At Cloud Expo, the Cloud Industry Forum will announce that the channel is out of touch with cloud wannabees
You guys are out of step with your customers when it comes to cloud services.
Not ChannelBiz talking but the Cloud Industry Forum (CIF), basing its assertion on the results of research it carried out recently. The Forum contrasted responses it received from 150 senior decision makers from MSPs, technical VARs and systems integrators, on one hand, and 250 end-users, on the other, about their cloud perceptions, experiences and hopes.
Savings or agility
The two main conclusions that CIF draws from its two studies is that end-users are more open to cloud adoption and that the reasons for customers wanting to move to services outsourcing are greatly misunderstood by the channel.
Andy Burton (pictured), chairman of CIF, commented, “It made interesting reading when you ask similar questions to both the consumer and supplier of a solution to gauge their independent perspectives of drivers and expectations.”
He discovered that 61 percent of end user organisations in the UK have formally adopted at least one cloud-based service and another 10-15 percent expected to adopt their first cloud service in 2013. This contrasts with channel attitudes where the projected rate of growth of income from cloud services between 2012 and 2015 showed an expected average of 25 percent over the whole term.
From this, the compound growth would be 7.5 percent per annum – less than half the organic growth anticipated by the end users. With 92 percent of current users saying that they were happy with their current services, only four percent said they were unlikely to ever implement a cloud service.
The apparent gap between channel and customer was also apparent when the drivers for cloud implementation were examined. Though the majority of providers cited cost savings (65%) and almost half added capital expenditure reduction as the major benefits, the users were more impressed with flexibility that cloud offered and time to market benefits.
Burton warned that suppliers risk being off-message if they project the importance of cost savings when most businesses are seeking flexibility and agility to improve and adapt their businesses to market conditions.
Reliability and education
At this point the question arises how dependable the reports really are because there can be a tendency for some respondents to answer the questions according to what they think they should be saying rather than the truth. Despite this, there is clear indication that the fears and concerns of both parties are identical.
The barriers that adopters see as obstacles are data security, privacy and sovereignty (which country’s laws govern the storage of data abroad) as the highest issues on the agenda followed by access to internet bandwidth and establishing trust with a CSP.
CIF member James Henigan (pictured), product and IT services director at infrastructure as a service provider Rise, said that in order for the channel to harness the full potential of cloud, greater education is needed in the market.
All of these concerns have been troubling potential cloud adopters for several years and it is worrying that they still top the bill today. As Henigan pointed out, there is a great opportunity for a bit of value-add education to address and qualm these fears.
The first problem to address is to make sure that all resellers have the same understanding of what exposure companies have. The key message is that cloud services usually have better security than an SMB can afford so data is probably safer in a cloud vendor’s hands. Uptime is often better for remote services than for on-premises installations, especially if an external systems engineer has to be called in.
Uptime is also improved because there is a saving of time for upgrades. The latest software version or security safeguards are available immediately without downtime.
“This presents a huge opportunity for channel firms – SMBs are screaming out for education around cloud adoption, and as the channel continues to develop its cloud proposition, they are ideally placed to support this market,” Henigan said.
“In order to meet the predictions set out by CIF, the channel must seize on this golden opportunity. It’s imperative the channel acts as the instigator, bringing cloud services to the SMB market and not waiting for their call. For those that don’t and just sit back, their business model will remain stagnant, as they are left behind by their more enterprising competitors.”
CIF will be revealing more details of its research at the Cloud Expo Europe in London’s Olympia conference centre.