cloud computing : rethink your channel

Cloud Computing Impacts on Channel

Personal Computers

Internet

Cloud Computing

80s 90s 00s 10s 20s

History of IT Channels

Solutions as an.... UTILITY

UTILITY becomesVERSATILITY

On

eN

eed

On

eA

pp

€10B in 200940% CAGR75% of Companies use one application in SaaS

In 2010, 45% of Companies will spend > 25% of their IT budget on SaaS compared to 23% today

New Internet Bubble?

Massive & global opportunity

Very fast growth

Viral and ground-up expansion

Capital available for SaaS players

Many ill-defined business models

Business as a Service

Software as a ServiceInfrastructure as a Service

Business as a Service

Any application licensed for its usage on demand (mostly over the web)

Server VirtualizationStorage VirtualizationAdvanced lease infrastructure (pay per use) Grid Computing

New Way of BuyingNew Way of Selling

Disruptive for Customers

• Acknowledge the benefits for their own business compare to existing solution

• Support the idea of an externally hosted model

• Define what to do with existing assets (save waste)

• Accept transition costs + workload

• Check possibility of changing budget allocation from Capex to Opex

Deci

sion P

att

ern

Disruptive for ITC Channels

Limited room for IT services (design)Revenues cannibalization riskLimited presence in SME

Long customer decision cyclesRequire market expertiseRevenues cannibalization risk

Require market expertiseLimited IT knowledgeLack of agility

IT Resellers & Distributor

s

ServiceIntegrators

Telcos

PurposeAre common IT Business

Rules applying to

Cloud Computing?

IT Distribution today

No infrastructure to sell

No service to sell

No supply chain

IT/Telecom Resellers

VARs/Integrators

Distributors

CloudComputing

Time to rethinkIT DistributionTime to rethinkIT Distribution

Converting Channels

CreatingChannels

Converting Channels

CreatingChannels

Motivate IT Resell Channel

Channel proposal to be at least as rewarding as infrastructure + on-premise software(ie: extra services)

Remuneration scheme to be rewarding at customer contract sign off

Identify business for them and coach their business development efforts

Motivate System Integrators

Channel proposal to be integrated in a broader service proposition to customers

Possibility to host application or customer data for the SI to propose outsourcing package

Solid technical interface

Motivate Telcos

Possibility for the Telco to host application or customer data (branding option)

Solid on-boarding program for sales & technical teams

Dedicated teams to do out-band prospection

Example BT

Porfolio expansion through a multi solutions offering

Data/Applications hosted by BT

Complementary to broadband internet offering

Converting Channels

CreatingChannels

Vertical Channel

Customer

VerticalChannel

Point ofpurchase

Service Provider

Need Identification

A Massive Presence

120 000 Companies*

IT CompaniesResellers

Integrators

BusinessServices

Companies

1 800 000 Companies**

(*) EMEA Source Compubase

(**) Western Europe Source IDC

Services categories

CollaborationSales &

Marketing Manufacturing HR

AccountingFinance/

Insurance

Business consultantMarketing agencies

Accounting Companies

Marketing AgenciesTraining

CompaniesBusiness

Consultants

Outsourcing servicesBusiness

Consultants

HR consultantsBusiness

ConsultantsAccounting Companies

Accounting CompaniesBusiness

Consultants

Hybrid Model

Direct

Contractual ChannelNon-Contractual

ChannelResellersResellers + ServicesIntegrators/ OEM

ReferralsInterfaceFacilitator

Non-Contractual Resellers

Role Compensation

Referral• introduce the product to

customer• register the customer

• 10% discount• no upfront payment

Interface

• introduce the product to customer

• register the customer• invoice the customer

• 20% discount• no upfront payment

Facilitator

• introduce the product to customer

• register the customer• invoice the customer• train the customer

• 30% discount• Online training• no upfront payment

Vertical Channel Platform

Business Services

Interested Not interested

Portfolio extension Services

opportunityRecurring model

Credibility

Certification/ upfront contract

Complicated process

Technical involvement

Huge variety of Companies90% between 1-10 employees (many free-lance)In all businesses

Motivate Vertical Channel

Turnkey solutions

Hassle free resell platform

Direct customer support/hot line

Room for consulting services

Aggregators

ApplicationHosting

DataHosting

Servicing(billing)

Resellers

Customers

ApplicationsProviders

Aggregators Channel

Aggregators

Interested Not interested

Solid value proposition

Room for hosting application & dataRecurring model

No markup possibility

Mostly startup CompaniesVarious business modelsVarious services offering

Motivate Aggregators

Make sure there is room in your business models for them to provide: access to specific channels, customers or complete your service offering

One on one negotiation

Example RevevolConsulting Company assisting large Companies in their IT decisions

Becomes involved in reselling IT solutions with the Cloud Computing

Signed agreements with several SaaS/Cloud players including Google Aps

Just bid with Valeo for the installation of 30 000 users with Google offering

The new channel map

Converted Channels

Direct Play

Vertical Channels

Aggregators

IT Channels

System Integrators

VARs

Telcos

OEMs

Direct

Consultants

Accountants

Marketing Agencies

Application Hosting

Data Hosting

SaaS Resellers/Dist

Don’t push on a rope

Demand Generatio

n

Demand Fulfilment

Fulfilment vs Generation

Demand Fulfilment Generation Comments

IT Vendor direct ***** ***** Full dedicationLimited capacity

IT Vendor Channel **** * Great coverageLimited mindshare

Integrators *** *** Good coverageGood push

Vertical Channel * **** Proactive demandNo supply chain

There is no perfect channel

There is only a perfect balance

Dealing with complexityExpanding to

Europe

Expanding to US

How to compensate the channel?Converting channel

or creating channels?

How to get channel loyalty?

How to reach resellers?

How to get reseller

commitment?

How to train resellers?

How to follow up their business plan? How to negotiate a

contract?

How to build a platform for vertical

resellers?

Direct or Indirect?

Cloudy Channels

5 Step Process

BusinessIdentification

ChannelFramework

ChannelRecruitment

ChannelRamp Up

ChannelManagement

Recruiting and Developing Channelsfor IT Companiesin EMEA and US

Features>200 years of cumulated experience in business/channel managementWide knowledge across IT (Hware, Software, Telecom & Services)

Europe, Middle-East & Africa, U.S. coverageIn depth local knowledge

Services designed for SaaS & Cloud CompaniesChosen by leading Companies

Celsius International: market and customer dataCompubase: channel data

Easy to turn on and off - Immediately operationalEasy to expand or contract

Result driven compensationThe right skills for the right job

Expertise

Coverage

SaaS/Cloud Expertise

Partnership

Flexibility

Cost effectiveness

BenefitsImmediate access to Cloud/SaaS business management expertise when you need it

Immediate access to most European, Middle East and African countries

Immediate access to U.S.

Result driven & cost effective services

Led by IT Senior Business Managers

Thanks!Nathalie.monnaux@Lemon-Operations.com