Although cloud services has the potential to open up business opportunities, channel partners that are building their business in this space are still finding their way
Published Friday, 18 May 2012
Although cloud services has the potential to open up business opportunities, channel partners that are building their business in this space are still finding their way, reports Clayton Vallabhan.
By Clayton Vallabhan
With approximately US$2 billion worth of cloud computing services set to be sold in 2012, there is every indication that it is the bandwagon the region’s channel community should be jumping on. However, resellers must identify which parts of the cloud they can most benefit from. Cloud services involve a lot of moving pieces and who better to tie them all together than solution providers?
While the Middle East maybe behind the cloud services curve, with broadband penetration lagging behind established Western markets, the trend will inevitably find its way here. That will bring a disruption for the traditional channel distribution models and how distributors will engage with channel partners.
Yet, while the vast majority of the major stakeholders surveyed for this feature still view cloud services as a significant ‘game changer’, current market dynamics mean that the status quo is likely to be maintained for some time to come in the Middle East.
Dr. Ali Baghdadi, president and CEO, Aptec Holdings said there is a significant amount of interest in cloud in the region, but there isn’t much in the way of statistics. Since the announcement of Office 365 which Aptec distributes and will start selling in June this year, more than 200 resellers have signed up. “Our vertical cloud applications like Altair FMS are also attracting more interest from the SMB sector while larger enterprises are opting for in-house versions,” Baghdadi said.
Nick Black, technical manager, Trend Micro MEA, said the adoption of cloud services in the region is slow because of major stumbling blocks with security the biggest concern. Black said cloud computing is now a $128 billion business globally. Whilst the Middle East’s cloud computing adoption rate is growing, it is lower than markets in more mature economies. There is still some uncertainty especially around security, he said.
Black revealed that a recent Trend Micro survey of 100 IT professionals across the Middle East region showed that 60% of respondents had no plans for implementation of public or private cloud environments in their organisations.
Nicolai Solling, director technical services, help AG Middle East, agreed and said data storage is another inhibitor to the uptake of cloud services in the region. Solling said: “Cloud services are definitely a talking point with many customers, however, the adoption of services is severely hampered by the cloud providers’ data storage format. Every organisation in the Middle East needs to take into consideration that the cloud providers are located far away from the region and that data and applications will therefore be stored very far away. There are simply physical limits to how quick data can be transmitted between the region and the rest of the world due to latency in the speed of the fibre optical cables connecting the world. This can be an issue both from an information security perspective, but also from an availability perspective.”
Solling added: “The uptake of cloud services in the region will not be significant until cloud providers start building a local presence here, where we can take opportunity of the high performance infrastructure built by the service providers in the region.”
By contrast, cloud-based services are generally not large-scale software applications.
Deepak Narain, senior systems engineer, VMware EMEA said the biggest hurdle right now is education. Narain added that channel partners need to aggressively deliver programmes to educate the Middle East market on the benefits of cloud computing. “VMware thinks the real opportunity lies in partners helping end-users in building virtual private clouds that leverage the service provider offerings in the Middle East,” said Narain.
Hari Padmanabhan, executive chairman, Encore Group, said there is significant opportunities to tap into the cloud market and these are already being accessed at the enterprise level. “There are enterprises now that are making major shifts to move their entire ‘enterprise communications’, if I can call it that, which is everything from email to collaborative communication within the enterprise on to cloud-based services,” he said.
Padmanabhan pointed out that the challenge is the ability of channel partners to step up their own capability in terms of enabling or providing services that help enterprises to transition their current enterprise communication infrastructure on to cloud-based services. “This is beginning to happen and I think these are the areas where we will see initial successes,” he noted.
While there is a case for channel partners to build their own cloud-based infrastructures and offer services to prospective clients, major stakeholders in the region are of the view that developing collaborative models between vendors, distributors and resellers should be the starting point.
Anand Choudha, managing director at specialist security solution VAD Spectrami said: “Due to the scarcity of good cloud resources, partners should look at collaborative models, leveraging off the skills that they can avail from vendors and distributors to give good services to customers. We have services like Cloud copy data management from Actifio, managed infrastructure protection as a service from Verdasys and we have our own services which are managed mobile device management and managed cloud authentication that we offer.”
George DeBono, general manager, Red Hat MEA concurred and added that: “What we find with our channel partners, especially our Certified Cloud Providers within the public space, is there is a major bonus to being able to work with Red Hat as an ‘add on’ to the capabilities and business development of their parent organisation. It's a lot easier, and more cost effective, to model your business model around a company that encompasses every aspect of the subscription and technology model. Also working with Red Hat means that you ‘bolt on’ the specialisation and technical capabilities of our certified platform and our staff.”
VMware’s Narain said channel partners need to work in their niche market and collaborate with vendors to succeed. “It’s always going to be a combination of the two. Channel partners have their vertical expertise, but a large part of their offerings will be private labelling from existing cloud partners. In a tightly regulated market such as the Middle East, channel partners need to work together with the service providers to build on their services. A lot of the service providers are building virtual private clouds that can exist in more than one service provider’s data centre, thus adding flexibility and choice of cloud services in the region,” Narain said.
He pointed out that VMware is focusing on infrastructure as a service. “Lately, we are witnessing the move from infrastructure as a service to platform as a service, which we believe will be a dominant way of offering cloud services in the Middle East region in 2012,” he said.
Despite the many challenges that solution providers and service providers face in the region, the onus is on them to educate their clients on the benefits of using cloud-based services. Given the potential impact of cloud-based services, as well as lingering concerns about security and other issues that clients may harbour, moving to reassure clients by providing them with well planned deliverables and service level agreements is key in the education process.
Trend Micro’s Black explained: “Businesses’ life-blood is their data and it is clear that this is the highest priority for organisations so security is a primary concern. When one then looks at cloud computing as a whole, the security challenges escalate. Now, organisations have to look at how they protect their data when this is both held and managed outside their protected environment. Bandwidth may also be an issue in certain parts of the region.”
Black said education around cloud computing remains the foremost challenge for the Middle East region. “Many organisations lack proper understanding of the real benefits that cloud can offer to their business,” he remarked.
help AG’s Solling agreed and said: “The geographical location of the region is definitely a key issue in cloud adoption. I would say that cloud computing in general still has a long way to go when it comes to securing the data in the cloud. Furthermore, on the concept of cloud services, I think that anyone with a strong focus of understanding cloud services will also be worried that there are no clearly identified standards for which format data will be returned in case you wish to migrate between cloud providers.”
Industry pundits agree that they need to bring value to the cloud services landscape. This entails educating the channel, training initiatives and anticipating how technological advancements will impact the uptake of cloud services in 2012. Everyone must be prepared to pool in their resources into making cloud services the next step to PC-free computing.
Narain said channel partners can consult with end-users, doing a thorough analysis to evaluate which part of their business will benefit the most from moving to the cloud. “The VMware Authorised Training Center (VATC) programme has been created with a view to select, manage and support training companies in their activity of delivering authorised VMware technical training to our customers and partners,” he said.
Black added that partners need to help the market understand the benefits of adopting cloud technology and add value. “Partners can add the most value by taking advantage of the fact that they are best placed to educate their customers. We not only try to reach out to our partners to educate them about how Trend Micro can help them address their security concerns, but share our whitepapers and threat predictions on the subject via online communications, face-to-face workshops and WebExes,” he said.
Ultimately, Black believes the next 12 months should see the introduction of new cloud service providers in the market.