There’s no doubt that possibly the biggest transformative factor in the IT channel of the last few years has been the migration to cloud.
In a report released in September 2016, research firm Gartner revealed that the worldwide public cloud services market was projected to grow 17.2 percent in 2016 to total $208.6 billion, up from $178 billion in 2015. The highest growth will come from cloud system infrastructure services (infrastructure as a service [IaaS]), which was projected to grow 42.8 percent in 2016. Cloud application services (software as a service [SaaS]), one of the largest segments in the global cloud services market, was expected to grow 21.7 percent in 2016 to reach $38.9 billion.
Those are some pretty big numbers, and give you some idea of the scale of the cloud transformation within the industry. The report went on to state: “IT modernization is currently the top driver of public cloud adoption, followed by cost savings, innovation, agility and other benefits. The focus on IT modernization indicates a more sophisticated and strategic use of public cloud services. Not only are public cloud services being used to recognize the tactical benefits of cost savings and innovation, but they are also being used to establish a more modern IT environment — an environment that can serve as a strategic foundation for future applications and digital business processes.”
It seems that businesses are waking up to the benefits of cloud adoption, and those that have already done so, are reaping the benefits. However, it’s not just bigger channel businesses which are moving into the cloud space. Increasingly, smaller end-users are now wanting cloud services and delivery mechanisms as well.
Cloud experts, RISC IT Solutions detail some reasons why cloud is attractive to end-users:
“Capital investment is reduced – with cloud, more IT is outsourced or rented on demand. This means that the need to purchase hardware (servers and all the supporting infrastructure) is reduced, resulting in a lowering of the amount of capital investment required to drive the business.
Capital wastage is reduced – with cloud, you only need to pay for what you use. This is important because cloud makes it possible to more closely align IT spend with actual requirements at any one point in time — a very efficient way of procuring IT resources.
Improved IT automation and a smaller IT footprint allows your IT teams to do more with less. Headcount can be redeployed so that instead of spending time on repetitive tasks (“keeping the lights on”) your IT department can work on more strategic work that is of greater value to your business.
IT on demand: teams get the resources they need, when they need them, speeding up development and mitigating delays, and in doing so, shortening project delivery times.
Accelerated decision making: new or pilot projects no longer require capital expenditure to get off the ground and can be approved more quickly, while risk is reduced on more speculative initiatives, opening up the door to innovation and potentially the next route to success.
Improved delivery and economics of IT: gives your business the adaptability and fleet-of-foot to gain competitive advantage.“
As cloud becomes more pervasive and the availability of education and information improves, end-user cloud adoption is going to accelerate. Indeed, the general end-user public is already used to the concept of using cloud services daily with iCloud, Google Docs, online banking, etc. Resellers thus need to recognize that their offerings need to increasingly be shaped around cloud product and service offerings.
Fortunately, this hasn’t gone unnoticed. We are already beginning to see a shift in reseller business models, as things like cloud service brokerages become the mechanism for delivering vendor cloud services to end-users. That’s not to say that resellers need to drop all traditional hardware distribution immediately as the transition will not happen overnight, but the sooner resellers recognize the scale of the shift that is happening, the earlier they can position themselves as cloud service providers and ultimately, future-proof their businesses in this important area.
What is a Cloud Service Brokerage?
Cloud service brokers, which function as intermediaries between cloud providers and enterprises, help strengthen the relationships providers have with customers by offering consulting and integration services for them.