Hyperscale is here

With the big vendors dead set on removing obstacles to obstruction, how is the channel adapting to selling hyperscale cloud?

Elaine Wang, Rectron Elaine Wang, Rectron
With the big vendors dead set on removing obstacles to obstruction, how is the channel adapting to selling hyperscale cloud?

We know why people have put off cloud infrastructure adoption in the past. The reasons to refrain include latency, reliability, data governance and sovereignty. But with the launch of domestic datacentres for Microsoft Azure and Huawei, and Amazon’s announcement that it will follow suite early next year, most of these objections no longer apply. What does remain a challenge, however, is getting hyperscale cloud to market.

With this in mind, The Margin put together a roundtable of industry experts to discuss the blocks and opportunities for partners in the ecosystems of the future. What does hyperscale mean to the channel in South Africa?

Asif Ali, Microsoft Asif Ali, Microsoft
“The first thing partners want to know is if they will be getting a better price now that datacentres are hosted locally,” said Traci Maynard, Microsoft executive at Axiz. “It’s an interesting question and conversation about who needs to play what role. And it depends on what they want, as not all services are available locally.”

“There’s a lot of excitement about the local datacentres,” said cloud and software solutions director at Rectron, Elaine Wang. “The Microsoft announcement marks the start of the real public cloud journey in South Africa. Pricing is always going to be a challenge, but it depends on the partners. There are partners who don’t know what they’re doing so they will always sell on price. But then we have the really amazing partners who do understand that the cost of the service is only part of what they offer.”

Andrew Cruise Andrew Cruise
“The excitement is definitely there in the partner community,” agreed Microsoft’s national technology officer Asif Ali. “This opens new realms of opportunity for partners to get a bigger part of a customer’s business that they didn’t have before. If they didn’t traditionally have the hardware business, for example, now they can offer (software) all in one. The potential to increase the bottom line is a lot greater. There will always be demand for price, but contrary to belief, there is a premium to provide services locally. If you look at the scale we have in Europe, we don’t have  that here.”

Connectivity, too, is more cost-effective elsewhere, Ali added, but partners have to look at the total benefit to see the real advantages.

Working on the pitch Andrew Cruise, CEO of local cloud provider Routed, said there’s an element of overhype in the arrival of multinationals’ datacentres, but the news is opening up conversations.

“IT is still just dipping its toes in the water; there’s still not much happening,” Cruise said. “Some people have been waiting for Azure and AWS, but they’re relatively small. Enterprise IT is still very conservative overall.”

Robert Marston, global head of product at Seacom, said that most of the organisations that had increased their level of interest in hyperscale cloud were the ones that had already begun adopting similar services. They were interested in details around local SLAs and availability.

“The cloud journey is still mystical to many,” Marston said. “That’s one of the big gaps for the channel here and in places like Kenya. How is that journey enabled? How do you migrate workloads and data?”

Sven Blom, Teraco Sven Blom, Teraco
Sven Blom, the head of sales at Teraco, agreed that many service providers are still struggling with concepts around cloud and, as a result, are focussing on commercialising services and licence sales, which won’t result in the margins they need. We need more case studies, he said, to help integrators understand the opportunities that exist.

Nevertheless, Blom said he’s seen dramatic growth in public and hybrid cloud deployments within Teraco’s network.

“We’re now at 13 500 cross-connects within the datacentre,” he said, “and that will continue to grow.”

Microsoft’s Ali added that while part of the business case for regional hyperscale datacentres is to address customers such as government or banks, which need data sovereignty and low latency processing, integrators  shouldn’t see `lift and shift’ for existing applications as the main opportunity.

“You have to look at optimising models and where partners can play the biggest role,” he said. “The value proposition for partners is around innovation, infrastructure as a service and making sure customers get the full benefi ts.”

Traci Maynard, Axis  Traci Maynard, Axis
All businesses are under pressure to innovate, said Ian Jansen van Rensburg, lead technologist for VMware in SubSaharan Africa.

“Even farmers, who will need to produce a lot more food from a little less land in the future,” he said. “Cloud is the main way to assist all these companies. It’s the new hardware: customers aren’t thinking about hardware anymore, they’re in a software defi ned world. They want to be able to spin workloads up and down easily.”

Linda Morris, director at Smart Technology Centre, said that her customers were in tune with this. “Convergence of infrastructure is becoming a big talking point, and traditional IT is becoming archaic,” Morris said. “They want to be able to download a business, not just spin up a server.”

Who makes hyperscale work? Inevitably, the conversation turned to skills, and particularly current and expected shortages. Microsoft’s Ali referenced an IDC report released last year (commissioned by Microsoft) that suggests cloud revenues will double by 2022, resulting in the creation of around 122 000 new jobs in the field.

Mikey Molfessis, Mimecast Mikey Molfessis, Mimecast
“We need to create these skills,” he said. “Without those skills, you can't have adoption,” echoed Seacom’s Marston. The challenge is compounded, he added, because while hyperscale vendors might invest in training for their particular platforms, end-customers also need advice on how to diff erentiate between Azure, AWS or a local provider. Are resellers developing those cross-functional skills so that they can deliver best value to their customers?

Axiz’ Maynard said that while distributors were putting eff ort into building in-house teams to help with sales, partners couldn’t become complacent.

linda Morris , Smart Technology Centre linda Morris , Smart Technology Centre
There’s just not a lot of margin, and you can’t expect the distributors to skill up and still make 15%,” she said. “As much as we are investing, there’s a point where we have to hand over to the partner; we can’t do the implementation for you. Do we represent many vendors? Sure. Will we fulfi l sales training and technical training? We absolutely will. But there’s an obligation on behalf of the partner to understand that.”

“What we try to recommend is that in the absence of a specifi c skillset within a partner, that the partner should partner,” added Rectron’s Wang, who also agreed that there’s too much expectation on distributors at the moment, and that some service providers are still struggling to define their business model. “We will happily put partners in touch with each other.”

Ian Van Rensburg, Vmware Ian Van Rensburg, Vmware
Smart Technology’s Morris agreed, and said that it was vital for her to invest in skills and own her own customers. “Part of the success has to be getting the engagement right.”

It’s an ongoing challenge, said Mimecast’s Mikey Molfessis, cyber security expert, but harder still for customers.

Robert Marston, Seacom Robert Marston, Seacom
“We have a lot of training materials online,” Molfessis said, “but often, there’s just a single resource looking after, say, Sharepoint within an organisation. It’s very hard for them to stay on top of new developments (outside their field). It’s also a question of where are we targeting information. Often it’s at the C-suite level, which can’t take it back to their engineers.”

That’s not always a bad thing, added Routed’s Andrew Cruise. “What's being ignored is the self-interest of people providing advice and infl uence to the board.”

When it comes to issues of outsourcing IT to the cloud, `there's a lot of worry about what it will do to their jobs’, Crusie said.

Board sponsorship is also vital if a hyperscale project is going to succeed. Smart Technology Centre’s Morris pointed out that high level conversations are vital for change management and digital transformation.

“We have to humanise the cloud conversation,” she said, “It can’t get lost in translation.”

That also extends to the dynamic between the channel and end customers, which could ultimately be where the real value lies.

“People buy from people,” said VMware’s Van Rensburg. “They have relationships with people. The WEF says the Fourth Industrial Revolution is the integration of physical, digital and human domains. The only one that is constant is the human.”

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