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Cloud and mobility driving more profitable business models for APAC’s IT ecosystem

Zafirah Salim | July 16, 2015
Both cloud and mobility command about US$36.2 billion in revenue potential for IT companies in Asia Pacific by 2018.

Channel partners in Asia Pacific (APAC) with a strong focus on cloud and mobility solutions have been reaping great benefits in terms of revenue, margins and customers, according to an IDC study.

This finding highlights the importance for the IT ecosystem in APAC to transform their traditional solution offerings to suit a new mobile-first, cloud-first world.

In fact, IDC has projected staggering growth opportunities for IT companies betting on cloud and mobility solutions and services in APAC. According to IDC, the public cloud services market in APAC will double by 2018, growing from US$3.2 billion in 2014 to US$7.1 billion by 2018.

Mobility has also been identified by IDC to be much larger in revenue potential than cloud in the region, and is expected to grow by 46% from US$20.3 billion in 2014 to US$29.1 billion in 2018. Together, both cloud and mobility command about US$36.2 billion in revenue potential for IT companies in Asia Pacific by 2018.

Commissioned by Microsoft, the study polled over 200 of Microsoft's IT partners from nine markets across APAC, including Australia, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand and Vietnam.

The study revealed that cloud is the new norm in APAC. Cloud-oriented partners, with more than 50% of their revenues from cloud offerings, make 1.8 times more revenues and 1.4 times more gross margin compared to non-cloud oriented partners.

Cloud and mobility solutions are also found to be more profitable. Solutions partners can grow their gross margins by 20% and value-added resellers can increase their margins by 100% when they introduce cloud value-added services.

Another key finding of the study is that it is worthwhile to be an early adopter. Solution partners that were early to market with cloud and mobility "mash-up" offerings make 2.5 times more revenues and 50% more margins as compared to overall partner universe surveyed.

"The IT ecosystem has been core to our success for 40 years and will continue to be important to our ability to scale to the billions of users in Asia. Like all major technology shifts, there will be winners, losers and new leaders. The partner of the future has four key attributes for growth - they create scale, invest in differentiation, focus on value and win the hearts and minds of their customers. The ability of our partner ecosystem to be transformed into a profitable one is a top priority for us," said Ananth Lazarus, Partner Lead, Microsoft Asia Pacific.

"This is why we have invested US$225 million to transform our ecosystem in Asia Pacific through the right investments in training, incentives and business enablement. We are excited to see that many of our partners in this region are already transforming themselves alongside Microsoft to serve the needs of a different generation of customers in this region," he added.

 

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