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The Changing Channel

Microsoft's 'Cloud OS' Era Means a Return to License Land

Microsoft threw another wrench in the effort to define cloud computing when it ushered in its Cloud OS era with Windows Server 2012. But for partners, the new definition means that for once, they won't have to change as much as they thought.

For the past several years, solution providers, VARs, systems integrators and other channel players have been wrestling with how to bring the cloud into their businesses. What is it? Who needs it? Do I have the skills to deliver it? These are just some of the questions that have plagued them. Here are a few more:

Where does the channel fit in when Microsoft can sell it directly?
You need to innovate new services to "wrap" around these subscriptions. Help customers design their cloud environment, configure it, provision it, migrate data to it, take advantage of cloud "elasticity" by closely monitoring and adjusting capacities in storage, memory, even processors. Use recurring-revenue models to leverage more recurring revenue.

Some consultants have consistently counseled that partners must double their customer base to generate as much profit from the cloud as they do from traditional approaches. This isn't a happy prospect for hardworking channel partners -- and it's also not necessarily true.

Doesn't the cloud shift the stickiness with my customers from me to the cloud providers?
As with so many things, only as much as you let it. If you're truly managing your customer relationship effectively, you'll never lose your "stickiness," as your customers won't want to leave.

Reenter Microsoft and the private cloud redefined!
Just when you were trying to figure out the difference between public and private clouds, Microsoft swings back around and redefines it all, as usual. I'll bet you thought private cloud (like public cloud) was something that resided anywhere other than on the customer's premises. After all, the cloud and on-premises are opposites. Right?

Well, not after Sept. 4, 2012 -- and certainly not after Oct. 26, the day of the biggest announcements in Microsoft history: The New Way of Work. Windows 8.The Cloud OS.

The Cloud OS?
Yes. Microsoft Windows Server 2012, when used in conjunction with System Center 2012 SP1 (and in some cases Windows Azure), has been dubbed "the Cloud OS."

The Cloud OS enables construction of the best private clouds you've ever built on your premises. Yes, that's been redefined. Your private cloud is not necessarily "not here." You can build it, or have it built, right in your own datacenter. You can have all the elasticity, all the self-service capability, the "layer of abstraction" between the user and the technology that the National Institute of Standards and Technology describes in its fabled three-page definition of the cloud (you can download a PDF of the definition here).

I'll leave it for those responsible for deeper explanations of information technology to comment on how accurate this redefinition is. My focus is on the next question.

What does this mean for the changing channel?
Well, for once it means you won't have to change as much as you thought. What skills are required to build these private clouds? Great news: they're the same basic skills you've invested in so deeply. Network and systems integration skills. Connectivity skills. Server-building, virtualization, load-balancing and related skills. IT channel skills.

Even better, your salespeople (if you still have any) won't need to expand their skills so much. Many early cloud adopters have made radical changes to their sales teams, some even replacing them entirely with a new group that can sell financial concepts such as "cost reduction" and "elimination of capital investments." These new skills will definitely be useful, especially because you'll still be selling public cloud services, which require this business-operations orientation.

They'll also be useful to explain how building a private cloud is better than building out your server farm. Yes, those are two different things. They are. Really.

More Analysis by Howard Cohen:

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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