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Unbranded services are gaining popularity in the channel



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14 March 2017 | 0

Billy MacInnesRecently published research by the Cloud Industry Forum (CIF) in the UK, Cloud and the channel – Threat or opportunity, makes for interesting reading.

For example, there is a significant gap between customers and partners over cloud services. While the percentage of partners offering cloud services has increased marginally from 61% in 2010 to 65% in 2016, the figure for customers using cloud-based services has risen from 49% to 78% in the same period. As many as 63% of customers said they could see a time when they would move everything to the cloud.

CIF acknowledged that the number of channel organisations offering cloud services “appears to have plateaued somewhat” but added that those engaging with cloud were doing so “with much greater confidence and commitment”. There had been significant progress in the depth of cloud services offered and in the cloud implementation, management and contracting capabilities of channel organisations.

The channel was “assuming a much more active role in the delivery and management of cloud services for customers, which is critical if cloud service deployments are to be effective”, it added.

In terms of services offered, there was a small decline in SaaS (down from 81% in 2012 to 74% in 2016) and a big increase in PaaS (up from 28% in 2012 to 64% in 2016). Just under half (45%) offered IaaS. AWS was the most popular PaaS platform, followed by IBM, Microsoft Azure, Google and VMware.

In terms of benefits, 43% said cloud services boosted their competitive edge in the market, 40% believed it extended their services portfolio and revenue with a similar percentage highlighting the ability to offer more choice to customers. The benefits provided by cloud services helped to strengthen the channel’s commitment to cloud with 79% actively promoting cloud services as an alternative to on-premise solutions.

But CIF warned that much of the channel would remain dependent on traditional streams of revenue generation “for some time to come”. Resellers also faced a number of challenges, particularly the change in culture required to sell cloud services and skills shortages.

The research also found that white label services were important to partners with 86% identifying the ability to white-label cloud services as an important factor in their choice of which vendors to work with. As many as 52% said it was “very important”.

White-labelling was viewed by many partners as a very effective way to protect their brands and maintain control of the customer relationship when it comes to providing cloud services. Alex Hilton, CEO at CIF, acknowledged that it was “understandable” resellers would want to remain in control of their relationship with customers, having spent years building their brand and controlling the service they delivered to customers.

“This is clearly a part of the business that they are proud of and naturally keen to protect,” he said. So it should come as no surprise that resellers viewed white-labelled services as of increasing importance. “Vendors that don’t offer the ability to white-label their services are going to struggle to make much headway with their partner programmes,” he warned.

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