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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

He said partners need to move away from having a cost-based reseller model to one that is value-driven and outcome based for customers.

"Value comes through a number of different forms -- experience in leveraging certified architects, doing projects multiple times for a variety of customers, subject matter specialisation in things like mobile applications in the Cloud, Big Data in the Cloud, or infrastructure migration services.

"If you focus on cost, that doesn't always get the best return. If you look at the breadth of the Cloud platform, as a partner, it is a great opportunity to work with the customer, for example, by migrating a single application workload to the Cloud. But, over time, that one project can turn into a full migration project," he said.

Gore added, it's something service providers can benefit from too. With Cloud, they won't have to worry about the procurement and sourcing of infrastructure, shipping it out, or any other logistics issues associated with it.

"The second benefit it has for partners is that they can start building up different areas of expertise around applications. There are different functional outcomes partners can specialise in as well when moving from a traditional CAPEX model to an OPEX one," he said.

Cloud pricing

Rumsey indicated all Cloud players have their own views on what they can achieve out of their pricing strategies based on how they're operating, which markets they are addressing, what their buy rates are on certain products, cost of datacentres, and cost of power.

"The cost of certain things, like hard disk space, is still dropping and will continue to go down. Have we dipped to a level that's unsustainable in the short-term? That's a question vendors will need to answer for themselves but there are some silly, hard-to-justify rates kicking around in the market and that needs to change," he said.

Parker said vendors that aren't in the Cloud market right now will soon have to do something aggressive in comparison to their existing models. Partners already in the Cloud will have to look hard at their current pricing models because they have been aggressively driving volume instead of driving value over the past 12 months.

 

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