The Cloud Channel Matures

cloud channel summitThis week I attended the the Cloud Channel Summit, hosted by THINKstrategies and the Cloud Showplace. The tagline of the conference was: Learn. Network. Capitalize. And that’s exactly what the day was about. 100% focused on “partnering for success in the cloud,” attendees focused on networking and sharing channel best practices. While there was a hashtag – #ccs13, people were much more interested in connecting on LinkedIn. There was even a speed networking session run by the SIIA, which I have to say was a great forcing function to get connected. Here are some of my notes/observations from the day:

Jeff Kaplan kicked off the day outlining the possibilities and obstacles of partnering in the cloud. The tone was set early – technology companies born in the cloud get it. Legacy on-premises vendors, and the channels developed around them, are still trying to figure it out. The good news is that the global systems integrators, with their traditional business models, are making big bets. Accenture is a Diamond sponsor at Dreamforce. Deloitte is all in on “the hyper-hybrid clouds.” But most of the messaging at the conference was focused on independent software vendors (ISVs) and how they should think about (or re-think as the case may be) partnering in what my friends at Zuora call The Subscription Economy.

photo 1Tim FitzGerald from Avnet Technology Solutions delivered a keynote presentation on the cloud channel. He made some great points about establishing a documented growth plan for your strategic partners and emphasized that cloud channel partners should have their own IP. He recommended the book, Consumption Economics and compared the traditional upfront CAPEX model and the monthly recurring revenue (MRR) cloud model to selling cars versus selling insurance. The cloud ecosystem is changing and a key message from Tim was that vendors must establish strong on-prem and off-prem muscles in today’s hybrid IT world.

Marketplaces were a hot topic at this year’s summit. I thought this was one of the better panel discussions as it featured representatives from Pivotal, Comcast Business Services, Cox Communications, Box and AppDirect. Whether your marketplace is vertical or horizontal, there was general consensus that rep-assisted sales still make all the difference in a B2B marketplace. Don’t consider a marketplace as a completely self-service channel. Having a curation function was identified as the key ingredient to helping prospective buyers know what marketplace apps do and what benefits they can deliver. The conversion moved towards bundling of multiple apps in a cloud service broker type of model. This is a topic that came up multiple times throughout the day.

Ron Huddleston from Salesforce delivered the second keynote of the morning. He briefly reviewed his 5 Steps to Building a Successful Channel Program and zeroed in on what he calls “The Last 10 Yards to Success.” The main message was “focus on winning the user, not the deal.” He emphasized the importance of user experience (UX) to customer adoption (a message we’ll likely be hearing at Dreamforce), and also pointed to multiple ISV partners coming together to form a true customer solution. One of his slides had the headline (see image below): “Complementary Solutions Grow Faster When they Band Together.” Cloud integration, anyone?

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The PaaS Industry Roundtable featured an interesting admission from Google – unlike most cloud vendors, they didn’t start with infrastructure as a service (IaaS). They started with PaaS and have since evolved to add IaaS with the Google Cloud Data Store.  There’s clearly a blurring of the lines between IaaS and PaaS and there was good discussion about what customers actually want. Oracle’s representive pointed out that customers come looking for a solution, not necessarily a PaaS or IaaS provider. Clearly the solution must meet their expectations for scale, efficiency and cost, but you also must be able to deliver the services to ensure customer success. Russell Hertzberg from SoftServe gets the panelist of the day award for calling out Google IaaS vs. AWS and putting Salesforce on the spot for not moving into the market. Way to take the gloves off Russ!

The lunch event was an unconference, which my table wasn’t totally up to speed on I have to say. Nice idea though. There was a fireside chat with an exec from VMware. The focus was on distribution in a software-defined world. I wasn’t able to attend much of the IaaS roundtable but the parts I did catch focused on how much co-opetition there is in the cloud as everyone seemed to be friends and foes with Savvis.

The SMB market panel was interesting. Small companies want low friction and self-provisioning, which often scares away channel partners who weren’t “born in the cloud.” (This was a common theme.) SMB buyers don’t talk cloud speak.They want to be able to login to their browser and get the app. They want it to run and they want to know it’s secure. It’s less about technology and more about knowing their business process, workflow and/or vertical markets. Cloud resellers must be able to deliver on-boarding, education and on-going service. They’re doing front-line support.

I participated in the Big Data Roundtable. It was good to have Sharon Gordon on the panel, who runs alliances at Birst, as well as her partner Eileen Boerger from CorSource to give a real-world business intelligence in the cloud channel partnership example. Nice job moderating Rhianna! Hope you can edit out a few of my jokes from the video…

Finally, the Industry Roundtable and final remarks from our host Jeff Kaplan wrapped up the day before the bar opened. The panel focused on the role of systems integrators in the cloud. SIs provide business case and vertical expertise. The legacy product channel doesn’t account for the recurring revenue model, but as David Hoff from CloudSherpas pointed out, “you can use a chainsaw to cut butter, but you won’t get the desired results.” Well said.

The bottom line, you ask? The conference was a success. Jeff Kaplan set the following goals and they were definitely achieved:

  1. Identify best practices for successful cloud partnerships. Check.
  2. Showcase innovative channel initiatives and success stories. Check.
  3. Create an environment for valuable networking opportunities. Check.

For more details on the Cloud Channel Summit, visit: http://cloudchannelsummit.com/


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