Ingram Micro: Cloud Services Make Resellers More Important

Ingram Micro dispelled the fear that cloud services will take the channel out of the equation, saying that the cloud will actually open new doors for solution providers, especially those that embrace the cloud.

"The reseller's role is more important," Renee Bergeron, Ingram's vice president of managed services and cloud computing, told a room of 275 solution providers Wednesday during Ingram Micro's 2011 Cloud Services Summit in Phoenix.

According to Bergeron, cloud computing is complex and end users will turn to the channel to alleviate that complexity. Bergeron reiterated Ingram Micro's stance that the channel's role won't shrink in the cloud.

"There are no rules to this," she said. "It's not black and white."

Later, Bergeron added: "Complexity is what the reseller's role has been all about."

Bergeron said customers are challenged to find the right services that fit their environments and will rely heavily on the channel to build and integrate seamless cloud solutions. That, too, is an area where resellers continue to play a necessary role.

"The reseller's traditional role as a trusted advisor will become more important," she said, later adding, "I don't think there will be disintermediation, if anything, I think the role of distributors and resellers will be reinforced by cloud services integration."

Keith Bradley, senior executive vice president and president of Ingram Micro said the channel becomes increasingly more necessary as the idea of "IT-as-a-Service" continues to gel and solution providers offer not only cloud services, but a host of other capabilities as well.

"The cloud enables and sort of becomes IT-as-a-Service," he said, adding that the partner becomes the front line for cloud computing, SLAs, software, and hardware.

Bradley added that embracing the cloud gives solution providers a new revenue stream, new services opportunities and a new level of stickiness, all factors that help them build their own businesses.

But Bergeron cautioned that there are challenges for resellers and solution providers to crack the cloud services market. Hurdles like finding the right partner, revenue protection, sales training and sales incentives are par for the course.

Because cloud computing shifts revenue from a three-month cycle to up to two and three years, partners need to build out an annuity business and plan around that new revenue model.

"If you're a reseller that gets into cloud services early, it gives you the first-mover advantage," she said.

Bradley added: "Whatever resellers move to the cloud first … you're going to be ahead of your peers and your competition."

And because a cloud computing sale is different than an on-premise sale, partners need to shift how they train their sales forces. Bergeron said a cloud sale is not about speeds and feeds or bits and bytes, it's about business process and value. Cloud is also typically bought by CIOs and business decision makers, not IT departments, so the conversation needs to change.

Next: Ingram's New Cloud Services Portal Helps Partners Tackle Cloud

Bradley said solution providers need to "sell results," not technology. "What results are you trying to drive in your end-user business?" is a key question resellers must ask, Bradley said.

Same goes for sales incentives. Cloud services sales create revenue over the span of years, not months; meaning sales incentives around monthly revenue and margins is small compared to a traditional on-premise sales model. Bergeron suggested that cloud services solution providers create a separate quote and pay on the total contract, not on the margin or revenue.

And Ingram Micro is building out an ecosystem for cloud solution providers, Bergeron said, with the goal that "Ingram Micro wants to be the leading cloud aggregator for the channel."

To do so, Bergeron said Ingram Micro has established a cloud community, provided cloud business services and offered a comprehensive portfolio.

Part of that strategy included the launch of IngramMicroCloud.com back in November, which provided a single stop for reseller education and training, and the upcoming launch of the Ingram Micro Cloud Marketplace, through which channel partners will have access to cloud services offered by Ingram Micro vendor partners.

And Wednesday Bergeron said IngramMicroCloud.com has been updated to become a single cloud services aggregation portal for solution providers, and it will act as a single portal for procuring, billing, provisioning, authentication and SLA tracking for cloud services. The updated portal will be available to select partners in the third quarter and all resellers in the fourth quarter.

Ingram Micro has also put into place a due diligence and certification program and launched a new contracting approach with alleviates the burden on the partner to deal with various vendors and manage various vendor accounts; instead, partners can contract with Ingram.

Ingram has also assembled a broad portfolio of cloud services from a host of vendors targeting every facet of the cloud from reporting and collaboration to security and auditing.

Overall, Bergeron said, cloud computing is changing the face of the computing model, and Ingram Micro wants to be on the forefront.

"If you're still on the fence about cloud computing," she said, "I say embrace the cloud."

Bradley said that partners should dive into the cloud with urgency, lest they miss the boat.

"If you're going to continue to stand on the sideline and think its all hype, you're going to be left behind in your business," he said.