Thursday, July 8, 2010

ZSL in Channel Pro Magazine's Cover Story : Cloud Programs for Partners

Providers of cloud computing services are turning to the channel to help manage historic customer demand. Here’s a taste of what the top providers’ partner programs are offering. By Lauren Gibbons Paul

Even for an industry prone to hype, the hubbub surrounding cloud services is, well, sky-high. Few sectors have garnered more interest or headier predictions than cloud computing, a phrase that refers to running data centers on the Internet.

Virtualizing the IT environment in this way differs from traditional computing and outsourcing in that infrastructure is located “in the cloud” (on the Internet) as opposed to on premises. Cloud-based services carry all the benefits to the user of the software-as-a-service (SaaS) model—no need to pay up front for infrastructure, no need to run or maintain the environment, pay-as-you-go pricing, easy scalability.


According to IDC, public cloud services will outpace traditional IT spending over the next five years, representing $44.2 billion, or roughly 10 percent of all U.S. IT spending by 2013. IDC’s forecast does not include private cloud services, in which providers supply the virtual platform behind a firewall for greater security and better reliability. Amazon leads market share of the public cloud segment with its EC2 offering, and several players are vying to dominate private cloud services.

Gartner estimated worldwide cloud services revenue would surpass $56.3 billion last year, a 21.3 percent increase over 2008 revenue of $46.4 billion. By 2013, Gartner forecasts the market will reach $150.1 billion.

“We have been absolutely overrun with customer demand,” says Richard Reiner, Ph.D., CEO of Enomaly Inc. in Toronto. Targeting primarily the telecom industry, Enomaly has fielded more than 1,500 new customer opportunities since announcing its cloud-based Elastic Computing Platform last August.


OpSource Inc. is a service provider that started offering enterprise application managed services eight years ago, which it has now moved to the cloud. When 70 percent of its new customers turned out to be resellers or VARs, management quickly realized that it needed a channel to capitalize on the opportunities.

“It became apparent to us pretty quickly that the consumption of infrastructure is still handled in many cases through the reseller or integrator, the trusted adviser,” says Jon Beck, senior vice president of sales and business development for OpSource Inc., in Santa Clara, Calif. “We developed a program designed for traditional resellers and white-labeling.”


Like the sound of these opportunities? Here’s what to look for when you begin to sort through the providers’ individual channel programs to see which one(s) might be best for you and your customers:

Flexibility and support are the top two things that attracted Shiv Kumar, executive vice president for ZSL Inc., when he began scouting out cloud partnership programs for his company last year. ZSL is an Edison, N.J., reseller of application migration services. Kumar liked the fact that OpSource offered two major options: the Cloud Service Referral Partner, which receives a straight percentage share of revenue, and the Cloud White Label Partner, in which resellers get a discount based on their volume of sales.

ZSL chose the latter. Kumar also appreciated that OpSource offers partners support. “They help a lot with lead and demand generation. We need to do cloud-readiness assessments for our customers, analyzing whether cloud makes sense. OpSource helps us make sure we are doing the right education,” says Kumar. ZSL representatives take prospects through an analysis of the application they are considering for migration, the underlying infrastructure, and usage patterns. For applications that are used 24/7, cloud may not be the best fit.

A collaborative approach was high on Justin Santa Barbara’s list when he went looking for a private cloud provider with which to partner. Founder of FathomDB, a San Francisco provider of cloud-based database services, Santa Barbara was already familiar with and using the Amazon public cloud. But he was disappointed with the level of interaction with that company. When Santa Barbara discovered the Rackspace Cloud, he was immediately won over.

Alignment with your organization and existing offerings. Independent analyst Rob Enderle cautions channel partners that plan to resell white-label cloud services to do all the due diligence they would before coming to market with any offering. “You need to do all the things you would do to rationalize a new product line,” says Enderle, principal at San Jose, Calif.-based Enderle Group. “You don’t want to have to retrain your sales force in order to sell this. If it requires a skill change to sell the product, it may not be efficient for you to do it. Read More

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