Cloud Computing: How Cloud Computing Shifts the VAR Model

Douglas Toombs is a senior analyst at Tier1 Research, a division of The 451 Group, where he covers managed services and cloud computing. In this conversation with writer Colleen Frye, Toombs notes some key trends, and why SMBs and the channel should get onboard and leverage their status as trusted partner.

ChannelPro-SMB: What are some key trends in managed services, and which are pertinent to SMBs?

Toombs: We’re seeing a lot of growth in the security, compliance, email systems, [and] business continuity and disaster recovery services space, as cloud computing comes more to the forefront of the industry. Cloud has proved viable for SMB computing requirements. Business continuity/disaster recovery is one example. Five to 10 years ago, it might have been prohibitively expensive to have a hot capability off-site in case of disaster. Now with cloud it’s considerably more affordable. [In terms of security,] there are a number of companies out there that offer SaaS and managed security solutions, and in many cases they will do both. At scale they can provide a more cost-effective solution than what smaller organizations had to do five years ago to deal with any number of threats.

ChannelPro-SMB: What technology innovations are driving this space?

Toombs: A lot of the work we’re seeing is around cloud orchestration software—software that takes things above and beyond a traditional hypervisor virtualization exercise on server consolidation. Cloud orchestration stacks let company developers add another layer of abstraction. These types of stacks are having a dramatic impact on the marketplace, in terms of customers trying to get to a multiple virtualization environment, and get to the next level with an internal cloud structure that is more agile and flexible. That helps open the bridge—now we have an internal cloud and we can get a connection to an external cloud and use it for burst capacity. That’s having a lot of impact in the market.

ChannelPro-SMB: What are the opportunities in SaaS, IaaS, and PaaS for the channel?

Toombs: PaaS is the more nascent of them, and harder to predict, but the general expectation is that there is abundant opportunity in the IaaS and SaaS markets. Look at programs like the Ingram Micro Seismic catalog and the Arrow ECS cloud services—that’s a shift in the traditional VAR/reseller channel model. There are service providers that have [IaaS] offerings and VARs that can leverage them. For SaaS, there are reseller programs for Google Apps, Microsoft online apps—those represent opportunities for the channel. Based on how many workloads are predicted to move to a cloud structure, I think more will go through a VAR. A VAR has a trusted relationship, in areas service providers are interested in getting traction from.

ChannelPro-SMB: Do SMBs, and the channel, really understand the cloud and how they can benefit from it?

Toombs: SMBs are somewhat lost in the marketing blizzard, and there are still reasonable concerns, such as vendor lock-in, security, and compliance issues, that make it challenging for SMBs. Whether the channel fully grasps [cloud] is secondary to the point that they really need to get it. SMBs need a trusted partner to help them and [determine] what could benefit their business. As business shifts into these models it will happen one way or other, so it would be beneficial for VARs to get in front, as opposed to customers figuring it out on their own and buying services directly.