The rebirth of a new channel

The adoption of cloud computing in the Middle East is a widening route to a new channel

Tags: Cloud computing
  • E-Mail
By  Manda Banda Published  November 27, 2011

There is no doubt that the Middle East channel today is more agile, fragmented and capable of transforming quickly to the market conditions and needs than the vendor community whose products it takes to fleet street.

But like every other business, remaining profitable and healthy requires stability, focus, adjustment and continuously redefining of strategy. As part of our ongoing channel agenda, we are constantly monitoring measuring and predicting the trends with which resellers, distributors and vendors in the region must look at.

The adoption of cloud computing and other cloud-based managed services, although not yet widely accepted in the region, is growing and opening opportunities to a new channel which will call for extensive work by channel partners if they are to remain successful in their business.

Traditionally, channel partners in the Middle East have delivered products that have been sold in a resell type transaction. But that model is changing as organisations continue to look for ways to drive down their capital expenditure on IT infrastructure and look to use technology in different ways.

Now, organisations of all kinds have the ability to purchase some services and IT capabilities on a pay-as-go concept from an off-premise provider rather than acquiring IT infrastructure and implementing it through an organisation. This change and ability in how technology can be bought or utilised is a true game-changer and offers a huge opportunity for the channel in the Middle East on many levels.

For starters, it's a chance to find and develop many more customers inside an organisation especially if the firm involved is an enterprise as nearly every line of business executive becomes a potential client.

But to capture these new opportunities, channel partners in the region will need to adjust their business models, select vendors with solid channel commitments, embrace telecom service providers and decide whether they need to build their own cloud computing or managed services or resell someone else's.

The business model adjustments are not going to be easy, but partners need to commit now. I say this because most IT analyst firms have consistently said that while IT spending will remain relatively flat over the next two to three years, spending on cloud solutions will double over the same period.

What I see happening in future is that channel partners are likely to fit in one of three categories that will be at play as this progression continues. The typical dealer or trader will maintain the focus on traditional reselling that is not generating any recurring  revenues with margins declining, while the progressive partner will take the path to the cloud by driving managed services, selecting cloud applications and services, and investing in sales, marketing and technical competencies. On the flip side, transformative channel partners [VARs, solutions providers and SIs] are already driving their sales entirely on a recurring revenue model and are extending this to cloud deployments.

Longer term, it's the large transformative and progressive channel partners that will have a wider impact on the market in the Middle East. There is no doubt that the solution provider channel as we have known it for sometime is changing and the very nature of how various players interact. Partners that have an open mind will certainly thrive as new channels and routes to market become more pronounced.

 

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code