Insight

Embrace cloud shift – or face becoming obsolete, channel told

The channel press reported this week that “technology and service providers that fail to adapt to the pace of cloud shift face increasing risk of becoming obsolete or, at best, being relegated to low-growth markets.”

That was from a Gartner report that said enterprise IT spending on public cloud computing will overtake spending on traditional IT in 2025.

It said that by 2025, 51 percent of IT spending across application software, infrastructure software, business process services and system infrastructure markets will have shifted from traditional solutions to the public cloud, compared to 41 percent in 2022.

Gartner issued its warning to IT providers noting that the shift to cloud has accelerated in the past two years due to Covid-19. If we are to believe the vendor marketing, you should be hard pressed to find a channel partner today that isn’t providing some kind of cloud service. But perhaps it is the “pace” of the shift to cloud of which the analyst thinks IT providers should take more notice.

In 2022, more than $1.3 trillion in enterprise IT spending is at stake from the shift to cloud, growing to almost $1.8 trillion in 2025, according to Gartner. Ongoing disruption to IT markets by cloud will be amplified by the introduction of new technologies, including distributed cloud. Many will further blur the lines between traditional and cloud offerings.

Enterprise adoption of distributed cloud has the potential to further accelerate cloud shift because it brings public cloud services into domains that have primarily been non-cloud, expanding the addressable market, it notes. Organisations are evaluating it because of its ability to meet location-specific requirements, such as data sovereignty, low-latency and network bandwidth.

To capitalise on the shift to cloud, Gartner recommends “technology and services providers target segments where the shift is occurring most aggressively, in addition to seeking new high-growth cloud opportunities.”

For example, infrastructure-related segments have a lower level of cloud penetration and are expected to grow faster than segments such as enterprise applications that are already highly penetrated.

“Providers should also target specific personas, adoption profiles and use cases with go-to-market initiatives.”

Gartner’s recommendation is certainly food for thought for the channel, and one to keep an eye on as we hopefully start to look beyond the pandemic.

 

Simplifying the partner experience

Just a note on a vendor announcement this week. We talk a lot about the importance of the partner experience (PX) here, and how it’s time vendors started thinking about how easy they make it for partners to work with them.

The good news is that more often now we hear of vendor efforts to simplify the experience – which is what happened this week with Dell re-launching its partner programme to make it less complicated and more consistent for partners.

Going forward, Dell said there will be just one incentive structure, one tier structure and one set of tier requirements for all partners.

The need to improve PX is, admittedly, complicated by the fact there is no ‘one-size-fits-all’ to a successful partner programme these days – there are too many partner types and different business models for that. But Dell says the changes it is making will result in “consistent incentives regardless of partners’ route to market.”

We shall see how the changes are received by partners, and if any other vendors follow suit.

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