Channel Partners

SPR 2015

For 25 years, Channel Partners has been a resource for indirect sales channels, such as agents, VARs and dealers, that provide network-based communications and computing services, associated CPE and applications, and managed and professional services

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8 CHANNEL PARTNERS SPRING 2015 FEATURE That's because so much of what happens in IT has been reduced to practice and frankly doesn't make for interesting reading. When hard drive capacities go from 4TB per drive to 8TB per drive, it's cool, but that coolness is summed up in about a single sentence. As change-driven as technology is, most of it isn't innovative. EMC builds bigger Symmetrix systems, Cisco ups the ante on routers, Intel packs a few more cores onto a chip — it's all incredibly important, but also totally predictable. Now when, for example, Oracle founder Larry Ellison year after year softens in his rhetoric on the cloud from complete dismissal a few years ago to now laying claim to "by far the largest" SaaS portfolio, that gets people's attention. Ellison's mind is not easily changed about… anything. Although it's not likely that Ellison would admit a mistake in what he once said about the cloud, his newfound love for it is truly news and signals a sea change in expected buying habits. There are likely those who would argue with the "by far the largest" claim, and in fact Ellison may be over-positioning, at least for now. According to Oracle's most recent quarterly 10-Q statement to the SEC, new software licenses, upgrades and support brought in $6.8 billion in the three months ending November 30, 2014. During that same period, cloud revenue was just $511 million. At 7.5 percent of total software revenue, Oracle is about where one would expect it to be for cloud revenue. It's Cloud's Double-Digit Growth That doesn't mean Ellison is wrong or that cloud isn't important for Oracle, but he missed the headline in his search for an Ellisonesque superlative. What's really important is that Oracle's cloud revenue grew 43 percent year over year, while its software licensing business grew by just 3 percent. Indeed, while its cloud revenue increased by $155 million, its new software licensing revenue fell by $76 million.This is not uncommon in the industry for incumbent software houses. The bottom line is that the cloud in any format does not yet dominate IT spending, but the trajec- tory is clear. Further, it's important to realize for a company like Oracle, well over two-thirds of its software-related revenue comes from upgrades and support, not from new sales. The way cloud matters is the way that disruptive forces always matter to the IT market: It's where the innovation happens. Take the corollary for programmers. Fifteen years ago, you wanted to know C++, Visual Basic and Visual C; now it's HTML, Java, Ruby, and dozens of other Web-specific languages, because that's where the bulk of the innovation is. OK, developing a practice around the cloud might not make you rich right now, but just like Larry Ellison's (and IBM's and Microsoft's and Cisco's and AT&T's and Verizon's and every other company that wasn't born of the cloud), it's an investment in where the money is going. Wayne Gretzky's now cliché quote about skating where the puck is going rather than where it's been comes to mind. The cloud is where the puck, err money is going, but it isn't there yet — not like it's going to be. Build the Cloud Practice Now The trick for partners at this point in the cloud evolution is to understand how to get customers past their objections, and in many cases past their existing missteps, and to build a high-quality stable of cloud offerings which can meet a broad set of customer demands. Vetting partners can be a demanding task. "While price is always a consideration, vetting a provider includes many other considerations," said 0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 * * * * * * * 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2019 2020 Global Public Cloud Purchases, 2008-2020 In U.S. Billions + How can you tell if a cloud service and its features will work well for you and your customers? In the session, "Look Under the Hood: Vetting Cloud Services," moderator Jo Peterson, vice president of converged cloud and data services for Clarify360, directs a panel discussion on how to thoroughly vet a cloud service before putting it in front of clients. Panelists will include Michael Goodenough, vice president of cloud solutions for BCM, and Ryan Will, managing partner and president of cloud/data center services for Converged Network Services Group. MONDAY, MARCH 16, 3-3:45 P.M * Projected Source: Forrester Research, 2013 Cloud applications or SaaS Cloud platforms (Iaas/Paas) Cloud business services (storage, file services, integration)

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