Cloud services to be chief earner by 2020: report

Channel enterprises will see cloud services revenue grow rapidly, says Brocade

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Cloud services to be chief earner by 2020: report McGrath: Revenue-focused channel programmes will all become increasingly critical.
By  Stephen McBride Published  November 9, 2012

A survey conducted by Brocade of over 500 channel enterprises globally, indicates that the channel expects cloud professional services, which is currently less than 25% of their revenues, to be the number one revenue generator by 2020.

The report showed that vendors are largely to blame for the channel's inability to move towards cloud-based professional services. The main hindrances cited are a lack of flexibility and capabilities by vendors, non-innovative solutions, complex partner programmes and proprietary vendor technologies.

The research points to a growing customer demand for professional services, with complexity and constraints on CapEx reported as the biggest customer challenges.

A surprising result is the fact that a small percentage of respondents (11%) currently look to their vendors for innovative finance solutions and 19% for marketing funding- both factors being important when trying to build a brand and reputation rather than sell on price.

Regan McGrath, senior vice president Worldwide Sales at Brocade says that channel partners need to be more critical of their vendors if they are to compete in the professional services space. Considerations should include whether vendor strategies' vision and technology support the partner's ability to maximise professional services revenue, whether there is direct competition from vendors in the offering of services, vendor technology differentiation, financing options to support customer's CapEX concerns and marketing enablement.

"Revenue-focused channel programmes like our Brocade Alliance Partner Network, combined with differentiated technology solutions that help address customers' needs for innovative and easy to deploy networks, flexible financing solutions such as Brocade Network Subscription, and tools and resources that help channel develop their reputation as consultants, will all become increasingly critical to developing competitive consultancy businesses that drive significant revenue returns," said McGrath. 

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