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Cloud opportunities for channel partners

Vinay Hirallal, Tarsus on Demand

Worldwide end-user spending on public cloud is forecast to grow 18.4% this year, and will reach $304.9 billion, up from $257.5 billion in 2020, according to Gartner. 

Worldwide end-user spending on public cloud is forecast to grow 18.4% this year, and will reach $304.9 billion, up from $257.5 billion in 2020, according to Gartner. Infrastructure-as-a-Service (Iaas) will be the fastest grower, with revenue expected to rise about 151% between 2018 and 2022 to $76.6 billion. Platform-as-a-Service Paas) revenue is expected to grow about 104% to $31.8 billion.

Software-as-a-Service(SaaS) revenue will reach $143.7 billion by 2022. Of particular interest to the channel is that cloud management and security services will grow by 70% by 2022 to $17.9 billion. How best to take advantage of this?

The Margin: How far is the South African channel transforming towards being cloud-centric? Are businesses still unsure about how to go about it?

Andrew Cruise, MD, Routed, a vendor-neutral provider of cloud infrastructure, says with distributors and the channel, in general, he’s seen reluctance, at least until last year, to invest in cloud, ‘without the certainty that it’s definitely coming.

But there’s now been an inflection point, from a supply-driven to a demand-driven market'.

“The distributors have been standoffish about going all in to the cloud, and rightly so. I don’t think it was ever certain that cloud would permeate the market as quickly as it has, particularly over the last year. There have been predictions that everyone’s going to be in the datacentre by 2022, by 2025, by 2030, and I think they’re all wrong.

Cloud has a place, and I think that on-premise has a place. What we’ve seen, particularly with distributors, is that they are now investing the capital in marketing operations and selling cloud. My favourite saying recently is one from Winston Churchill: ‘You can rely on the Americans to do the right thing, but only after they’ve exhausted all other possibilities.

Cloud has a place, and I think that on-premise has a place. What we’ve seen, particularly with distributors, is that they are now investing the capital in marketing operations and selling cloud. My favourite saying recently is one from Winston Churchill: ‘You can rely on the Americans to do the right thing, but only after they’ve exhausted all other possibilities.’

“If you start with this definition, then a lot of what we’re doing as a disti makes a lot more sense. Is a virtual machine a new invention in the cloud? The answer is no. There are several people here who have extensive datacentre offerings with that exact service. What has begun to expand is the concept of a hyperscaler, and public cloud is becoming more freely available. We’ve been advocating this since 2013.

“If you look at AWS and Microsoft, those public cloud providers offer immense Infrastructure-as-a-Service offerings. They compete with the local hosters, and the local hosters in certain circumstances are better than they are. Where public cloud providers begin to differentiate is in microservices. If you take a look today – and this is a stat from one of the large public cloud providers – less than 10% of workloads sit in public cloud. If we consider that workloads are growing at double digits each year, you can double the number of workloads in the public cloud and it wouldn’t even dent the number of workloads sitting in private clouds or on-prem.”

Lee Syse, senior cloud solutions architect, VMware, categorises cloud adoption as one with two endpoints: public cloud is traditionally driving use cases that customers need to take services to market, and the delivery of applications. He says application development needs to follow suit.

“Customers need some place to develop and modernise their applications in a quick framework, and a lot of the time, the private clouds they’ve built on-premise don’t have the capability to spin up those workloads or build applications in a modern way that a public cloud would provide.”

Lee Syse, VMware Lee Syse, VMware
He says private cloud use cases are still very relevant, and that with the traditional applications still out there, IDC predicts that 90% of them are not going to change in the next three years, and will still be used in five years. 

He says local enterprises are reporting a shortage of cloud skills in operating, building and managing new applications.

“There’s a massive lack of skills, and there’s a massive opportunity for channel partners to venture into the space of helping enterprises adopt, manage and maintain these platforms in public or private clouds. It changes the consumption and operating model, and I definitely think that’s an area to work on in our region.”

The Margin: Who is doing multicloud? You can have your email, or Office 365 in the cloud, but as far as production workloads go, I’ve heard that once you’re in one cloud, you’re not going to move around. Is that right?

Richard Vester, head of cloud, iOCO, disagrees, and says his company and a number of his customers are starting to use a multicloud model.

“If you look at the hosted cloud world where we’ve been playing for the last nine years, there are applications that run amazingly well in a hosted cloud space. Now customers are starting to understand their applications a little bit differently. If it’s cloud-native, then it makes sense to put it into the hyperscale world. We’ve got customers that are running part of the application in AWS, and part of their application on the hosted cloud platform, and we give them the view of being able to manage different worlds.”
 
He agrees with Syse that there’s plenty of opportunity for partners to support customers.

“The biggest opportunity is for channel partners to focus on their lane. If you try to do everything, it’s not going to be possible (to succeed). You see it from the breadth that AWS brings: 1 000 to 1 700 new enhancements every single year, and you’re never going to stay abreast of all the different capabilities. You need to be good in one area, and then look at how you can support other partners in the channel.”

He says some customers are modernising some of their older applications, and iOCO was lifting and shifting those into the hyperscalers for them.

“But they’re not doing that with some of the applications they can’t modernise, and so they’ll separate the two. It’s still logically one network."
 
Robin Fisher, head of Salesforce in the Middle East, Africa and Mediterranean regions, says the company’s business was ‘going like the clappers’ in the EMEA region.Organisations of all sizes are realising they have to pivot to a ‘cloud first approach’, and there is no stopping the cloud juggernaut. He says for every dollar it made in South Africa, $5 goes into the partner community, mostly around professional services. He projects this will be $7.50 by 2024.


Robin Fisher Robin Fisher
 

Vinay Hiralall, go-to-market strategist, Tarsus On Demand, says Covid has accelerated cloud adoption, but the type of adoption is driven by the particular customer segment. Those in the enterprise and mid-market are predominantly adopting multicloud, and professional services are being supplied by its partners.

In the SMB sector, meanwhile, there’s plenty of SaaS adoption.

He says remote working has seen increased adoption of productivity and collaboration tools, mainly from the Microsoft stack.“A lot more customers are demanding analytics, or understanding the behavioural science in their business. They’re finding cloud computing to be the access point to get those insights to run their businesses more efficiently.

He adds that the local economy is very competitive, and customers adopting the technology are looking to create operational efficiencies or a competitive advantage. 

“That’s why we’ve seen a lot of new Saas providers coming into the market.”

The Margin: What more can we do to push cloud transformation? Hiralall says he’s seeing the evolution of the ISV in the market, particularly in the last 12 months, which is driving cloud consumption and adoption. 

Andrew Cruise, Routed Andrew Cruise, Routed
He says an opportunity exists to bring the traditional channel and ISV together so that they can collaborate with a customer on Saas solutions.

“When you talk about the enterprise and a multicloud approach, yes, there is risk in it, but what I’m hearing from the market is that there’s also a risk in not having a multicloud approach.”

Robert Marston, global head of product, Seacom, says it has an Iaas offering that is predominantly sold through the channel, simply because the channel has the required skills, and is also investing in training. “Cloud is a big buzzword, but it’s also rapidly changing into a reality as we see the hyperscalers set up shop and more requirements from customers to go the cloud route. Channel partners have the customer’s ear, and they’re investing in managed skills services, so they can take the end-customer into the cloud environment they want to get into.
 

“Cloud is a very encompassing term at this point in time. It could mean Saas, or Infrastructure-as-a-Service, or on-prem cloud. There are so many different areas of cloud at the moment.”

He repeats the point that it makes the most sense for a channel partner to specialise in one component or area, rather than trying to cater to everyone. “Find something that you’re good at, and that your customers are demanding, and scale up on the basis of that, and then start to see what else you can do on the back of that.”

The Margin: What do customers want?“ I think there’s a massive shortage of IT skills in general,” says Marston.

“If you’re managing onsite infrastructure, you’re going to have a worse skills shortage now because not only are you having to manage the application, but you’re having to manage the hardware and uptime, and datacentre infrastructure. Customers will avoid the high costs of having to employ skilled IT people, and by moving into the cloud, they get rid of the risk of not being able to find people.

“The cloud, in the case of Africa, makes a lot of sense. With all the overheads associated with IT, by moving into the cloud environment, you can de-risk yourself, and start to focus on the application and what the end-users of the service are requiring.

Sharp says there’s a very big difference between a company with an existing workload, and one starting from scratch.
 
Jason Sharp, First Distribution Jason Sharp, First Distribution
“For people starting with a newer workload, it’s easy to find a microservice from one of the hyperscalers, or get the infrastructure from one of the private cloud providers. It’s more cost-effective and it’s an operational expense from the start and you don’t need the capital. It’s very different when you have an existing workload that you want to migrate and there’s a lot more involved in that move. Cloud adoption, where there are existing workloads that need to move, is a lot slower because it requires change management, versus firms that are creating businesses internally, or have new workloads or technology.”

He says there are challenges for businesses and the partner community around transacting cloud. Distributors have an important role to play in this respect, and how, for example, they assist partners in understanding the billing model.

Reiterating the comments of Syse, he says: “We need the channel to provide solutions to the market. If you provide a solution, it’s an easier sell into the SMB market, rather than trying to sell them the different components. 

All of these elements are so important to successful partners, and the success for end-customers in adopting cloud.”

The Margin: Does anyone have a case study they’d like to share?Vester says he has a good example with an app known as Candy, which is used by a company called CCS Property Management. 

The app was written in .net, which iOCO modernised, and moved to a virtual desktop on AWS, allowing it to be consumed as a service globally. 

“In the past, it was a bit of a clunky application, and was sitting on their own server infrastructure, which was dying and wasn’t able to support their growth of customers.

“There was some application modernisation that we needed to do, and now that it’s sitting in a hyperscaler, it’s booming. There are number of migrations we’ve done for customers, and the migration is not as simple as people think,” he says, adding that landing zones need to be built, and security taken care of, for example.

The Margin: What would you suggest partners do? Do they need to get certified in as many clouds as possible? Vester says he laughs when he sees people on LinkedIn saying they’ve got 12 different badges. 
 
Robert Marston, Seacom Robert Marston, Seacom
“I think it’s a load of hogwash. People have become exceptionally good at certifying themselves, but can they actually do it technically? Can they go into the platform, and actually deliver the services that they’re certified to do? I did my AWS certification, and it took me three days to study for it, and I did my Cloud Practitioner (certification). 

I understood the foundations and fundamentals of AWS, but even if I went and did my Solution Architect (certification), it doesn’t mean that I can deliver everything in the cloud. You need to actually work on the platform to become skilled and experienced.” 

He says Cloud Guru is a fantastic training platform, ‘but don’t just rush out and see how many certs you can advertise. Become good at something, and get in there and do the technical and practical stuff, as opposed to just certifying yourself.”
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