Throughout 2010, Cloud computing was perceived as the future of enterprise IT; acceleration of cloud technology across emerging Indian market was mainly the result of favorable technology climate around virtualization, open standards, and standardized and commoditized IT infrastructure. In the channel community, while many showed their concerns around cloud computing; others remained optimistic and benefitted from the growing conventional technology.
In 2011, the cloud-related hype of 2009 and most of 2010 will steadily give way to a more sober, and realistic understanding of the relevance and applicability of cloud computing among organizations. The debate over public versus private versus hybrid approaches, which led to cloud-related market confusion over the past 12 months; in 2011 will actually serve to help organizations better understand and therefore position cloud-based approaches relative to existing IT initiatives. Channel is also expected to play a crucial role in making IT decision makers educate on the distinction between internal versus external service deployments, and between dedicated and shared access. Over the next 12 months, we expect cloud computing to increasingly be considered alongside (and often compared to) other, related sourcing approaches, including those offered by more traditional outsourcing vendors and hosted service providers.
As per Springboard Research, Indian organizations are currently far more receptive to cloud-related marketing messages than other organizations in APEJ region. As per a recent Springboard study, only 19 percent of enterprises in India view cloud as over-hyped. In terms of overall spending, the public cloud market in AP remains dominated by software-as-a-service (SaaS) solutions. Among Indian organizations, SaaS offerings, storage and enterprise applications (BI, CRM, ERP, etc.) are the most widely adopted. Springboard Research expects this adoption to evolve significantly over the next 12 to 18 months as demand in other areas, including cloud-based web conferencing and email, increases. However, we expect infrastructure-as-a-service (IaaS) offerings from both cloud providers as well as more traditional telco providers to grow rapidly. For scenarios like app dev/test and sourcing of excess computing capacity, cloud computing is typically far more flexible and cost effective than traditional sourcing options.
Throughout 2011, distribution channel partners system integrators (SIs), value-added resellers (VARs) and even value-added distributors (VADs) will be in a particularly vulnerable position as the IT market moves quickly toward cloud computing. However, the days of surviving on business models dependent on distributing generalized IT products with razor-thin margins and living day-to-day on cash turns supported by vendor-provided credit are quickly coming to a close. To make matters worse, the traditional large-scale SIs deals that supported channel partners for years are increasingly disappearing or are being won and delivered by vendors directly.
In 2011, regional SIs, VARs and distributors will be forced to better develop specialties by vertical industry and business solution to deliver the customer value required to survive. Throughout 2010, partners were pushed by their vendor suppliers to invest in skills around high growth solutions; and in 2011 too, Springboard believes that channel partners will need to elevate their customer intimacy and ability to deliver clear business value.
Springboard Research also believes that channel partners will continue to play an important but not a dominant role in helping customers procure SaaS and cloud-based solutions. A recent Springboard survey revealed that Indian organizations place the highest value on cloud-related channel partners in the region, well above the regional average, as 59 percent of Indian organizations believe that channel partners are helpful when buying cloud computing services/solutions. This trend is likely to accelerate in 2011 too as a cloud channel further develops and SaaS vendors reach a ceiling on how much their direct sales force and the web can achieve. Areas where distribution channel partners will play an important cloud role are:
Advisors and Integrators: Local channel partners with intimate customer relationships; will need to play the role of an integrator, combining existing platforms at customer sites and newer cloud offerings. In a recent Springboard study, 43 percent of SaaS users integrated their SaaS application with another on-demand or on-premise application. In a hybrid model, customers who have made substantial investments in existing IT assets will require integration work when a cloud-based application is added, giving SIs enormous business opportunities.
Customization: As per the recent Springboard Research survey, 52 percent of SaaS users in 2010 customized their on-demand application in some way or the other. In 2011 too, this trend is expected to provide considerable opportunity for channel partners familiar with local market conditions and regulatory requirements.
Training: In 2011, channel partners are expected to play a crucial role in training the end customers on how to optimally use the various cloud-based applications. As per the Springboard survey, 21 percent of respondents currently believe cloud computing is more complex than deploying and managing in-house infrastructure, data, and applications.
Also, throughout 2011, channel are expected to play a crucial role in making CIOs and IT decision makers aware about the cloud-related security concerns, which are further expected to subside slowly as the approach is more fully understood among Indian enterprises. Instead in 2011, concerns will center around interoperability and integration of systems, data and processes likely to be accessed across multiple internal and external deployment scenarios.
Springboard believes that channel community has the biggest advantage of being close to IT decision maker, which can be leveraged effectively in case of cloud computing and in 2011, while many in the fraternity will continue to believe that growth of cloud means loss of their business, those who would take informed decisions and strategies their business model to address cloud opportunity will make profits.
In 2011, the cloud-related hype of 2009 and most of 2010 will steadily give way to a more sober, and realistic understanding of the relevance and applicability of cloud computing among organizations. The debate over public versus private versus hybrid approaches, which led to cloud-related market confusion over the past 12 months; in 2011 will actually serve to help organizations better understand and therefore position cloud-based approaches relative to existing IT initiatives. Channel is also expected to play a crucial role in making IT decision makers educate on the distinction between internal versus external service deployments, and between dedicated and shared access. Over the next 12 months, we expect cloud computing to increasingly be considered alongside (and often compared to) other, related sourcing approaches, including those offered by more traditional outsourcing vendors and hosted service providers.
As per Springboard Research, Indian organizations are currently far more receptive to cloud-related marketing messages than other organizations in APEJ region. As per a recent Springboard study, only 19 percent of enterprises in India view cloud as over-hyped. In terms of overall spending, the public cloud market in AP remains dominated by software-as-a-service (SaaS) solutions. Among Indian organizations, SaaS offerings, storage and enterprise applications (BI, CRM, ERP, etc.) are the most widely adopted. Springboard Research expects this adoption to evolve significantly over the next 12 to 18 months as demand in other areas, including cloud-based web conferencing and email, increases. However, we expect infrastructure-as-a-service (IaaS) offerings from both cloud providers as well as more traditional telco providers to grow rapidly. For scenarios like app dev/test and sourcing of excess computing capacity, cloud computing is typically far more flexible and cost effective than traditional sourcing options.
Throughout 2011, distribution channel partners system integrators (SIs), value-added resellers (VARs) and even value-added distributors (VADs) will be in a particularly vulnerable position as the IT market moves quickly toward cloud computing. However, the days of surviving on business models dependent on distributing generalized IT products with razor-thin margins and living day-to-day on cash turns supported by vendor-provided credit are quickly coming to a close. To make matters worse, the traditional large-scale SIs deals that supported channel partners for years are increasingly disappearing or are being won and delivered by vendors directly.
In 2011, regional SIs, VARs and distributors will be forced to better develop specialties by vertical industry and business solution to deliver the customer value required to survive. Throughout 2010, partners were pushed by their vendor suppliers to invest in skills around high growth solutions; and in 2011 too, Springboard believes that channel partners will need to elevate their customer intimacy and ability to deliver clear business value.
Springboard Research also believes that channel partners will continue to play an important but not a dominant role in helping customers procure SaaS and cloud-based solutions. A recent Springboard survey revealed that Indian organizations place the highest value on cloud-related channel partners in the region, well above the regional average, as 59 percent of Indian organizations believe that channel partners are helpful when buying cloud computing services/solutions. This trend is likely to accelerate in 2011 too as a cloud channel further develops and SaaS vendors reach a ceiling on how much their direct sales force and the web can achieve. Areas where distribution channel partners will play an important cloud role are:
Advisors and Integrators: Local channel partners with intimate customer relationships; will need to play the role of an integrator, combining existing platforms at customer sites and newer cloud offerings. In a recent Springboard study, 43 percent of SaaS users integrated their SaaS application with another on-demand or on-premise application. In a hybrid model, customers who have made substantial investments in existing IT assets will require integration work when a cloud-based application is added, giving SIs enormous business opportunities.
Customization: As per the recent Springboard Research survey, 52 percent of SaaS users in 2010 customized their on-demand application in some way or the other. In 2011 too, this trend is expected to provide considerable opportunity for channel partners familiar with local market conditions and regulatory requirements.
Training: In 2011, channel partners are expected to play a crucial role in training the end customers on how to optimally use the various cloud-based applications. As per the Springboard survey, 21 percent of respondents currently believe cloud computing is more complex than deploying and managing in-house infrastructure, data, and applications.
Also, throughout 2011, channel are expected to play a crucial role in making CIOs and IT decision makers aware about the cloud-related security concerns, which are further expected to subside slowly as the approach is more fully understood among Indian enterprises. Instead in 2011, concerns will center around interoperability and integration of systems, data and processes likely to be accessed across multiple internal and external deployment scenarios.
Springboard believes that channel community has the biggest advantage of being close to IT decision maker, which can be leveraged effectively in case of cloud computing and in 2011, while many in the fraternity will continue to believe that growth of cloud means loss of their business, those who would take informed decisions and strategies their business model to address cloud opportunity will make profits.
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