Channel Cloud Consulting want to lay out a picture of what we think the Cloud Integrator/Broker model is going to look like. To be sure there are some great cloud integrators emerging like GreenPages and INX who are already there or close to rounding out their offerings to be come Cloud Integrator/Brokers, but by and large, most partners still operate their professional and managed services businesses around the in-house data center. (Note that this blog is about IaaS Integrators as there is a separate category ...

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vCloud Integration Manager, ‘connecting’ Services in IaaS standard

In our last Channel Cloud Consulting post, we talked about the ‘services’ that make up IaaS arguing that Vendors, Service and Solution Providers need to get clear on how they add value in the Public Cloud. Advancing the cause, VMware announced vCloud Integration Manager, last month which among other things helps Service Provider and Solution Providers work together.  According to VMware’s Mathew Lodge, vCIM allows Serve Providers to “securely delegate provisioning to resellers. In turn, the resellers can directly and immediately provision and de-provision their own customers (via the API or web GUI), without having to open tickets, send emails or make phone calls.”The key to Solution Provider engagement in driving Public Cloud is the confidence that they can sell, bill ...

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What are the ‘Services’ in IaaS standard

As vendors and channel partners line up their offerings for IaaS, we at Channel Cloud Consulting think its foundational that Infrastructure as a Service be segmented as to what the Service component is. What makes this important is not only that the end customer needs to understand what is being purchased but that vendors and providers need clarity on where and how they will focus their GTM efforts. We’ve segmented IaaS Service component as follows with some definitions and indications of typical providers.  If you are a Cloud Management Vendor, Cloud Aggregator/Distributor, or Service or Solution Provider, three things are imperative regarding your GTM efforts: 1) where will you focus, 2) who will you partner with and 3) what makes your offering competitive/differentiated. So, ...

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White Label, channel model, a better way to IaaS standard

We recently chatted with Josh Mariea and Luke Norris, execs at PeakColo about their focus on a white label offering as THE way to incentivize traditional VARs, SIs and MSPs to push Hosted IaaS.  See our Channel Cloud Consulting post below on The Channel for IaaS for context. White Label solutions help VARs overcome two of their three big barriers in pushing Hosted IaaS: VARs lose the HW/SW/Services drag if they push hosted cloud over the on-premise data center. VARs lose control of the customer, since the Service Provider (for IaaS) or SaaS provider (Office365) own the account, especially if the hoster bills and offers first line support, which is typical. VARs don’t really have a business model for selling another providers hosted IaaS, ...

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The IaaS Continuum, the journey from Private to Public Clouds standard

PWC published a study last year on the Future of IT Outsourcing and Cloud Computing, we checked it out because we continue to believe that the Virtual Private Cloud (VPC) is the ticket to unlock and tip the market toward IT as a Utility.  See my earlier Channel Cloud Consulting blog post here. PWC argues, no surprise that the Cloud will have a profound effect on how Corporate IT from SMB to Enterprises will manage their IT infrastructure.  The graphic below suggests that within 3 years, nearly 2/3rds of all IT infrastructure will run on Private and Public clouds. What’s more interesting is that 39% of all IT infrastructure will be managed by a Service Provider (in either a Private or ...

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Who has the biggest IaaS business? standard

It’s conventional wisdom that Amazon EC2 is the 800 pound gorilla in the IaaS Business right? Ironically, I think they have about $800 million worth of annual revenues. Well, guess what, that’s not right. In fact it’s VMware add its ecosystem of the cloud Service Providers, who all told have well over $1 billion of annual revenue in IaaS that is the real “biggie” in this market. Okay, I get it, VMware is not really a Service Provider, but it is their hybrid cloud strategy and the vCloud reference architecture that has brought big players like Savvis, Colt, Softbank and a whole host of niche Service Providers like PeakColo, ILand, Bluelock and Tier3 to rally around the vCloud standard. Imagine ...

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Channel Services for the (IaaS) Cloud standard

In our last Channel Cloud Consulting post, we argued that the creation of channel partners (aka VARs, SIs, MSPs, consultants) focused uniquely on the cloud is a key ingredient to driving the cloud tipping point for companies and the industry.  For purposes of discussion, let’s call this category of channel partners “Cloud Integrators.” This post will focus on IaaS, although SaaS and PaaS Cloud silos will each have their own group of cloud-based services that will require pairing Cloud Integrators with Cloud Service Providers.  Cloud Integrators will help turn cloud offerings/products that fit the need of a group of users (work load) into cloud solutions that meet the IT requirements of whole businesses. Even though there are already $Bs spent on ...

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The Channel for Cloud standard

In the endless sea of pontification about the cloud and its impending dominance as the central force driving IT transformation, one CRITICAL thing is forgotten and that is the role of the channel. Some people say you don’t need a channel, even Bessemer Venture Partners, revered as ‘writing the business model book’ on the cloud misses the point in its LAW #4 when it says, “(software channels)… aren’t much help to Cloud businesses.”  They go onto to say that some cloud companies might achieve some benefits leveraging business services channels and emerging players like Appirio, but the message is you don’t really NEED a channel if you fully leverage the internet. At Channel Cloud Consulting, we believe that the emergence of a ...

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How VPC Advances the ‘Tipping Point” to IT as a Utility standard

We at Channel Cloud Consulting think one of the best examples for how Virtual Private Cloud (VPC) will advance the tipping point to pure Public Cloud and away from in-house data centers is CSC’s BizCloud. CSC is certainly not the only game in town for VPC.  Amazon, Rackspace, AT&T and others offer a VPC.  But CSC is perhaps the most robust, at least according to Gartner CSC does a great job of contrasting Private and Virtual Private Clouds.  CSC is built on VMware’s vCloud reference architecture which means that the seamless private-hybrid-public feature set is in place. It’s a simple story, for garnering all the advantages of the ‘Utility’ of Public cloud: Off-load capital Load Balancing to avoid over or under capacity Lower cost ‘as a service’ makes IT ...

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“Virtual” Private Cloud (VPC), going beyond the conventional view standard

An IBM analyst wrote this good but conventional article about the Private Cloud and how its the next ‘new’ thing in IT. Here was our Channel Cloud Consulting reply: I agree with most of your comments Marcus, but one angle that I think you are missing is the notion of how a ‘Virtual’ private cloud eliminates the need for much if any IT in-house. Once enterprise companies digest that there is an opex alternative to in-house data centers and that the VPC gives them the control that they want, we predict a massive migration away from owning an IT plant, exactly as companies dumped their in-house electrical generating plants 100 years ago once the Public Utility model achieved its economies of centralized ...

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The dominance of IT as a UTILITY, history part 2 standard

Has anyone heard of a guy named Charles S Bradley? He filed a patent in 1888 for the rotary converter that basically lead to the creation of a Hybrid Cloud and ultimately the dominance of a Public Cloud in formation of the Electrical UTILITY business. You are probably asking, what does this have to do with the IT Cloud (aka IT as a UTILITY)?  Well, its an example of how a Network Technology (Economics term not IT Term) accelerated the Economies of Centralized Supply in my GENESIS post from March 7th. Hang in there, this is cool and worth considering even if its a bit esoteric and ‘historical.’  We can learn a lot about where the IT Cloud UTILITY is ...

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Genesis standard

Here at Channel Cloud Consulting, we are taking a look back at the history of cloud computing, but first at an understanding of how to put cloud computing into context. Its easy to lose the forest for the trees by considering how Cloud Computing evolved from timesharing and outsourcing and utility and grid computing before understanding what Cloud Computing really is. Then, what is Cloud Computing?  We believe that it is the confluence of Economic and Technological forces built around the creation of “Economies of Centralized Supply.”  It;s about the development of IT as a “UTILITY,” to use the economics term.  Special thanks to Nicholas Carr and his book the Big Switch from which the following logic is a summary: So,  what does it mean ...

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