Roy: I think it’s for the first time that we’re going to see with the advent of cloud that the IT manager goes from being reactive, and the whole IT department to becoming proactive. Often you go and ask them, they’ll say to you ‘I’m fearful of that managed service’ or ‘that cloud service’ and so ‘how many outstanding projects have you got to roll out today in this next 12 months’ and they’ll all pull out of their bottom drawer, a pile of projects like that and put them on the table ‘well there you go, now you can go and focus on some good proactive new things in the business projects, rather than worrying about whether the server’s patched, and whether that application is on the latest – all that disappears, and now they can start to focus for the first time on really advising the business on how IT can take them to the next step.
CRN: It must be a daunting task for resellers. Geoff, to what extent have you had to rethink your business to fit into this new cloud paradigm that we’ve been discussing?
Geoff: I’ve been very excited about the whole thing, and to be honest when we opened the doors in 04, the first thing we did was move an ERP that was hosted. So it’s been in our DNA more or less from day one, and we struggled with some of the box moving aspects that we do, simply because it still feels fairly inefficient.
I think any resellers that are looking at this right now should be really excited about it, because there’s a lot of stuff up there that they can leverage, that they can use for their clients, rather than having to spend a lot of money having to provide that for their customers. They can leverage it, and they can look at adding value through strategy and service.
Roy: I agree and if they don’t do that another reseller will. There are resellers embracing this technology today; they’re going to use this new technology as a calling point or reason to call a client that they couldn’t previously get.
But just going back to your points about the IT manager, again I disagree. If you look at most businesses they go to the IT manager today with their business problem, and Mr IT Manager, Miss IT Manager, we have this problem how do we get that solved – and they go away and find the technology or find the solution through their partner, or their own research. So I think we’re giving the IT Managers less credit than they’re due, really in terms of understanding the business, in understanding how to get a solution to solve the business.
They’re doing that today. Plus in the SME world they tend to also be the actual hands-on guy fixing things. These IT Managers you talk to today, do they just talk tech to you, or do they actually talk to you about a business problem and how can you solve it?
Geoff: One of the key challenges for those guys is they are aspirational in terms of their skillset. They are wanting to get advanced. They are wanting to get into virtualisation, they’re wanting to get into cloud and all the rest of it.
Here’s the problem, with budgets in IT slashed majorly, they’re struggling for resources; they’ve got huge amounts of risk management on their shoulders – so what do they do? They go to the tried tested and true model to solve business problems, and therein lies our challenge at the moment around our economy and the way business is operating, and also the shortage of skills here in Australia, it’s a challenge for a lot of organisations.
And you will find a lot of the bigger players are pulling good resources out of companies, so IT managers to be very fair to them, are struggling with a huge amount of tasks on their shoulders and also risk management. So often it’s better to go we’ll just put it in another box.
Roy: You made a good point, they are aspirational, they do want to be more of that business consultant – but it’s because they’ve got to keep the lights on, they become this ‘sleeves rolled up’ guy, rather than navigating a business.
Geoff: I think the challenge there for SME resellers is to have a wholesale sweep of services to offer, because what we’re hearing here is that it’s a pipeline for many things, so you can’t just be a work provider, you can’t just be a hosted exchange provider – you have to be able to provide an IT solution as a sweep.
Simeon: Yes, absolutely agree with that comment. I think if resellers think that cloud is simply about virtual servicing computing in the cloud, they are leaving a whole lot on the table, a number of opportunities where we’ve gone out to have a conversation about virtual computing, when all the customer wants is the latest version of Exchange Server and that’s turned into an Office 365 sale, you know significant. Our view of the cloud and I think many others’ view of the cloud is that it’s broader than just computing. It includes software in the cloud – productivity and security applications in the cloud.
The conversation can actually start at any point in the customer’s journey. A customer who has a private network may already have IP telephony and use that as a catalyst to explore all other cloud options or vice versa. So there’s a number of ways they can get into that.
Roy: I think the big area the next big phase in cloud is going to be this whole single authentication and security piece because like you guys say, you’re not going to buy one cloud service from one provider, you’re going to buy it from a multitude of providers. You may be using Office 365, or Google Apps, an ERP you could be housing, the VoIP could be brought from someone else. Their file serving and their disaster recovery could be sitting in someone else’s data centre. It’s now making sure that all of that works together harmoniously, which is no different to what systems integrators do today, the reseller or the system integrator today is about system integration. It’s now going to be about cloud integration. So it’s not going to die.
Geoff: Which is actually still systems integration. Professional services is still alive and well.
Tony: The reseller as the organisation supplying multiple cloud services to the end user who has an appetite for 30, 50,100 cloud services over the next ten years, has the ability, with very little skill, to be the purveyor of a much greater portion of the IT budget of that end user. That is because the distribution channel has the ability to be that services aggregator and the point of logical aggregation of multiple different types of services in the market.
Nick: If the distributor knows how to, but he already is the winner, because we break bulk on product, we break bulk on services, we break bulk on maintenance, we break bulk on licences, we break bulk on everything, right?
Roy: Break bulk on cloud, and you need guys that become cloud vendors, and the true cloud vendor is someone who’s providing just that service through the channel.
Simeon: I’m going to take a punt and say that Telstra will probably still be in this business in five years. We have invested $800 million recently and will do that over two or three years, in our cloud strategy, so we are very serious in this, and we are putting very serious money, probably unmatched anywhere else in Australia.
I hear about this idea of cloud services existing with multiple providers, and that may sound attractive to some, but it sounds a bit like a service nightmare waiting to happen to me. One of the service propositions that a telco like Telstra brings to the table and why we think we bring our strengths is by providing that integrated service model.