Research Report. Abstract: The Impact of Cloud Computing on the Channel. September By Jeff Hine and Bill Lundell

Transcription

1 Research Report Abstract: The Impact of Cloud Computing on the Channel By Jeff Hine and Bill Lundell September Enterprise Strategy Group, Inc. All Rights Reserved.

2 Introduction Research Objectives Research Report: The Impact of Cloud Computing on the Channel In order to assess the impact of cloud computing services on resellers, ESG recently surveyed 187 senior business and technical managers at value-add channel organizations in North America. For the purposes of this study, ESG sought organizations identifying themselves as resellers, VARs, solution providers, managed services providers, or global and regional systems integrators. To ensure a focus on the traditional product resell channel, managed services providers were limited to a maximum of 20% of the respondents. Distributors were not included as respondents. All respondents were familiar with their organization s revenue models, value-add service offerings, and service offerings related to partnerships with cloud service providers as well as direct customer business related to cloud computing services. Specifically, the survey asked the following questions with respect to the current and planned resale of cloud computing services: 1 What actual demand are you seeing for cloud computing solutions from your customers? What factors are motivating you to include cloud services as part of your portfolio? What steps are you taking to support your overall cloud strategy? What are the most important attributes of a cloud service provider channel program? What changes are you making to your business model to address the cloud computing opportunity? How often are SaaS or IaaS options included in sales proposals and are customers requesting these options? What are the biggest challenges you face in transitioning to selling cloud computing services? How do you compensate your salespeople for recurring revenue deals such as cloud computing contracts? Would you prefer to work with pure cloud service providers or resell cloud services offered by your current technology (i.e., hardware and software) vendors? Have you lost business to a cloud service provider where you were proposing an on-premises productbased solution? If so, how often? What is your strategy for developing new relationships with cloud service providers? How important is the specific technology with which a cloud provider runs its infrastructure to you and your customers? What steps can your current product vendor partners take to help you be more successful in selling cloud computing services? What should the role of traditional technology distributors be in cloud computing? How do these answers differ by size of sales organization? For more details, please see the Research Methodology and Respondent Demographics sections of this report. 1 Note: Cloud computing questions in this survey focused on software-as-a-service (or SaaS) and infrastructure-as-a-service (IaaS) offerings. So-called platform-as-a-service (PaaS) offerings are beyond the scope of this particular study.

3 Research Methodology To gather data for this report, ESG conducted a comprehensive online survey of business/technical managers from value-add channel organizations in North America (United States and Canada) between May 31, 2011 and June 16, In order to qualify for this survey, respondents had to be familiar with their organization s revenue models, value-add service offerings, and service offerings related to partnerships with cloud service providers, as well as direct customer business related to cloud computing services. All respondents were provided an incentive to complete the survey in the form of cash awards and/or cash equivalents. After filtering out unqualified respondents, removing duplicate responses, and screening the remaining completed responses (on a number of criteria) for data integrity, we were left with a final total sample of 187 business/technical managers. Please see the Respondent Demographics section of this report for more information on these respondents. Note: Totals in figures and tables throughout this report may not add up to 100% due to rounding.

4 Respondent Demographics The data presented in this report is based on a survey of 187 qualified respondents. The figures below detail the demographics of the respondent base, including individual respondents current job responsibility as well as respondent organizations type of business model, total number of employees, and annual revenue. Respondents by Type of Reseller Organization The type of reseller organization that best describes respondents businesses is identified in Figure 1. Figure 1. Survey Respondents, by Type of Reseller Organization Which category below best describes your organization s business today? (Percent of respondents, N=187) Local or regional systems integrator, 5% National or global systems integrator, 17% Managed services provider (i.e., remote monitoring and/or management of customer IT infrastructure), 19% IT Value-Added Reseller (VAR) supplying hardware, software, and/or services, 60% Respondents by Customer Segments The customer segments providing the most revenue for respondent organizations is shown in Figure 2. Figure 2. Survey Respondents, by Customer Segments Providing the Largest Revenue Percentages Which of the following customer segments provides the largest percentage of your organization s total revenue? (Percent of respondents, N=187) Don t know, 4% Customers with less than 100 employees, 16% Customers with 5,000 or more employees, 33% Customers with 100 to 999 employees, 25% Customers with 1,000 to 4,999 employees, 22%

5 Respondents by Number of Employees The number of employees in respondents organizations is shown in Figure 3. Figure 3. Survey Respondents, by Number of Employees How many total employees does your organization have worldwide? (Percent of respondents, N=187) Don t know, 1% Less than 20, 19% 5,000 or more, 33% 20 to 44, 8% 45 to 99, 10% 2,500 to 4,999, 5% 1,000 to 2,499, 5% 500 to 999, 7% 100 to 249, 6% 250 to 499, 6% Respondents by Annual Revenue Respondent organizations annual revenue is shown in Figure 4. Figure 4. Survey Respondents, by Annual Revenue What is your organization s total annual revenue ($US)? (Percent of respondents, N=187) Don t know, 3% Less than $2.5 million, 15% $2.5 million to $4.999 million, 11% $100 million or more, 44% $5 million to $9.999 million, 7% $10 million to $ million, 8% $50 million to $ million, 4% $25 million to $ million, 7%

6 Respondents by Job Responsibility Respondents current job responsibility is shown in Figure 5. Figure 5. Survey Respondents, by Job Responsibility Which of the following best describes your current job responsibility? (Percent of respondents, N=187) Finance or other business management executive (VP, director, senior manager), 6% Senior technical/service delivery executive (VP, director, senior manager), 31% C-level executive, 14% Other management, 19% Sales / marketing / business development executive (VP, director, senior manager), 29% Respondents by Extent of Billable Services Respondent organizations percentage of employees dedicated to delivering billable services is shown in Figure 6. Figure 6. Survey Respondents, by Percentage of Employees Dedicated to Delivering Billable Services What percentage of your organization s employees are dedicated to delivering billable services to your customers, including professional services, support services, managed services or cloud computing services? (Percent of respondents, N=187) Don t know, 2% Less than 10%, 7% 10% to 25%, 16% More than 50%, 48% 26% to 50%, 27%

7 Contents List of Figures... 3 List of Tables... 4 Executive Summary... 5 Report Conclusions... 5 Introduction... 7 Research Objectives... 7 Research Findings... 8 The Channel s Stance on Cloud Computing Services... 8 Current Resellers of Cloud Computing Services Conclusion Appendix Planned Resellers of Cloud Computing Services Research Methodology Respondent Demographics Respondents by Type of Reseller Organization Respondents by Customer Segments Respondents by Number of Employees Respondents by Annual Revenue Respondents by Job Responsibility Respondents by Extent of Billable Services... 50

8 List of Figures Figure 1. Plans for Selling Cloud Computing Services... 8 Figure 2. Market Demand for Cloud Computing Services, Current vs. Planned Resellers of Cloud Services... 9 Figure 3. Organizational Philosophy Regarding Cloud Computing, Current vs. Planned Resellers of Cloud Services Figure 4. Lost Sales Attributed to Cloud Computing, Current vs. Planned Resellers of Cloud Computing Services. 11 Figure 5. Motivating Factors for Offering Cloud Computing Services, Current vs. Planned Resellers of Cloud Services Figure 6. Types of Cloud Computing Services Being Resold Figure 7. Individuals/Functional Groups Advocating for Cloud Computing Services at End-user Organizations Figure 8. Applications Most in Demand to Be Delivered via the SaaS Model Figure 9. Infrastructure Types Most in Demand to be Delivered via the IaaS Model Figure 10. Biggest Challenges in Selling Cloud Computing Services Figure 11. Steps Taken to Support Cloud Computing Strategies Figure 12. Compensation Models for Recurring Revenue Streams Figure 13. Most Appealing Compensation Models for Selling Cloud Computing Services Figure 14. Preferred Source for Cloud Computing Services Figure 15. Strategies for Developing Cloud Computing Service Provider Relationships Figure 16. Most Important Criteria for Cloud Service Providers to Offer as Part of a Channel Program Figure 17. Alignment Between Cloud Services Underlying Technology and Current Vendor Partnerships Figure 18. Importance of Aligning Vendor Partnerships with Underlying Technology of Cloud Services Figure 19. End-user Sales and Marketing for Cloud Computing Services Figure 20. Importance of Underlying Cloud Service Technology Vendor Brand to End-user Customers Figure 21. How Technology Vendors Can Help Drive Sales of Cloud Computing Services Figure 22. Incentives Provided by Technology Vendors for Reselling Cloud Services Leveraging Their Technology29 Figure 23. Current Resellers Preferred Source for Cloud Computing Services Figure 24. Role Current Resellers Want Distributors to Play in Helping to Build Cloud Computing Services Figure 25. Types of Cloud Computing Services Planned Resellers Expect to Offer within the Next 12 Months Figure 26. Individuals/Functional Groups that Planned Resellers Believe are Advocating for Cloud Computing Services at End-user Organizations Figure 27. Biggest Concerns about Selling Cloud Computing Services for Planned Resellers Figure 28. Steps Planned Resellers Will Take to Support Cloud Computing Strategies Figure 29. Compensation Models Planned Resellers Expect to Use for Selling Cloud Computing Services Figure 30. Planned Resellers Expected Source for Cloud Computing Services Figure 31. Planned Resellers Strategies for Developing Cloud Computing Service Provider Relationships Figure 32. Most Important Criteria for Cloud Service Providers to Offer Planned Resellers as Part of a Channel Program Figure 33. Alignment Between Cloud Services Underlying Technology and the Current Vendor Partnerships of Planned Resellers Figure 34. Importance to Planned Resellers of Aligning Vendor Partnerships with Underlying Technology of Cloud Services Figure 35. Planned Reseller End-user Sales and Marketing Efforts for Cloud Computing Services Figure 36. Importance Planned Resellers Believe End-user Customers Assign to Underlying Cloud Service Technology Vendor Brands Figure 37. How Technology Vendors Can Help Planned Resellers Drive Sales of Cloud Computing Services Figure 38. Incentives Planned Resellers Expect from Vendors for Reselling Cloud Services Leveraging Their Technology Figure 39. Planned Resellers Preferred Source for Cloud Computing Services Figure 40. Role Planned Resellers Want Distributors to Play in Helping to Build Cloud Computing Services Figure 41. Survey Respondents, by Type of Reseller Organization Figure 42. Survey Respondents, by Customer Segments Providing the Largest Revenue Percentages... 48

9 Figure 43. Survey Respondents, by Number of Employees Figure 44. Survey Respondents, by Annual Revenue Figure 45. Survey Respondents, by Job Responsibility Figure 46. Survey Respondents, by Percentage of Employees Dedicated to Delivering Billable Services List of Tables Table 1. Market Demand for Cloud Computing Services, by Size of Reseller Organization... 9 Table 2. Organizational Philosophy Regarding Cloud Computing, by Size of Reseller Organization Table 3. Types of Cloud Computing Services Being Resold, by Size of Reseller Organization Table 4. Individuals/Functional Groups Advocating for Cloud Computing Services at End-user Organizations, by Size of Reseller Organization Table 5. Biggest Challenges in Selling Cloud Computing Services, by Size of Reseller Organization Table 6. Compensation Models for Recurring Revenue Streams, by Size of Reseller Organization Table 7. Most Important Criteria for Cloud Service Providers to Offer as Part of a Channel Program, by Size of Reseller Organization Table 8. Alignment Between Cloud Services Underlying Technology and Current Vendor Partnerships, by Size of Reseller Organization Table 9. Importance of Aligning Vendor Partnerships with Underlying Technology of Cloud Services, by Size of Reseller Organization Table 10. Importance of Underlying Cloud Service Technology Vendor Brand to End-user Customers, by Size of Reseller Organization Table 11. Types of Cloud Computing Services Planned Resellers Expect to Offer within the Next 12 Months, by Size of Reseller Organization Table 12. Steps Planned Resellers Will Take to Support Cloud Computing Strategies, by Size of Reseller Organization Table 13. Planned Resellers Strategies for Developing Cloud Computing Service Provider Relationships, by Size of Reseller Organization Table 14. Most Important Criteria for Cloud Service Providers to Offer Planned Resellers as Part of a Channel Program, by Size of Reseller Organization Table 15. Importance to Planned Resellers of Aligning Vendor Partnerships with Underlying Technology of Cloud Services, by Size of Reseller Organization Table 16. Planned Reseller End-user Sales and Marketing Efforts for Cloud Computing Services, by Size of Reseller Organization Table 17. Importance Planned Resellers Believe End-user Customers Assign to Underlying Cloud Service Technology Vendor Brands, by Size of Reseller Organization Table 18. How Technology Vendors Can Help Planned Resellers Drive Sales of Cloud Computing Services, by Size of Reseller Organization All trademark names are property of their respective companies. Information contained in this publication has been obtained by sources The Enterprise Strategy Group (ESG) considers to be reliable but is not warranted by ESG. This publication may contain opinions of ESG, which are subject to change from time to time. This publication is copyrighted by The Enterprise Strategy Group, Inc. Any reproduction or redistribution of this publication, in whole or in part, whether in hard-copy format, electronically, or otherwise to persons not authorized to receive it, without the express consent of the Enterprise Strategy Group, Inc., is in violation of U.S. Copyright law and will be subject to an action for civil damages and, if applicable, criminal prosecution. Should you have any questions, please contact ESG Client Relations at (508)

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