Prediction: IT Distributors Will Succeed As Cloud Aggregators

By samdizzy

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IT distributors have a lot to gain — and to lose — from cloud computing. Several sources tell me IT distributors expect roughly 10 percent of hardware sales — mostly on-premise small business servers — to dry up over the next few years. I firmly believe small businesses are buying fewer servers, and that trend will accelerate as more small businesses and startup companies simply deploy their IT infrastructure in the cloud.

Cloud Aggregator Services

How can IT distributors — which work closely with VARs and MSPs — respond to the situation? Ingram Micro offered the first major IT distributor response, promoting a cloud aggregator strategy throughout 2011. The effort is still a work in process but here’s the vision: VARs and MSPs can leverage Ingram Micro Cloud to source a range of cloud, SaaS and managed services. The Ingram Micro Cloud allows those channel partners to generate recurring monthly revenues while managing end-customer billing.

Ingram’s strategy leans heavily on Jamcracker, a survivor of the ASP (application service provider) market implosion more than a decade ago. Jamcracker has since repositioned itself as a cloud services brokerage enablement platform. Ingram embraced the vision and leverages Jamcracker for the Ingram Micro Cloud.

Emerging Options

Meanwhile, there are signs of progress over at Tech Data. During Q4 2011, Tech Data gave Talkin’ Cloud a behind-the-curtains look at TDCloud and the StreamOne Solutions Store. Yes, a growing number of ISVs (independent software vendors) are preparing to make their applications available through StreamOne. It’s safe to expect Tech Data to describe its progress sometime this quarter.

Over at Synnex, the CloudSolv effort has been somewhat quiet in recent weeks. However, the company recently announced its 98th consecutive quarter profitable quarter. And CEO Kevin Murai pointed to growing CloudSolv momentum, noted CRN.

Both Tech Data and Synnex have been careful to avoid the “cloud aggregator” term when describing their respective cloud platforms. But ultimately, Ingram, Tech Data and Synnex have similar goals: They want to empower VARs and MSPs to generate recurring cloud revenues using a single online portal. And I think channel partners will be inclined to give the cloud systems a look, since thousands of VARs and MSPs already have trusted relationships with distributors.

The bottom line: I’ve heard about hiccups, bugs and challenges with each of the IT distributor platforms. But the platforms are a work in progress. And IT distributors have no choice but to continue their cloud investments, because the cloud is real and gaining momentum.

Net Outcome?

Still, a huge question remains: Even if cloud services from Ingram Micro, Tech Data, Synnex and other distributors catch on, will distributors make enough money from the cloud efforts to offset a potential decline in small business hardware sales — particularly server sales?

It’s far too early for me to answer that riddle.