Distributors Still Sorting Out Cloud Channel Strategies

By samdizzy

During a financial analyst meeting on Wall Street yesterday, Avnet expressed high hopes for technology sales in 2011. Rival distributors like Arrow Electronics, Ingram Micro, Tech Data, Synnex and Westcon Group sound equally upbeat. No doubt, distributor revenues are rising as corporations refresh aging desktops, servers and network infrastructure. But here’s the big question: How will distributors strive to remain relevant as some companies embrace SaaS and cloud solutions? TalkinCloud went looking for answers. Here’s what we learned.

When it comes to cloud computing, distributor strategies vary greatly. Generally speaking, Ingram Micro appears to be making the most aggressive cloud computing moves. But many of Ingram’s rivals have cloud-related pilot programs and development efforts under way. Here’s a sampling of who’s doing what:

Ingram Micro

When Ingram Micro hired Renee Bergeron in September 2010 it signaled a symbolic shift in the company’s partner strategy. Bergeron succeeded Justin Crotty, who had resigned to join NetEnrich. But here’s the twist: Crotty had been VP of services, Ingram Micro North America. In stark contrast, Bergeron was named VP of managed services and cloud computing.

Poke around and you’ll see the Ingram Micro Seismic business has had multiple SaaS and cloud relationships in place for multiple years. But when Bergeron arrived with cloud in her title, the move put rivals and partners on notice: Ingram was getting very serious about the cloud.

How serious? Bergeron surfaced at the Rackspace Partner Leadership Summit in October 2010, where more than 100 VARs gathered to learn about Rackspace’s channel cloud strategy. By November 2010, Ingram had launched the Ingram Micro Cloud — an educational portal and app center to help VARs and MSPs learn about cloud opportunities and even source applications. Bergeron explains the strategy in the TalkinCloud FastChat Video.

It all sounds very promising but Ingram Micro Cloud remains a work in progress. While Ingram Micro Seismic has helped to transform more than 1,000 VARs into MSPs, it’s unclear how many Ingram partners will leverage the cloud portal — especially when partners can source the applications directly from the SaaS providers.

Still, it sounds like the Ingram Micro managed services and cloud strategies are backed by board-level commitments. And Ingram has been busy lining up relationships with Rackspace, Salesforce.com, Amazon.com and other cloud heavyweights.

Avnet

During an Avnet financial analyst meeting yesterday in New York, Avnet Technology Solutions President Phil Gallagher said future growth will likely come from cloud opportunities as they emerge, which he pointed out will not occur overnight.

“As exciting as the cloud is for us — and it is — we realize that not everything is moving onto the cloud tomorrow. And we’re ready regardless,” he said. “We think the bigger opportunity short-term is the private cloud, and we see how the cloud could change culturally the way our partners go to market. We can help them [adapt] to that change, and we are working closely with our suppliers that.”

Avnet Technology Solutions VP Tim FitzGerald shares a similar view. In this TalkinCloud FastChat Video, FitzGerald points to virtualization as a natural stepping stone to private cloud opportunities. To drive home that point, Avnet has launched CloudReady, which strives to educate partners about stepping stones to the cloud.

Still, it sounds like Avnet’s cloud efforts are in their infancy. Avnet Technology Solutions has tight relationships with Cisco Systems, Hewlett-Packard, IBM, and Oracle-Sun (among others). You can bet Avnet will be developing private cloud initiatives with each of those partners.

Tech Data

At first glance, Tech Data is downplaying the cloud and instead focusing heavily on endpoint devices. Smart phones,  tablets, flat-screen TVs, digital signage … if it’s an endpoint or consumer device, Tech Data wants to supply it to channel partners.

During multiple interviews in 2010, Tech Data CEO Robert Dutkowsky told The VAR Guy (TalkinCloud’s sister site) that the distributor was betting on the consumerization of IT. We asked if Tech Data could really generate profits from low-cost, consumer-inspired devices. His answer: Absolutely yes, and the sales volumes are set to skyrocket.

That may be true. But poke around and you’ll learn that Tech Data is quietly testing multiple cloud efforts. In August 2010, Tech Data Canada named Paul Wilkinson as director, Advanced Infrastructure Solutions Division (AIS). The move is part of Tech Data Canada’s cloud effort.

Meanwhile, Tech Data Belgium is launching SaaS and cloud application offerings for VARs and resellers. The effort involves a close working relationship with Parallels, which develops automation software to help companies stand up cloud and SaaS applications. Joshua Beil, director of market strategy and research for cloud and service provider business at Parallels, describes the Tech Data Belgium relationship in a TalkinCloud FastChat Video.

Arrow Electronics

Check in with Arrow, and you’ll hear about Arrow Fusion Cloud Services, which includes remote monitoring software, SaaS (such as hosted email and security as as service), Infrastructure as a Service (IaaS), and business continuity/disaster recovery services. More recently, Arrow added Enterprise Content Management to the Fusion Cloud Services mix.

Generally speaking, the Arrow strategy sounds a bit like Ingram Micro Seismic — but we’ve got to do a bit more homework. We’ve reached out to Arrow requesting a deeper dive on the cloud strategy, and we’ll report back within the next few days.

Synnex

The Synnex cloud and managed services strategy has been surrounded by rumors in recent weeks. Apparently, the company is negotiating a partnership with an RMM (remote monitoring and management) software provider. The deal will potentially involve 1 million freemium managed services nodes.

The MSP software strategy appears tied to Synnex’s broader cloud and SaaS strategy. Synnex launched its SaaS portal in October 2009, according to BusinessWire. The solutions catalog offers more than 20 hosted solutions, ranging from email encryption and project management software to e-Learning and social networking technologies, the news wire says.

Next up, sources say Synnex will announce the MSP software relationship before the end of 2010. But we’ve been hearing that rumor for weeks… and we’ll keep chasing it until we have all the facts at hand.

Westcon Group

Meanwhile, Westcon Group in October launched a “LEAP” effort that’s focused on virtualization and cloud infrastructure solutions, complete with VAR training.

As part of the effort, Westcon Group has launched US-based “Centers of Excellence” which are designed for VARs to get “hands-on” training for the solutions targeted solutions, especially upcoming virtualized data centers.

More Than Virtualization?

Westcon’s move sounds a bit like Avnet’s cloud strategy so far: Focus on virtualization and private clouds, the distributors say, and you’ll be well-positioned for additional cloud opportunities as they emerge.

Is that truly the case? Too soon to say. As you can see from the profiles above, distributor cloud strategies vary from company to company. We’ll keep our eyes on all of the players to see how their strategies shake out in 2011.

Additional reporting by Charlene O’Hanlon. Follow Talkin’ Cloud via RSS, Facebook and Twitter. Sign up for Talkin’ Cloud’s Weekly Newsletter, Webcasts and Resource Center. Read our editorial disclosures here.