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3 Sigh-worthy Cloud Facts

02.01.17

What did our webinar panelists have to say about the State of Partnering 2017 data?

By Diane Krakora, CEO of PartnerPath

football-game.jpgThey say hindsight is 20/20. That adage is never truer than when we analyze the results of our annual State of Partnering study and compare the responses to those of past years. Inevitably, certain trends emerge or certain assumptions are proven true (or false) that sometimes result in me sighing. Noticeably. It’s the audible sign that I have found data that’s not only surprising, but disappointing.

This year was no different. Sometimes the cloud reminds me of the last 2 minutes of a close [American] football game – taking about 800% longer (rough estimate) than it should for the clock to wind down, with several timeouts to figure out the next play. In the slow-moving but inevitable progress of cloud, there have been a few wrong assumptions made by the IT industry – from vendor expectations to analyst projections. And now that the cloud model is more than five years old (by channel standards at least), certain truths are being revealed that might not have been apparent before.

Cloud was one the topics we discussed during our 2017 State of Partnering webinar. Lynn Haber, senior editor of Channel Partners (our media partner for the survey), and Leonard Iventosch, vice president of worldwide channels at Nimble Storage, joined me as we discussed some of the survey findings, including those around cloud. Lynn’s experience writing about the channel provided some much-appreciated partner perspective, while Leonard offered up the vendor point-of-view, based on his many years in channel sales.

What did this year’s survey uncover about cloud? I’ll leave it to you to determine whether these data points are game-changers for vendors, but here’s what Leonard and Lynn had to say about each.

Finding #1: One-third of the vendors respondents have more than 50 percent of their revenues driven by partners, and 75 percent indicated their partner-driven revenues will increase in 2017.

Leonard: I think that number is a little on the high side. Vendors want to appear to be more channel-centric than they are. That said, I think the economics are driving a change toward more partner value.

Lynn: We hear vendors need to reach out to partners – there is so much to be done and they simply can’t do it without partners. Partners do seem to be optimistic about the market, and they need their vendor partners to help them drive their revenues.

Finding #2: Cloud revenues are still slow to grow for the vendor respondents. More than 50 percent of respondents are reporting less than 10 percent of their overall revenues are coming from cloud.

1701-SOP-results-webinar_Page_08.jpgLynn: Given all the hype and talk about cloud, that number seems low. Partners are talking about it and implementing it, but there is still lot of concern about how they’re going to be implementing it; just reselling doesn’t bring in the recurring revenue they need to transform their businesses. The opportunity lies in adding value and that is what a lot of partners are trying to figure out. We are still going to be having a lot of conversations about cloud.

Leonard: [Analyst firms] have been massively overpredicting how fast companies will move to the cloud. Only about 10 percent of workloads are now in the cloud, but that trend is here to stay. As vendors, it’s up to us to figure out how to add value in that process and for partners, how to monetize that move and how to show that to their customers.

Finding #3: Less than 10 percent of cloud sales is being driven by channel partners.

Leonard: Let’s start with the heritage of what the solution provider community has been for a generation or more. These are folks who are good at solving customer problems with on-premise solutions. … It's hard to monetize CapEx cloud sales; the economics of working with Azure or Amazon are terrible; so partners are looking to create different kinds of partnerships with … cloud services providers that are much more flexible and easy to do business with.

Lynn: Vendors sound optimistic about the cloud, but they talk about it not being an easy road, and it’s tough to get partners to make that shift in their economic model as well. Partners are relying on vendors to do more to help them make that shift. … Vendors are trying to get partners to do more in the cloud, but it is slow going.

The cloud is only one topic in our State of Partnering study, but it is one that garners a lot of interest – from vendors that are and are not currently creating cloud channel models. Where are you in your cloud channel development? What’s next? Take our cloud readiness quiz to find out.

Next week we will discuss Lynn and Leonard’s perceptions of the findings from the solution provider respondents. Stay tuned!

Diane-Krakora.jpgDiane Krakora is CEO of PartnerPath with two decades of experience defining the best practices and frameworks around how to develop and manage partnerships.

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Topics: Channel Best Practices

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