Packaging Your IP for Differentiation, Part 1: The cloud's disruption to the partner business model

Cloud computing brings immense benefits to customers by shifting the burden and risk of building, operating and owning the data center to cloud services providers and effectively turning IT into a pay-per-use utility. However, when IT becomes a utility, technology reselling partners are financially impacted by an ever improving self-service model, subscription pricing and the need to differentiate when their competitors are effectively offering the same utility. In this seven part series we look at how partners can package their own intellectual property (IP) assets to effectively differentiate and regain revenue lost to the cloud model:

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About Paul Solski

Paul Solski (paulsolski@aimcorpinternational.com) is the Managing Director of AIM International, a management consulting firm specializing in assisting software companies to enter and grow in new markets. Mr. Solski has over 25 years' experience in international business development having held executive positions at Microsoft, HP, Intel, and Compaq.

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Cloud raises the bar for service providers

This is an interesting perspective we having been hearing a lot about in the partner community some time. Undoubtedly the classic VAR business model is under extreme stress and needs to evolve. Volume licensing cloud-based IP with self-service provisioning is certainly one viable path forward for partners, but I doubt many have what it takes to transform into true SaaS providers. The real opportunity for VARs - and what most customers really want I think - is to step up their offering around adoption and value realization. As an industry we typically pushed adoption and value realization into the "customer responsible zone". It's messy business because it requires us as consultants to step into all of the customer's messiness and complexity, and in doing so accept uncomfortable risks. Historically the Microsoft partner channel, and many other vendor channels, existed for the sole purpose of transferring capability in the form of enterprise software, into a customers hands through the implementation process. What the customer has always wanted however is an OUTCOME - not in the form of a deployed software solution, but a measurable change in their business. For channel partners who are bold enough, the Cloud offers an opportunity to enthusiastically dive in with customers to optimize the outcomes they receive from the product. Cloud customers don't want to license software assets or manage complexity, they want to pay for an Outcome-as-a-Service.

Elliot Fishman
CEO
Catapult

Outcomes

Thank you Elliot.
Absolutely, partners moving up the value chain to provide customers with services that optimize their business processes and have IT achieve better outcomes is the other opportunity for partners to prosper in the IT as a utility world. But good consulting services should be based on sound and proven methodologies and these can be partners' IP. Parts 3 & 4 of this series cover this topic.
- Paul.

minivan