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  • Are big mergers in the public cloud good for the channel?

    Posted by Jacqui Rand November 12, 2018 - Category: News/Updates 218 views - 0 comments - 0 likes - #VARS  #cloud  #ISV  #Transition  #Alibaba  #Vodafone 



    As with just about everything to do with the internet, nothing stays the same for long. So it is with cloud services. AWS seemed to have stolen a march on just about everybody, particularly in Europe, acting quickly and definitively to establish dominance over the last half decade or so.

    But now Chinese internet giant Alibaba is rumoured to be in talks with BT to take on AWS’s dominance, according to Bloomberg [LINK: https://www.bloomberg.com/news/articles/2018-07-09/alibaba-in-talks-with-bt-for-cloud-partnership-in-europe-push] – and that’s potentially very exciting news for the channel.

    Any shake-up with the cloud giants (and BT’s already working with Amazon, Microsoft and Cisco) tends to offer opportunities to resellers and MSPs, but one on this potential scale is likely to offer a lot of opportunity for those who are already set up to take advantage of it. It could be that an extremely sizeable raft of new services could be in the offing if the partnership comes off.

    Alibaba has already inked a deal with Vodafone in Germany in 2016, and it seems likely that the BT agreement could follow a similar pattern. That deal means that the cloud provider now has a data centre in Frankfurt, and allows Vodafone access to its data storage and analytics services. And if the proposed partnership offers serious competition to AWS, the market for cloud services in the UK and Europe is likely to heat up considerably.  And with the increase in the cloud services opportunity there is a flip side as a merger of this size is also yet another nail in the coffin of hardware-only deals.

    As the world’s fourth largest cloud services provider (after AWS, Microsoft Corp and Google Cloud, according to Synergy [LINK: https://www.datacenterdynamics.com/news/synergy-aws-dominates-the-public-cloud-market-across-the-world/), and with Chinese relations with the US cooling, (thanks to Trump), the deal could offer Alibaba an even stronger footprint in Europe. It also shows new resolve in the midst of BT’s much-publicised restructure of its Global Services division, with the loss of thousands of jobs following a 9% revenue drop earlier in 2018.

    Both organisations are hungry, and that’s likely to lead to expansion.

    Couple this with the fact that priorities for resellers are changing; moving towards providing and maintaining a range of innovative services that are great for customers, but that are also painless for the partner to deliver. Resellers that can provide value-added and additional professional services capabilities to deliver a more agile IT environment are likely to have the advantage in cloud customer deals.

    As cloud offerings become more sophisticated, resellers are in need of more flexible alternatives and a provider who can offer more.  More niche, cloud-based ISV solutions that meet their needs, more customisations and third-party integrations to bring it all together (including legacy solutions which have been migrated into the cloud). Bringing those platform capabilities and skill sets together will open up new opportunities within the channel. And the provider who can knit all those elements together will be a winner. 

    To do this, providers need to reach out to partners and blend their skills with those of specialists in a partner community to be able to deliver a cohesive, specialised offering.

    As IT moves seemingly inexorably away from ‘big-ticket’ hard and software provision towards a more recurring revenue model, enabled by the cloud, resellers and MSPs need to be offering more value-added services and so partnering with cloud providers and other specialists will provide a richer blend of solutions for their customers. 

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