Cloud is shaking up software resellers

Software sellers are finding that the cloud is changing the way they do business.

It is the second biggest shake up for the industry since the internet created a viable direct network for business-to-business and consumer-to-business intercommunication and build a new channel for both product and service delivery.  Now software distribution has changed inside the new cloud web-based model.

Speaking to Channel Biz UK, Fabio Torlini, VP of Cloud at Rackspace said that Office-style productivity applications will still likely to be sold via more traditional means, but the tide is turning as more organisations are adopting the cloud.

According to Gartner, by 2014 the cloud will be responsible for around 90 percent of Software-as-a-Service (SaaS) delivery revenues. So we can see that the entire enterprise SaaS market is growing in importance.

“Every software reseller will know the importance of electronic distribution. Equally, they will all be aware of the way the cloud has made it possible to resell things like Exchange via a hosted model,” Torlini said.

Cloud-based delivery models are being adopted in sectors that have been considered more conservative in nature, such as financial services.

“The willingness among businesses to embrace the cloud means the outlook for those resellers not on board with it is becoming distinctly risky,” he said. Torlini said it was still unclear the precise extent to which SaaS now dominates the overall software sales market, or how big it can potentially grow to be.

However one “truth” that is generally accepted is that it is now an established part of the software landscape.

If you were on board when that particular tide turned, well done. But if you weren’t, you may well be have been left hoping that the rest of the IT sales market isn’t going to be disrupted to the same extent, he said.
Torlini claims that as a market opportunity, software sales has all but gone and disappeared.

“The truth is… unless you’re selling it via the cloud… the chances are you’re not selling it all,” he said.

The big what next is the thing you should be paying attention to now, and the smart money is on infrastructure as a service (IaaS) disrupting the reseller channel.

If the market is about to change again then resellers need to make sure you’re on board and well prepared, planned and provisioned from the start.

Resellers need to heed this wake up call and start thinking about market changes now because, sooner or later, there just might be be relatively little of the traditional IT sales landscape left, Torlini added.