As cloud adoption continues to surge, traditional channel partners find themselves at a crossroads. What makes cloud such a challenge is that in the past, the channel was focused on selling, or reselling, hardware. Software started appearing on the scene and more recently, cloud.
“A lot of partners are stuck in that legacy mindset and are struggling to adapt to the cloud,” says Julie Noizeux Inder, channel manager at Fortinet South Africa. “For those entrenched in the hardware business, it’s been quite a struggle to adapt to selling what the big hyperscalers are offering.” Noizeux Inder has observed that newer companies – those that have developed their business alongside the cloud – are much more successful in the channel. It’s a simple equation: born-in-the-cloud customers are natural born-in-the-cloud resellers.
“It’s a different kind of channel partner coming into the ecosystem – the mindset is very different,” says Lisa Strydom, Veeam’s senior manager for channel and alliances.
The chosen solutions should not only fit well within the existing ecosystem, but also offer flexibility and scalability to adapt to future needs.
Andrew Bourne, Zoho Africa
Another challenge traditional resellers face is understanding how they can make money in the cloud. “It’s all about profitability. The impression is that the cloud service provider is already providing a service, so, are they going to be profitable?” asks Noizeux Inder. “With the channel, it’s about understanding what kinds of services they can attach to the cloud.” Offering cloud solutions as part of their portfolio can help the channel deliver greater value to customers by combining their existing offerings with a deep understanding of industry-specific needs and challenges. Strydom adds that this is why the channel is also taking more of a consultative role and offering services that go beyond just selling a licence. “It really is about the services because the licensing part is becoming a small piece of the revenue. The services is where it’s lucrative,” she says.
With cloud, the channel also has a role to play in addressing South Africa’s skills shortage. Strydom says many customers, especially small and medium-sized businesses, may not have the internal resources or expertise to effectively manage complex cloud environments and new technologies. Channel partners can step in to provide the necessary skills and support. “Customers also don’t have the time or money to invest in skilling up internal staff in those areas,” she says.
By offering consultative services, partners can act as trusted advisors to guide customers through the transition to the cloud. “Channel partners are more in tune with the evolving needs of regional businesses and can use this expertise to help businesses navigate the complexities of the crowded SaaS market and find a suitable solution that can address their unique operational needs,” says Andrew Bourne, regional head at Zoho Africa.
Cloud cost management is another critical challenge for the channel. While the cloud offers great flexibility and access to cutting-edge technologies, it can also lead to unexpected expenses if not properly managed. “Cloud cost optimisation is essential,” says Strydom, “and partners must assist their customers in effectively managing their cloud environments.”
This involves monitoring for unused or underutilised workloads that could drive up costs unnecessarily. Strydom also emphasises the importance of using tools to regularly assess cloud usage and expenses, ensuring that customers do not receive unexpected bills. By proactively managing these environments, channel partners can help customers maximise the value of their cloud investments while avoiding financial surprises.
A model shift
For Strydom, it’s also about changing how the channel drives business. Traditional channel partners were more focused on capex models, where customers made upfront investments in on-premises technology. However, the move to cloud and opex models presents a challenge for some traditional partners. Cloud and subscription-based pricing favour an opex approach, where customers pay for services on an ongoing basis rather than making large upfront investments. “It’s a complete change in the way they do business, but if you are more agile, you’re actually ahead of much of your competition in that channel space,” says Strydom.
SaaS means success
Adapting to new business models isn’t just about managing costs, it also involves addressing the broader challenges of businesses moving to the cloud. Bourne says that as the pace of digitalisation picks up, channel partners will encounter businesses aiming to digitalise operations across various functions, such as sales, support, and HR. “And as organisations adopt multiple cloud services, partners often face difficulties in integrating all the solutions and implementing them in the customer’s environment,” he says. While loosely integrated solutions can lead to data silos and data management inefficiencies, Bourne suggests that one way to address this challenge is by including integrated SaaS suites in their cloud portfolio.
Integrated SaaS suites like Zoho One, Google Workspace, Microsoft 365, and Salesforce Customer 360 are central to the cloud’s impact on the channel because they represent a shift in how software is consumed and how channel partners must operate. The cloud enables these suites to be delivered efficiently and at scale, while the channel adds value by providing expertise, integration, and customer success. “The chosen solutions should not only fit well within the existing ecosystem, but also offer flexibility and scalability to adapt to future needs,” adds Bourne.
Looking ahead, channel partners must evolve or risk becoming obsolete. “Resellers that are not embracing the cloud are, unfortunately, not aligned to what the market is doing at the moment and I don’t think that’s going to change,” says Noizeux Inder. As Strydom points out: “It’s about becoming more than just a reseller; it’s about being a strategic advisor who can navigate the complexities of cloud environments.” The partners who can adapt quickly, offer real value, and transform their approach will be the ones to secure their future in this ever-changing landscape.
STAYING COMPETITIVE
“The cloud has fundamentally changed the dynamics of the channel. To thrive, channel partners need to move beyond just selling products and start delivering real strategic value to their customers,” says Andrew Bourne, regional head at Zoho Africa. Here are 10 ways channel partners can stay competitive and deliver value in a cloud-first world:
1 Embrace multicloud and hybrid IT Strategies
With the rise of multicloud and hybrid IT environments, channel partners have the opportunity to offer tailored solutions that combine on-premise and multiple cloud infrastructures. The focus should be on flexibility, allowing customers to leverage different cloud providers based on their specific needs for speed, compliance and security.
2 Develop intellectual property and specialised services
Channel partners should invest in creating unique IP that complements their cloud offerings. This approach not only differentiates them in a crowded market, but also provides added value to customers by addressing specific challenges and requirements through specialised services.
3 Focus on customer success
Prioritising customer success is essential for reducing churn and ensuring long-term relationships. Channel partners should act as trusted advisers, guiding customers through the complexities of cloud adoption, integration, and management. This includes providing ongoing support and aligning with customers’ evolving needs.
4 Strengthen collaboration with cloud service providers (CSPs)
Building strong partnerships with CSPs is crucial. Effective collaboration enables channel partners to offer seamless services to customers, particularly in areas like disaster recovery and data management. Choosing CSPs that provide flexibility, strong security, and compliance tools will help maintain a smooth customer experience.
5 Simplify cloud management and Billing
To retain customers and attract new ones, channel partners must simplify the management and billing processes for cloud services. Offering integrated solutions that reduce complexity and streamline operations will make it easier for customers to manage their cloud environments and maximise their investment.
6 Adapt to new business models
As cloud technologies evolve, so must the channel. This means moving away from traditional reselling models to adopt more service-oriented approaches. Channel partners should explore new revenue streams through managed services, subscription-based models, and valueadded services that enhance their cloud offerings.
7 Invest in skills and training
With the rapid pace of change in cloud technology, channel partners need to continually upskill their teams. Investing in training and development ensures that partners have the expertise required to support complex cloud environments and offer high-value services to customers.
8 Leverage data and insights
Utilising data effectively can help channel partners understand customer needs better and predict market trends. By leveraging insights from historical purchasing data and customer behaviour, partners can refine their strategies and offer more personalised, effective solutions.
9 Prepare for a cloud-first world
The future is cloud-centric, and channel partners must be ready to operate in a cloud-first world. This means understanding the nuances of cloud services, staying on top of technological advancements, and continuously innovating to meet the demands of modern enterprises.
10 Build trust and ensure Reliability
In a world where technology is critical to business success, trust is paramount. Channel partners must ensure they provide reliable services, particularly in areas such as data protection and disaster recovery, to build and maintain strong, long-lasting relationships with their customers.
* Article first published on brainstorm.itweb.co.za
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