Clouds to Kill Solution Providers?

Whenever we buy a latest technology,
we invite certain threats free of cost. Today, major IT companies
like Microsoft, HP, Dell, IBM, Sun Microsystems, Oracle,
Salesforce.com and Amazon are driving towards providing a variety of
cloud based platform and application services. Experts predict that
over the next decade, cloud based services will be the new arena of
intense competition. A lot has been discussed about the pros and cons
of the various services. However, very little has been talked about
the impact on the channel. The channel community comprising system
integrators (SIs), dealers, resellers and retailers form the
essential mechanism of any IT vendor's business, who take the
products and solutions to the end-customer. This is particularly true
in the SMB market, where a vast majority of opportunities can only be
addressed through the channel. Today, many IT companies are
particularly dependent upon the channel to maintain their position in
this market. A recent survey on the future of the internet expects
that, by 2020, most people will access software applications online
and share and access information through the use of remote server
networks, rather than depending primarily on tools and information
housed on their individual, personal computers.

The researchers say that cloud
computing will therefore become more dominant than desktop in the
next decade. In other words, most users will perform computing and
communication activities through connections to servers operated by
outside firms. One can foresee the situation with the populating
cloud services in the form of social networking sites (the 500 mn
people using Facebook are being social in the cloud), webmail
services like Hotmail and Yahoo mail, microblogging and blogging
services such as Twitter and WordPress, video-sharing sites like
YouTube, picture-sharing sites such as Flickr, document and
applications sites like Google Docs, social-bookmarking sites like
Delicious, business sites like eBay, and ranking, rating and
commenting sites such as Yelp and TripAdvisor.

Peter D'Almeida, MD and chief
executive, N-able, Sri Lanka whose company is the key player, found
his greatest opportunities in virtualization. “Anyone who sells
virtualization and if you are not in that, it will straight away
disrupt you even though it has nothing to do with cloud,” he says.
However, he bravely bites the bullet when he predicts that cloud
could put lot of the partners out of business. He therefore asked the
partners to be up-to-date with the changing trends. Almeida cited
examples to illustrate this impending challenge. The main airline of
Sri Lanka now wants to have their data centers outside, ie, have
their data reside on the cloud. This scenario could lead to the
channel becoming completely redundant and gradually fade to oblivion.
He also said that the Microsoft with a $23 bn channel revenue, will
completely vanish in the forthcoming years and urged the partners not
to plan for any business for Microsoft enterprise applications.

The channel partners might need to
completely redefine themselves to be relevant in a 'cloud'y
world. “The telecommunication providers will be in need of SIs to
go to the market and partners can become cloud builder and help other
companies build private cloud. He further urged the partners not to
jump too long but offer simple services first. “Eventually, in
future a lot of applications will come from the cloud. Moreover, all
software will be designed with mobility in mind,” D'Almeida
adds. Coming to Indian scenario, the cloud has received wide-range of
responses. Cloud computing being the new vogue will certainly see
success. Researchers predict that the market in India is very
promising and hopeful. In next 5 years, India will play a major role
in the growth of cloud computing. The kind of leap and bound India
has seen in technology over the last few years is astonishing and
according to current market predictions, it will keep up the good
work. Pradeep Rathinam, CEO, Aditi Technologies says, “More than
50% of future revenues directly or indirectly will be generated from
our cloud services division.”

“The adaptation of cloud will be
a key competitive advantage for our customers and will be the
dominant technology paradigm for going forward. Over 70% of all
enterprise apps and ISV products will move to the cloud in the next
5-10 years,” says Sriram S, CEO, iValue Info Solutions. Sanjay
Singhania of Sheeltron Digital Systems, says that he does not find
any type of threat from any emerging technology. “I do not find any
threat as far as the developing market scenario is concerned,” he
said.

However, there are some flip sides
among the Indian SIs for cloud. Like all great changes, cloud
computing comes with a lot of challenges. For example, if you lean
hard on cost-cutting, you could be on a path of eliminating most of
your staff along with the IT budget. Most chief financial officers
think that cloud computing is all about cutting the IT budget, so
they can drop more profit to the bottom line. That creates a perilous
situation for an IT department that could quickly become a shadow of
its former self.

Devesh Aggarwal of Compusoft too
opines the same. “Cloud in recent days is becoming a factor for
eliminating the partners. Vendors are directly getting in touch with
the customers and are working in such a way, as they are not
interested in working with partners,” he adds. “Virtualization is
the essential catalyst for cloud computing. With the virtualization
solution, we would be able to build on solid platforms and solutions
to power the private or hybrid cloud infrastructure, build and run
robust cloud applications and supply end-user computing as a cloud
based service,” says Cherian Thomas, director, Wysetek
Technologies. However, cloud security is one major area to be looked
into. “Cloud is going to be the future. However, the major
challenge in front of us is the cloudrelated security issues, which
have to be addressed immediately,” says Anand Kalyanaraman, country
sales manager, Frontier Business Systems. Dhirendra Khandelwal of
E-Square Technologies feels that even though cloud is emerging as a
threat, partners can find a lot of business opportunities in this.
“Partners can start private clouds and deploying private data
centers for others,” he further adds. Durganath K Venkata, VP,
business and development, Locuz Technologies says, “Cloud is a
threat only for those who are solely dependent on reselling. But,
companies who have their own consulting and professional services, it
will be definitely an opportunity for them,” he adds. Rajesh
Kothari of Blue Chip India says, “Definitely cloud is not a threat
but an opportunitiy. However, the major concern is that, how
companies take best advantage out of it.”