Cloud Computing Impact Debated At XTI Conference

Ask four different solution providers about their approach to such issues as cloud computing, and you’ll get four different answers.

That was the case a panel discussion Thursday on a look at the future of channel business models at the Xchange Tech Innovator conference, held this week in Las Vegas.

For solution providers with a primary focus on government, the move to cloud computing appears to be much slower than for those with more of a commercial customer focus.

Sonia St. Charles, CEO of the Davenport Group, a St. Paul, Minn.-based solution provider whose customer base is primarily state and local governments in 15 states across the country, said her clients are looking at how to work with her company to leverage cloud computing, but only in terms of private clouds.

"State and local governments are slow in their move to public clouds," St. Charles said.

Carmine Taglialatela, vice president of business development at Oak Hill Farm Group, a Delaplane, Virg.-based solution provider with a mixture of government and commercial clients, said his company’s commercial clients are way ahead of government in terms of thinking about the cloud.

"Government, when they think about the cloud, consider the risks," Taglialatela said. "Government customers are confused. They think they are already living in the cloud as it is, dealing with politics. There’s a lot of confusion, a lot of concerns about security. So I see a lot of secured private clouds happening."

For another solution provider, Chicago-based Model Metrics, the cloud is the whole reason for its existence, as its founder approached Marc Benioff, chairman and CEO of Salesforce.com, eight years ago specifically to set up a company to partner with it, said Model Metrics CTO John Barnes.

Back then, in 2003, Model Metrics had to deal with individual divisions adopting the new cloud technology, Barnes said. "Now we’re talking to CIOs of large enterprises," he said. "Over time, we’ve expanded our cloud business to Amazon (NSDQ:AMZN) Web Services and Google (NSDQ:GOOG)."

Cloud computing and other technologies have changed the way solution providers approach the business, said David Powell, vice president of managed services at TekLinks, a Birmingham, Ala.-based MSP.

Powell said that the changes mean solution providers need to stop their salespeople from talking about the technology, and instead talk about solving customer pain points. "It’s easy to talk speeds and feeds," he said. "But customers want to know what that new email system does for them."

When it comes to cloud computing, that includes not talking about saving customers money, Powell said.

"For SMBs, it’s not about saving money, but about availability (of their operations)," he said. "Five years ago, if you unplugged the boss’ desk phone, he would freak out. Now, he won’t notice it until lunch. Today, take away his Blackberry, and two seconds later he’s howling."

Forget going for the lowest price with the cloud, Powell said. For instance, when customers talk about signing up with Microsoft (NSDQ:MSFT)’s BPOS, he said he takes his and his customer’s cell phones, and tells the customer to call his support number and the BPOS support number.

"I tell them, if BPOS answers first, use it," he said. "If it’s a race to the bottom, we walk away from it. Then at that point, the customer might say, well, what do you have to offer to me?"

When it comes time to recruiting good employees, the four solution providers may face different circumstances, but all are all looking for employees who are different from those they might have hired in the past.

Barnes said his company is unique because of the technical requirements related to cloud computing. "For us, it’s not like trying to find 10 Java programmers," he said. "We look for people with Web 2.0 backgrounds."

Davenport is hiring business people who either understand the technology or the business of the technology, St. Charles said.

"We see ourselves as solving customers’ big problems," she said. "It may or may not be a technology problem. But it’s always a business problem."

Taglialatela said his company typically signs five -year contracts with its government clients, so it does not face the kind of changes other solution provides face. "But we are also looking for business people," he said. "Our customers are still doing very well."

Business people are also the best hires for TekLinks, Powell said. "It’s not a speeds and feeds purchasing decision any more," he said. "If such employees don’t understand the technology, we can teach them the details."