Channel needs to explain cloud better

Nearly half of global resellers said they are preparing to sell cloud services this year in a market set to be worth $160bn by 2020, although those in Europe tend to lag in adoption versus their counterparts in the US and Japan, according to the latest CONTEXT ChannelWatch Survey.

The study profiles the views, activities and intentions of a representative sample of 8,500 resellers operating across Europe and beyond, in US, Russia, Turkey, Australia, New Zealand, Dubai, Japan, India and Brazil.

Over 10% of resellers said that either Software as a Service (SaaS) or Infrastructure as a Service (IaaS) was one of their top three growth areas, with SaaS seen as the lowest hanging fruit as it’s easiest to implement. The most popular types of cloud services sold were similar to last year’s report, with back-up (53%), storage (47%) and business apps (35%) topping the list.

However, there was a significant increase in those selling general infrastructure services, reflecting the fact that 14% rated IaaS as a major growth category, just 2% behind SaaS. Large datacentre investments from Microsoft and Google have helped spur competition with Amazon Web Services, lowering prices and improving choice for buyers, the report found. However, the biggest barrier for resellers interested in cloud computing services was demand not justifying the investment (35%), followed by security concerns (19%) and complexity (14%).

“As demand increases, so will the need for distributors and vendors to train their reseller partners. Hardware as a Service (49%) and SaaS (40%) were the two areas where resellers felt coaching would be most valuable”, said Adam Simon, Global Managing Director at CONTEXT.

Vendor-branded services hosted by the vendor (54%) and vendor-branded services hosted by the distributor (30%) were the preferred choice for resellers, reflecting concerns over security, reliability and having a trusted brand to sell. The report also urges vendors and distributors to monitor emerging category products and consider how to accelerate growth. CONTEXT tracking shows a healthy medium-term (2-3 year) growth outlook for Smart Home, PC Gaming, and Virtual Reality (VR) offerings.

“Specialist retailers and distributors are best placed to capitalise on growth in these segments as they are able to demonstrate products to customers most effectively”, added Simon.

However, overall it was the category of Solid State Drives (SSD) that topped the list for biggest percentage growth in 2017. Almost a third (31%) of respondents claimed it was the best-selling category, driven in part by its role as a key enabling technology for modern cloud-ready datacentres.