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Cloud: A tricky space to play in

Hafizah Osman | July 30, 2015
Industry experts have underscored how the pricing strategy of Cloud vendors has a huge impact as it affects both end-customers and smaller vendors

"And we know right now, a value-added reseller in the market is going to have significant challenges in the Cloud space as compared to a managed services provider. So if a price change of 10 or 20 percent is affecting you, it means you're not adding enough value in the overall model," Parker said.

Inabox Group CEO and managing director, Damian Kay, hasn't seen a major decrease in the price of Cloud-based deployments.

"When you look at the price to Cloud, people are starting to realise the cost of running Cisco or Microsoft environments is fairly high in the hardware environment. So we haven't seen a massive decrease in the price of Cloud-based deployments over the last two years.

"It's concern for me because as a smaller Tier two player in the market, competing against some of these big guys becomes more and more difficult."

But Kay indicated that what it does do is speed up people moving tin into the Cloud.

"So when you do a direct cost for cost comparison, between the cost of tin and the cost of Cloud over a three- to five-year period, it's not significantly different. But you get some other benefits such as more flexibility in terms of the compute or storage you require at any one time," he said.

Channel opportunity

So, in all of this, where are the opportunities for the channel?

Wayland said smaller Cloud companies have to partner with larger Cloud providers and resell their base offerings with some added value.

"If a channel partner is only running up one or two VMs then that's fine but if you start working around a whole range of things like production workloads, security, management, storage, and so on, that's where they have an advantage," he said.

He said it opens up opportunities for distributors, as well, as they will be able to offer a range of those solutions through their aggregation portals.

For example, companies such as Distribution Central, Westcon, Dicker Data and Ingram Micro, have all announced Cloud plays where the channel can purchase those Cloud providers' products and then add value to it.

Kay said, strategically, smaller Cloud vendors should offer a bundled total solution that includes an integrated Cloud, IT and telco environment. "You can cost subsidise and gain your efficiencies through a holistic solution rather than having a standalone Cloud solution, which Microsoft and AWS tend to do. A bundled solution across IT will include support, virtual-desktop, voice, data, compute, storage, back-up, telecommunications, real-time applications and Cloud applications."

Amazon Web Services Asia-Pacific head of technology, Glenn Gore, said public Cloud puts a lot of price and pressure on projects both for partners and customers in the industry.

 

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