Ask not what the cloud can do for you

CloudsJust about everyone seems to have a different definition of what exactly the cloud is, much less what it’s going to mean to solution providers. But a panel conversation at last week’s N-able Partner Summit 2010 in Scottsdale, Ariz. provided some perspective on what five leading vendors are thinking about the new field.

And the best advice of the day went to a member of the panel who didn’t look to redefine solution providers’ business for the cloud, but rather, sought to change how solution providers view the cloud within their existing business.

The panel brought together Microsoft cloud channel chief Gretchen O’Hara, Avnet Technology Solutions’ vice president of technology solutions practices Tim FitzGerald, Robert Fuller, vice president of worldwide channels at Rackspace Hosting, CA Technologies chief development officer Don Kleinschnitz and Jeff Ragusa, SMB channel lead for Google Apps.

Here’s what they had to say.

Kleinschnitz’s advice resonated with many of the 300-plus MSPs in the audience at the event for its simplicity. “Don’t focus so much on the cloud, focus on what the cloud can do with the business you’re in,” Kleinschnitz said. In other words, if you’re in messaging services today, the cloud doesn’t need to reinvent or recreate your business – but it can make your offering more diverse, more flexible, or bring in new components. Kleinschnitz argued that there isn’t value in the cloud per se, but that it’s important that solution providers “create new value using all the technologies on the table.”

“Those who succeed are taking the infrastructure and layering services on top,” he said. “There’s a lot of work that’s not seamless – at least not yet – so there’s a lot of opportunity to add value there.”

O’Hara echoed the sentiment, adding that the cloud affords MSPs greater velocity than ever before by using the cloud to spin up applications as a testing ground. She gave the example of an (unfortunately unnamed) Canadian MSP partner of Microsoft that’s using the cloud to deliver a set of services that are “very specialized or niche and beyond the core” offered in Microsoft’s own BPOS… err… Office 365.

One of the big topics of the day was the push into the applications layer – and Google’s Ragusa suggested that MSPs would benefit from having some lightweight scripting capabilities on-staff. That’s not to say that all MSPs have to become ISVs – but the ability to do some quick integration work amongst different cloud-based, on-premise and SaaS packages could prove a key differentiator. It also, he contended, helps solution providers deal with low-cost, low-margin software in the cloud world, and in fact can turn it into an advantage for the channel.

“If you can do the software low cost you can free up budget – then the question is: Can you capture that budget?” he asked attendees.

Doing so comes back to the core of “trusted advisor” status – get closer to your customers, know their goals and concerns. Free their time and money up from the everyday, and they’re more likely to invest more heavily in higher-margin services and solutions that introduced innovation.

Rackspace’s Fuller called the move towards the cloud “a massive technology shift” and added “everyone in this audience is really leading the way for your community.” He said there’s room for a number of different models for partners with the hosting giant, including resale and referral models depending on the solution provider’s focus.

FitzGerald talked up Avnet’s SolutionsPath methodologies, and the role they can play in helping resellers build deep practices in a given vertical – especially as they move up the solution selling stack and start selling more and more to line of business decision makers “that don’t speak technology speak.” FitzGerald also provided some insight into Avnet’s view of how distribution remains a value in a world that’s more cloud-centric. In a word: scale.

“As long as partners are looking to grow at a faster rate, Avnet remains relevant as a solutions distribution, he said. “We just become much more about services and services delivery than the physical transfer of assets and big warehouses. If we can do it more cost-effectively than you can, we make you more valuable.”

O’Hara faced some questions from the audience, and looked to dispel the notion that in situations where partners resell cloud-based Microsoft offerings, there’s a three-year cap on the annuity partners make. While there is a three-year cap on the enterprise agreements sold by the company’s large account resellers, she said that with Microsoft Online Services sales, “you get an annuity for the lengthy of the customer life.” It’s just a matter of a shift from a traditional margins business to a billing relationship for the solution provider, she said. And she added that because Microsoft has always used the channel as its primary route to market – particularly in SMB – “the reality is that we’ve actually built the apps from the beginning with the channel in mind.”

“MSPs are one of the most critical bases for us,” she said. “We’re not going to obliterate the channel.”

One more thought: Are MSPs uniquely positioned for the cloud? Many in the audience think that’s the case. After all, managed services providers have already laid the crucial groundwork – getting used to living on recurring revenues and already having had the critical conversations to break customers’ dependency on having their technological infrastructure on-site.

Be sure to check Tuesday for more on the MSPs-in-the-cloud discussion, with thoughts from four N-able MSPs who are already doing a great deal of cloud work in their businesses.