On one hand, the cloud would seem to be a natural disintermediator of distribution if not the channel. On the other, distributors have proven, if nothing else, they are an adaptable lot.
Avnet, for example, was among the leaders of the charge for the move towards value distribution over the last decade, and now has staked a claim beyond that, moving to what it calls solutions distribution – building deep technology and vertical practices on which its partners can piggyback their own efforts.
So how does it see the cloud in its future? ChannelBuzz.ca sat down with some of the distributor’s top executives at the company’s IBM Partner Summit last week in San Antonio, and came up with a surprisingly simple and un-cloudy answer.
In short, the cloud is an extension, and a natural one at that, of Avnet’s existing play in the data centre, suggested Tony Vottima, senior vice president of solutions marketing and development for the Americas at ATS.
“Our role is to clear up the cloudiness around cloud,” Vottima quipped.
The mission comes at a good time for the distributor. Vottima said that cloud-based vendors are now going through the same evolution many “traditional” IT vendors have gone through over the last two decades and are realizing that in order to build scale in the massive and lucrative midmarket opportunity, they need to turn the channel.
“As they’ve matured, their view of what the channel does is very different than it was a year ago,” Vottima said of the cloud vendor community. “And building that channel is what we really do well. We have a natural place in the middle, just like we do today in the infrastructure business.”
It’s in the midmarket where Jeff Bawol, president of the Americas for ATS, sees the biggest opportunity for Avnet and its partner base, particularly as Avnet integrates cloud messaging and capabilities into its solutions focuses. While the cloud may seem new at first glance, a deeper look reveals it’s not all that different from other market transitions the distributor and its channel partners have been through over the last two-plus decades. It all comes back to that old channel gem – where there’s mystery, there’s margin.
“I’ve been in distribution 28 years, and any time there’s an inflection point – and the cloud is an inflection point – and there’s complexity, we add value,” Bawol said.
Does Avnet see itself building out its own cloud services? Doubtful, said Vottima. The distributor will eye where there are holes and gaps, and has been in the managed hosting business for a while, but ultimately, Vottima sees the company doing what it does best.
“Our best role is building channels to the market for suppliers and enabling those partners,” he said. “Building our own isn’t typically what we do.”
Bawol agreed, saying Avnet’s role as “the enabler, the educator and the aggregator” – the connection between solution providers, cloud vendors and their mutual customers.
In terms of the cloud opportunity today, Bawol speaks in thirds – about a third are “mentally there” with the cloud move, about a third “know they need to be there and are dabbling,” and the third group Bawol described as ‘stuck.”
“That’s where our education and enablement pieces need to go, to keep those people moving in the direction that behooves them,” he said. But he was clear – more and more solution providers are “getting into the game and understanding it” as 2010 begins to wind down.
Brian Aebig, vice president and general manager for Canada, reported a similar split in the Canadian partner base, and noted that “awareness spiked early” in the cloud, and with that awareness came some fear, uncertainty and doubt.
“There’s still room for concern, but now more people are discussing their role inside the cloud and how that can be a positive change for them,” Aebig said. “We see a lot of partners accelerating their own education.”
Vottima reported a similar split in the partner base across the Americas, but noted that fear is being replaced by curiosity when resellers approach him about the cloud. Ultimately, he suggested, it’s just a matter of the kind of mindset a solution provider takes.
“Once they understand the cloud is part of the data centre, it makes it much more consumable for them,” he said. “Rather than being an either/or situation, they understand it’s a delivery vehicle. It takes a whole lot of the scariness and mystery away.”
Aebig cited the distributor’s CloudReady initiative, rolled out in May of this year, with helping to bring “clarity and definition to the role of the cloud in the IT supply chain.”