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The Changing Channel

Don't Worry, the Cloud Won't Kill the Channel -- Just Change It

Doomsayers are blaming cloud computing for the theoretical demise of the channel, but from Howard's point of view, it's all FUD.

The recent CompTIA Breakaway event in Las Vegas inspired discussions and speculation about the cloud's potential to kill the channel. I found it somewhat surprising, because I came back from Breakaway with a broader perspective that there definitely is still a channel that goes from manufacturers who sell to distributors (formerly aggregators) who then sell to resellers who finally sell to end users.

Most Microsoft partners have realized they must focus on what they can do for customers rather than what they can sell to them. By contrast, CompTIA has many members who are still enthusiastically focused primarily on selling computer products to their customers. They restored my confidence that "the channel" is indeed still a channel. So it's not product sales going away that will kill the channel.

Many industry observers are predicting the coming demise of the channel and blaming it on the cloud. It's frustrating to hear many otherwise intelligent people buy deeply into these ludicrous cloud arguments. The reality is that cloud is just a more cost-effective way of delivering higher-quality IT services by taking advantage of the economies of scale created when you deliver services remotely from a well-managed datacenter. So why all the FUD?

Communities
CompTIA has established several Channel Communities, which give members an excellent forum to collaborate on resolving many of the challenges that confront channel partners. Attending several of these sessions restored my channel faith, but also showed me where the fear is coming from, and also who's really focused on charting the course for the channel in the coming era.

First Stop: The Cloud Computing Community
The Cloud Computing Community was debating whether cloud was positive or negative for the channel. Nobody was talking about building services around subscriptions to augment income. Nobody was talking about strategies to properly vet providers and maximize profitability.

Unified Communications Uninformed
The Unified Communications Community spent a considerable amount of time debating what technologies qualified as "Unified Communications" technologies. I didn't understand what value would come out of such a discussion, and nobody else seemed to, either.

IT Services and Support Still Lead the Charge
The one community that seemed to have grappled with the challenge and grasped the answers was the Information Technology Services and Support Community. Many of these members had made the journey from break/fix, to help desk support, to network design and deployment, to consulting and business process reengineering. They clearly saw cloud as an expansion of techniques they've used for years to deliver IT services, and not as a complete revolution of all things IT. They didn't seem threatened by it as much as challenged to determine which cloud services were valuable to their customers and which were not. They also focused more of their attention on how to leverage all the hype and deliver effective messaging around their new, more cost-effective services.

Channel Evolution
When I ran services for The Computer Factory, our slogan was "We Make the Difference," and this is true of the servicing arm of any organization. They are where the angry customer makes contact with the company.

Bottom Line
The lesson I learned at CompTIA Breakaway that every VAR executive should pay attention to is that it's your service executives and their teams who can best lead you to where your customers need you. As you work to figure out what cloud services you can sell to your customers, you're creating a new channel -- one that serves as a channel from cloud or remote services providers to distributors to channel partners to end-user clients. That's an excellent evolution!

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About the Author

Howard M. Cohen is a consultant to IT vendors and channel partner companies and a board member of the U.S. chapter of the IAMCP. Reach him at hmc@hmcwritenow.com.

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Reader Comments

Thu, Sep 13, 2012

I think Microsoft is becoming more of a direct buy which is killing the channel. If you can go to the source why go through a channel or partner. Of course others may have exisiting relationships or provide some extras but MS is taking over.

Thu, Sep 13, 2012 Al Chagrin Falls Ohio

I agree that focusing on service and doing what's in the best interests of your customers will always win you points, but the Cloud presents channel partners with significant challenges, and some just won't survive the change, which is why many think it will kill the channel. My business started off with our own "private" cloud nearly 10 years ago, and we have always sold cloud-based services, such as email or backup storage. Until the work "cloud" became mainstream, it was difficult at times to communicate what it was we offered, but now the awareness level has helped, so for some, the survivors, the cloud will only enhance and help grow their businesses.

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