Cloud 101: 8 Steps To Becoming A Cloud Provider

Solution Provider Teaches 'Cloud 101'

Despite all the hype about cloud computing, many solution providers are still unsure of how to get started in the new technology.

Dave Sobel, founder and CEO of Evolve Technologies, a Fairfax, Va.-based solution provider, is on a mission to change that. Working with CompTIA, Sobel is teaching the basics of cloud computing to his peers, with an emphasis on customer requirements and what VARs can do to meet them.

CRN caught up with Sobel at this month's Tech Data Channel Link partner conference during his presentation entitled, "CompTIA's Quick Start to Building a Cloud Practice."

Turn the page for Lesson One of the class we've entitled, "Cloud 101."

The Cloud Is Real, The Cloud Is Here

Sobel told solution providers they need to understand that cloud computing is a growing part of the way customers do business.

For instance, he said, all businesses are on the Internet, giving them a base for using cloud computing. Customers are also already comfortable working in the cloud with such applications as Facebook. "People are putting all sorts of information on-line," he said.

Furthermore, the economic downturn has customers scrambling for new ways to cut costs, he said. That is especially true as new businesses weigh the options of buying their own IT infrastructure vs. outsourcing IT to the cloud. "If I were starting today, I wouldn't buy a thing," he said.

Sobel then offered his eight-step plan to working in the cloud.

Step 1: Understand The Opportunities

There are several approaches a solution provider can take to the cloud, Sobel said. These including consulting, providing managed services, capacity planning, managing and monitoring of backup system, acting as a broker or aggregator, and providing services for storage, security and database customers.

Sobel said to also consider integration and deployment of cloud technology. "It's not just flipping a switch," he said. "Help is still needed to integrate existing infrastructures to the cloud."

Step 2: Find The Right Business Model

Sobel said there are three basic business models for solution providers looking to take part in the cloud. One is the referral model, where the customer billing is done by a the provider of a cloud service. Another is the white label model, where the solution provider cobbles together multiple third-party services to build a unique offering for customers and handles the billing. A third option is for VARs to utilize the white label model to resell services provided by others.

"There are a lot of subtle variations, but in the end there are these three models," he said.

Step 3: Find Best Service Model For You

Sobel said solution providers need to find the best fit when it comes to the type of services they want to offer. He described three basic services models, including:

* Infrastructure-as-a-Service (IaaS), where servers and storage are delivered as a service, unlike collocation, where servers and storage are dedicated to specific customers. He cited Amazon and RackSpace as two prominent examples of IaaS.

* Platform-as-a-Service (PaaS), where the cloud provider provides a services base layer such as Microsoft Azure or Google App Engine on which customers can build and their applications.

* Software-as-a-Service (SaaS), where the customer's applications such as Salesforce.com, Office 365, and Google Apps are delivered on a subscription basis.

"You need to pick which of these services models fits where your business is growing," Sobel said.

Step 4: Assess Potential Cloud Delivery Models

There are currently four possible cloud delivery models from which solution providers can choose, Sobel said:

* Private clouds, where access to the cloud infrastructure is limited to a single tenant and both hosted and local resources are dedicated to that tenant.

* Public clouds, which are multi-tenant cloud infrastructures managed by a third party and open to anyone to use.

* Community clouds, in which a group of companies with similar requirements share a private cloud.

* Hybrid clouds, which link public and private clouds. For example, Sobel said, a company might run Office 365 in a public cloud in conjunction with Microsoft Active Directory in a private cloud.

Step 5: Determine Service Level Agreements

Solution providers must define the service level agreements (SLAs) they offer customers, Sobel said. This includes defining the level of commitment they can guarantee customers using clouds, and what they need to build in order to ensure they can meet that commitment, he said.

Step 6: Ensure Compliance And Security For The Cloud

Security of the cloud is still customers' No. 1 concern, Sobel said, and solution providers looking to become cloud providers need to address several issues including:

* Help customers understand potential security issues of the cloud and provide them the ability to manage access.

* Provide the required authentication and access technology to help customers manage data in the cloud, including the ability to automatically delete expired data.

* Ensure the reliability of the network and other technology customers will use.

* Understand the government or business regulations that are important to customers.

Step 7: Design A Training And Support Program

The training and support customers need will have to be determined long before they start working with their cloud, Sobel said.

"Just-in-time training doesn't work," he said. "We have to make sure most people are well-trained and engaged."

Step 8: Execute Your Cloud Plans

Solution providers need to review their plan, design, delivery, implementation, operation, and management on a continual basis with the primary goal being customer retention, Sobel said.

The revenue per deal in the cloud is on the average only half the revenue from a traditional solution, but if done well the solution provider gets recurring revenue over time, he said.

"This is not stealing customers from existing business models," he said. "It's creating new customers, or augmenting exiting environments with cloud services."

Getting Started

Sobel addressed many of the questions customers are now asking partners, said Steve Dillard, account executive at Advanced Micro Systems, a Visalia, Calif.-based solution provider and Cisco premier reseller.

"I'm trying to get a handle on this so I can find out where the fit is for us between buying and building and reselling," Dillard said.

The cloud is just the latest in a series of disruptive technologies that solution providers have had to navigate, Dillard said.

"Like any disruptive technology, this could put us out of business in three years," he said. "But we've been within three years of going out of business from disruptive technologies for over 20 years. It's a fun ride."