Channel Cloud Challenges Abound: Pax8, Dell, VMware, Rackspace Talk
Partners face some unique issues when provisioning cloud — and clients are changing, too.
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One of partners’ biggest challenges in cloud lies in going beyond sales and marketing. Now they’re looking to vendors to help them differentiate themselves from peers. They’re telling their providers, “‘find us a little more profitability,’” said Pax8’s Ryan Walsh.
That’s a fair request, but partners themselves have to do some footwork while vendors do their part.
VMware is encountering that same issue. The infrastructure-turned-software company has a large base of managed service providers that are transitioning to cloud, far beyond selling connectivity. That shift, said John Turner, “has been an interesting challenge and [partners] are turning to us.”
Along the lines of Walsh’s observation, Turner, too, is hearing partners ask for help, especially in terms of deeper insights.
“They’re looking at transactability, data-driven [things],” he said. “The big thing for us today is to work with them to expose that data to them.”
When that happens, partners can understand customer trends and changes in usage. Plus, turning partners into “data-driven decision makers,” as Turner put it, will help the channel move to the next level of its own growth. As much as partners read about and discuss data and analytics, it’s time for them to implement these practices in their own businesses. We say this knowing it’s not easy — not even for vendors.
“Quite frankly, it’s been a challenge even inside of VMware,” Turner said.
As organizations have started to understand just how much cloud computing really costs, they’ve started asking if they should bring resources back in-house. The conversation is heating up now that those three-year COVID-era contracts are coming due.
“Repatriation is becoming … prevalent, from what we see,” said Rackspace’s Adrianna Bustamante.
For partners, the challenge lies in helping customers determine the right cloud approach that will serve them for years to come — future-proofing their technology environments, if you will. As such, partners are asking their vendors, including VMware, about the use cases around hybrid cloud.
Pax8’s Walsh agreed that partners are questioning how their customers consume cloud. Because of that, the cloud conversation, he said, is changing from “product to outcomes.”
In many ways, that indicates greater maturity among cloud-centric partners. After all, technology for the sake of technology does little good. But technology that meets needs and propels a business’s goals — that’s the holy grail right there, and the inherent value proposition of the channel overall.
Rackspace’s Bustamante concurred.
“Everyone’s looking for business results and solving business challenges,” she said.
Oddly enough, it seems legacy channel partners continue to struggle with the idea of the consultative sale. This conversation is a big one at VMware, despite the industry discussion around it for years.
“We see that growth in the master agent community,” Turner said. “We’re training them to have that consultative conversation versus a product conversation.”
VMware sees benefit in investing in that ongoing discussion. As the company expands its reach, it needs to have buy-in from technology services distributors (formerly known as master agents).
“They have way more contacts than we do,” especially on the SMB side, Turner said.
Coming up, roundtable participants talk about one of the biggest challenges in the cloud sector: artificial intelligence.
But first, a little more background and context.
Ever since Microsoft took ChatGPT to the masses, generative AI has been all the rage.
Microsoft beat competitors to the perhaps-inevitable AI punch. Not long after ChatGPT took off, Google followed with Bard. A couple months later, Amazon debuted Bedrock. (Each of the services runs on the respective companies’ cloud computing platforms.) In the ensuing months, industry chatter around generative AI has been, well, relentless.
To be sure, the topic arose at the 2023 Channel Partners Conference & Expo, including at the cloud roundtable, and it has dominated other events, too. Most recently, the CEO of channel analyst firm Canalys told Dell Technologies World attendees to get on board with generative AI … or else.
“If you set your plans in November, December of last year, and you are still running to those plans today, you’ve made a mistake,” Steve Brazier said. “You need to reset those plans because the world has changed. Generative AI is changing the world. If you don’t get on that journey today and tomorrow, you will be left behind by the partners whose leaders are more inspired and move faster.”
So many questions abound around the topic of generative AI, a technology powered by cloud computing. As one example of the uncertainties, the tech discussion itself “parlays into a people discussion,” said Dell’s Michael Piccininni.
“It’s about the future IT worker and the role of the organization. … Certain functions are going to be marginalized or obsolete.”
On the flip side, said Rackspace’s Bustamante, “if we can collectively drive tools and systems that help us accelerate solutions and get to answers faster, that’s good for everybody.”
In the near term, the promise of generative AI largely appears to surround helping channel partners uncover a client’s propensity to buy.
“AI has the ability to do way more data analysis” than any person can, said VMware’s Turner. “The amount of data that we all have is growing exponentially. … It’s impossible for for us to evaluate all those pieces of data.”
The power of AI in the immediate future — one where partners can benefit right way — lies in creating correlations and extracting trends, he said.
For more insight (and some concern), go to the last slide.
Michael Dell isn’t the only technology leader expressing optimism — and caution — around generative AI.
In terms of how the channel sector might lean into the service, VMware’s Turner expects larger organizations to move somewhat slowly because of the risks they must manage around privacy, security and regulatory compliance.
Smaller organizations, on the other hand, likely will be more willing to experiment and see which generative AI serves them best, he said. That includes the channel. Either way, partners shouldn’t perceive generative AI as heralding the end of livelihoods, Turner noted.
“Nobody jumped on spellcheckers as destroying English majors,” he said. “At some point, we’re going to accept it as an assistive tool.”
Channel partners should look at generative AI as a resource, he advised.
For example, think about checking a customer’s service configurations (insert your preferred service here — perhaps it has to do with cybersecurity or a new cloud computing platform). Being able to have AI check those settings would go a long way toward eliminating human error. That would translate into much smoother sailing for both the client and the partner. At some point, Turner would like to see VMware deliver such a generative AI capability as partners provision the company’s services.
Perhaps Rackspace’s Bustamante summed up the matter best. Generative AI, she said, “brings you a competitive edge and helps you move faster.”
Michael Dell isn’t the only technology leader expressing optimism — and caution — around generative AI.
In terms of how the channel sector might lean into the service, VMware’s Turner expects larger organizations to move somewhat slowly because of the risks they must manage around privacy, security and regulatory compliance.
Smaller organizations, on the other hand, likely will be more willing to experiment and see which generative AI serves them best, he said. That includes the channel. Either way, partners shouldn’t perceive generative AI as heralding the end of livelihoods, Turner noted.
“Nobody jumped on spellcheckers as destroying English majors,” he said. “At some point, we’re going to accept it as an assistive tool.”
Channel partners should look at generative AI as a resource, he advised.
For example, think about checking a customer’s service configurations (insert your preferred service here — perhaps it has to do with cybersecurity or a new cloud computing platform). Being able to have AI check those settings would go a long way toward eliminating human error. That would translate into much smoother sailing for both the client and the partner. At some point, Turner would like to see VMware deliver such a generative AI capability as partners provision the company’s services.
Perhaps Rackspace’s Bustamante summed up the matter best. Generative AI, she said, “brings you a competitive edge and helps you move faster.”
Channel partners face cloud challenges aplenty. And those issues don’t just come in the form of deciding which services to offer and support, or which platforms to recommend to customers. Rather, those cloud challenges often run a lot deeper.
First, there’s the question of profitability. In an era where every business is assessing its financial standing and determining where best to make changes, channel partners are anything but immune. One of the cloud challenges they’re up against? Teaming with vendors that help them attain profitability.
Another common problem crops up when a channel partner isn’t using internally generated data to better position his or her business. This represents another area where providers can step in, but many have yet to rise to this particular cloud challenge.
From there, channel partners’ clients are asking whether they should even use public cloud computing anymore. After three years of unexpectedly high cloud costs, many end users are looking at repatriation. That’s one of many major cloud challenges for any partner with customers on Amazon Web Services, Microsoft Azure, Google Cloud and other platforms.
Then, of course, there’s the big kahuna dominating practically every discussion right now: generative AI. Channel partners have a significant cloud challenge on their hands with this technology, figuring out how to use it to improve operations and customer service, and even make money.
Pax8’s Ryan Walsh
VMware’s John Turner
Rackspace’s Adrianna Bustamante
Dell’s Michael Piccininni
The participants on the 2023 Channel Partners Cloud Roundtable tackled these cloud challenges, and more. Channel Partners held this invite-only, closed-door discussion for the third time at the recent expo in Las Vegas. Four vendors joined the panel: Ryan Walsh, co-founder of Pax8; John Turner, director of customer marketing at VMware; Adrianna Bustamante, vice president of global alliances and channels at Rackspace; and Michael Piccininni, director of global alliances, Americas cloud, data center and telco service providers at Dell.
If you missed the first 2023 Cloud Roundtable installment, which looks at cloud trends impacting the channel, click here.
See the slideshow above for the many cloud challenges facing partners and vendors today.
Want to contact the author directly about this story? Have ideas for a follow-up article? Email Kelly Teal or connect with her on LinkedIn. |
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