In part one of a five-part series, Freek Hemminga, LeaseWeb’s Global Channel & Strategic Alliances Manager, looks ahead to the challenges and opportunities for channel partners in the coming year.
In the last year, the whole business landscape for channel partners has changed thanks to the emergence of cloud. It has been a year of transformation and channel partners need to respond to this structural change in the market if they are to take advantage of the new environment and use it to spur growth for their businesses. These are some of the developments that I see happening, and the impact they have:
Changing customer demands
Increasingly, clients are demanding new services made possible through cloud technology. But very often it is new entrants to the market who are giving them what they want and established channel partners are being left behind. The new possibilities are having a major impact on the relationship between solution providers and their installed base as both face this new reality.
Failure to focus on core business
The main problem is that too often solution providers are continuing to rely on traditional transactional business and investing in non-core areas. They are spending a lot on infrastructure – and the manpower to operate it. And, even if they appreciate that they need to develop stronger service offerings based on the cloud, cash flow issues due to these heavy investments are preventing – or at least dramatically slowing down – their transformation to a services provision model.
In addition, they are finding that they need to invest heavily in compliance issues as clients demand tighter controls to ensure data privacy and security. Once again, this is a non-core activity that is a huge drain on a solution provider.
Lack of growth
The result of failing to have a cloud strategy is that solution providers are facing stalled growth because even their existing customer base is omitting them from the consideration phase for new projects. Not only that, they are also missing out on acquiring new customers of course.
For those who have embraced the transformation and have already embarked on their cloud journey, however, the rewards have been substantial. Research shows that solution providers who are moving away from traditional business models based on having their own infrastructure to new, added value models are showing greater growth and at a faster pace than their competitors.
Next week I’ll discuss the year ahead and talk about how the challenges that lie ahead will affect the channel. In the meantime, visit our site if you want to learn more about partnering with LeaseWeb.