Distributors: We Bring Value To Cloud Computing, Office 365

Just what is the role of distributors -- and the solution providers they serve -- in an IT industry that's increasingly focused on cloud computing?

That was the question posed to representatives of the leading distributors during a Q&A session at UBM Tech Channel's XChange Solution Provider conference this week. The answers: Distributors see themselves as fulfilling a number of solution providers needs in a cloud-focused world, from managing cloud service logistics to helping the channel evaluate the true value of vendor offerings.

As cloud computing becomes more prevalent, there's been increased talk of "disintermediation" between vendors, distributors and solution providers, raising the question of the role distributors will play in this new world.

[Related: The Massive SaaS Opportunities For VARs ]

A prime example is Microsoft's Office 365 cloud application set. While Microsoft initially sold the service direct to customers, with channel partners serving in a consultative and supporting role under the "Advisor" program, the vendor recently launched the Office 365 Open program under which partners can buy the service through distributors and sell it to their customers.

Office 365 "is creating a new business model for our channel," said Eric Martorano, senior director of Microsoft's U.S. SMB Channel Group, who co-chaired the discussion with Robert DeMarzo, senior vice president of strategic content at UBM Tech Channel.

"At the end of the day, at each inflection point, it becomes clear that, in fact, distribution does have a place, can add value," said Stacy Nethercoat, vice president of software product marketing at Tech Data. "It's around identifying the unique challenges around a technology change or, in this case, a change in the consumption model."

As cloud computing becomes more pervasive, the value provided by channel partners "is really around consulting, customization and integration," said Renee Bergeron, Ingram Micro vice president of managed services and cloud computing. "The channel's real value is understanding their customers' needs."

Distributors, Bergeron said, help solution providers determine which vendor's cloud systems "have real value."

NEXT: Distributors Launch Cloud, Office 365 Open Programs

Tech Data also works to identify IT vendors "that are both channel ready and have viable cloud solutions," Tech Data's Nethercoat said. That's particularly true of emerging "born-in-the cloud" vendors. "We think it's important for us as distributors to vet these vendors and make sure they're channel-ready," she said.

Under the Office 365 Open initiative, the cloud application service is being sold through distributors as a SKU, which Nethercoat said allows distributors to help partners cross-sell and up-sell new services to their customers and combine Office 365 with third-party software and services.

Tech Data has a "TD Cloud" dedicated business unit that works with solution providers to help them develop cloud-computing practices. The distributor also developed a platform for managing "micro transactions" to handle Office 365 Open sales and renewals.

"I think Office 365 is a great example of an offering that really fits [channel partners'] businesses very, very well," said Jeff Davis, D&H Distributing senior sales vice president. He estimated that some 60 percent of SMB customers the distributor has recently spoken to are interested in adopting cloud technology in the next six months.

This week, D&H unveiled a program that helps channel partners offer cloud services to their SMB customers through Cloud Nation, a cloud services aggregator. Davis also said D&H is working to help educate customers about the benefits of cloud services.

Distributor Synnex Corp. has launched a "Capture the Cloud" program that provides channel partners with marketing assistance, demand generation, weekly Webinars and other resources to help grow their Office 365 and cloud business.

"By having this program, it really allows us to put monies into your growth and your acceleration of cloud," said Donald Lopes, director of cloud services at Synnex. "It's really an opportunity for you to leverage a set of knowledge experts through trusted relationships that you've built over many years," he told XChange attendees.

Hosted email services, including hosted Microsoft Exchange, is often "the door opener to the cloud" for many customers, Ingram Micro's Bergeron said. Then they add antivirus security services and backup and recovery services. "We're seeing resellers start out initially as brokers," she said, offering a service like Office 365 to gain an understanding of the marketplace.

The work is paying off. Ingram enlisted more than 1,000 resellers in 2012 to carry cloud services, Bergeron said, with the average partner carrying two-and-a-half or three cloud solutions. "We're seeing adoption grow much faster."

PUBLISHED MARCH 12, 2013