Opportunity or threat? How IT organisations should view the cloud - and respond

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1 White paper Opportunity or threat? How IT organisations should view the cloud - and respond

2 For decades, IT consultants, resellers and integrators have proved invaluable to technology vendors. They've taken their products and services to customers who have been hard to reach because of their smaller size, complexity or mix of services. In fact, Forrester estimates that more than 60% of tech industry revenues have been generated by channel partners. However, this is changing with the rapid take-up of cloud computing. The software-as-a-service (SaaS) delivery model of the cloud enables a direct link between vendors and customers: often cutting out channel partners. Self-service web portals make it easy for customers to add, remove and adjust services to fit their changing needs. So how should IT solutions and services organisations (hereafter referred to as IT consultancies), respond? Does the cloud spell disaster for their business or represent a new opportunity? And what, if anything, will IT vendors do to help? This whitepaper explores the impact of cloud computing on IT consultancies and highlights how they can thrive by engaging with customers in new ways. Contents 1. What's different about cloud computing? 3 2. Value-added resellers (VARs) and distributors will be hit hardest 3 3. Can IT consultancies roll out their own cloud offerings? 3 4. How Colt enables IT consultancies to succeed in the cloud 4 5. Benefits of the Colt channel programme 4 6. White labelling: It's our cloud but it's also your cloud 5 2

3 What's different about cloud computing? Cloud computing is sometimes called utility computing because it's a way of delivering IT services directly to users' desktops, laptops, tablets and other devices via networks such as the Internet. The pay-for-what-you-use pricing model often applied to cloud services also highlights the similarity with utilities, as does the available 'on demand nature of these IT services. The simple concept of only being charged for what you use is highly appealing for customers who may have been used to IT being slow, complex, expensive and rarely matching their needs. With the cloud, there's flexibility: Self-service web portals empower customers to adjust their IT services to fit business needs at any time, and from any location via the Internet. Cloud services are straightforward at the point of purchase and consumption. The complexity is managed by the cloud provider: remote servers are housed in highly-secure data centres where skilled professionals take care of data storage and management, protecting assets and maximising availability 24/7. Value-added resellers (VARs) and distributors will be hit hardest Cloud services are delivered and ready to go, via the Internet. Immediately, this impacts VARs that make their money from managed and professional services. Complex enterprise software will still need configuring, but in many cases customers will no longer need resellers to physically deliver, install and configure software and hardware on-site. Distributors also find their revenues under major pressure. There's less need for them to provide inventory and financial services for vendors and resellers. Those that shift their focus towards marketing and sales, including channel partner recruitment and enablement, will be more insulated. Some distributors will invest in their own physical data centres to serve as cloud centres for their partners to resell as managed services. Others will retail infrastructure-as-aservice (IaaS) to partners but deliver it through wholesaling cloud providers, such as telcos. Can IT consultancies roll out their own cloud offerings? Many IT consultancies would like to position themselves as cloud service providers. In theory, they can take advantage of their existing customer base and offer subscription services with higher margins. However, IT consultancies face barriers. As findings from the survey above illustrate, a substantial number of channel partners are put off by the high costs of building a cloud infrastructure and the difficulty of having the skills necessary. So how can IT consultancies benefit from the cloud and win more business from their customers - without facing massive cost and risk? Are their vendors willing to help them to achieve their goals? 3

4 How Colt enables IT consultancies to succeed in the cloud Colt offers a new business model to enable channel partners to thrive in the cloud arena. Our complete range of IT-as-aservice offerings covers everything from desktops to servers, storage, networks, and business productivity applications. Our channel model offers you a unique opportunity to introduce and deliver hosted cloud services SME and enterprise organisations. You understand the IT needs, budgets and challenges of these customers. As a Colt partner, you can enable your customers to move away from the often cumbersome, investment-heavy process of buying, managing and maintaining their own IT. You can offer them an alternative that's flexible, on-demand and resides on our fully-supported, class leading hosted infrastructure. Working with Colt, you can match your expertise with our highly available cloud services to solve their business problems with leading-edge, end-to-end cloud services. The Colt channel programme enables and rewards partners who deliver the best IT solutions to their customers. Our platform provides you with automated business processes (billing, provisioning and customer management) and the bringing together of IT services, all via one shop window. We also provide you with collateral, proactive go-to-market campaigns and compelling product demonstrations to enable you to easily sell face-to-face, on the phone or via webinars. With Colt, you benefit from: Recurring revenue streams: Earn predictable monthly revenues, rather than one-time-only fees. Reduced overheads: Use our fully managed platform to rapidly build and deliver standardised solutions. Greater customer loyalty: Our platform enables ongoing contact, excellent support and an expanding portfolio to build long-term business relationships. Competitive edge: Win deals by offering pay-as-you-use solutions that save customers from risks and investment. Arm yourself with an enterprise-level platform and protect your revenues from direct sales vendors such as Amazon and Google. Benefits of the Colt channel programme Selling smarter The cloud changes the traditional sales, marketing and delivery model to a new on-demand mechanism, with recurring revenues and exciting up-sell/cross-sell opportunities. Colt s partner team can help your employees adopt new sales strategies, highlight service benefits and spot new sales opportunities. Our focus is on phasing Colt's cloud services into your existing portfolio in a complementary way rather than introducing new services that simply replace older ones that are still earning money. Sharper marketing Competition to bring cloud services to SMEs will become more intense. Colt invests in marketing to educate end users, so you can get traction quickly with your customers. Streamlined processes Cloud services are billed by the day and must reflect any tiny changes made by customers at any time. Traditional systems might struggle with the complexity but Colt provides the entire back office for billing and customer management, which can integrate seamlessly with your business. Collaborative ecosystem Every Colt cloud partner has different strengths: some are outstanding at infrastructure, some at sales, and others are experts at development and integration. Connecting partners benefits everyone. Colt introduces partners so they benefit from each other's knowledge and combine to deliver innovative, end-to-end solutions for their customers. 4

5 White labelling: It's our cloud but it's also your cloud White labelling lets you fully re-brand Colt s IT platform to provide an on-demand cloud service to your customers. From their perspective, the cloud services appear to be completely created, delivered and invoiced by you. This business model provides you with a tried and tested solution without any investment and the ability to launch within weeks, rather than years. Create your cloud services With Colt as your partner, you can build your own cloud computing offerings, resources and bundles. Price them however you wish and combine them with discounts and promotions. You can also tailor them to target specific vertical markets and your customer base. Full API Colt provides powerful user interfaces for you to manage and provision services into the cloud platform. We also offer an API via XML RPC for partners looking to integrate an existing infrastructure or control panel. Managed or Unmanaged For customers with simple requirements, our standardised and managed SaaS applications can meet their needs at lowest cost and with minimal intergration requirements. However, for customers with more sophisticated needs partners can tap into our award-winning Infrastructure-as-a- Service to build custom environments tailored to each client.. Back office provisioning With Colt, you can control provisioning of your products and services, defining rules for automatic or manual provisioning. It's also possible to add payment workflows, and managed your services in real time. Customer relations Colt enables you to control all your customer information, invoicing, products and services. You can drive up-sell and cross-sell opportunities and use the platform to send newsletters and information to your customers. Customer Interfaces A fully branded, aggregated and web-based interface lets your team and your customers access their services online. Easy and intuitive, it allows them to help themselves and thus reduces their support needs. It also provides instant access to services and the ability to change them on demand. Language packs are available if you wish to sell to customers overseas. Ecommerce store If you want to offer transactional services, Colt provides a white label ecommerce store and self-service interfaces that link automatically to provisioning and processing. Billing engine As a Colt cloud partner, you can use our full utility billing system that can handle pro-rata utility services, multiple payment types and different currencies. This can be used to manage and bill your customers if you wish. Alternatively, invoicing data for your cloud business can be easily exported and synthesised with your existing billing systems. About Colt Colt is the information delivery platform, enabling its customers to deliver, share, process and store their vital business information. An established leader in delivering integrated computing and network services to major organisations, midsized businesses and wholesale customers, Colt operates a 22-country, 44,000km network that includes metropolitan area networks in 39 major European cities with direct fibre connections into 19,000 buildings and 20 carrier neutral Colt data centres. Information about Colt and its services can be found at Discuss or simply find out more To find out more, please contact us at or visit us at ceano.colt.net 2014 Colt Technology Services Group Limited. The Colt name and logos are trademarks. All rights reserved. Other names, logos and trademarks belong to their respective owners.

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