Rise of Cloud, MSP Growth, Force Channel Changes

It’s hard to escape the fact that the rise of the cloud and the dynamic nature of the MSP market are forcing channel partners to catch up or give up, according to research from Rise, an Infrastructure-as-a-Service (IaaS) provider.

The survey was done of U.K.-based channel players, but the results have meaning around the world as the cloud and MSP growth are global phenomena.

Rise says that 31 percent of channel partners have already completely changed how they do things to account for the cloud and to provide cloud services.

Nearly two thirds, some 65 percent of the VARs and MSPs surveyed, had made some changes, but have not completely modified the business the way 31 percent have.

"A vast majority of the IT channel has had to shake it up and adapt in order to capitalize on the cloud opportunity, because the way services are sold and subsequently delivered to businesses is permanently changing," said James Henigan, Managing Director of Rise. "As well as this, over half – 54 percent – of the respondents said that the IT industry has not over complicated the cloud, but on the whole there is an agreement that all parties need to do more to educate customers as technology develops."

In the U.K., more than half of all businesses are using the cloud in some form, and overall cloud use is increasing over 10 percent a year.

If channel partners properly adapt to the cloud, they can sell these services to existing customers. Some 42 percent of those surveyed said customer loyalty is a key factor in the success sale of new cloud services.

Education about the cloud is important for partners and customers alike. "Education is a critical opportunity for channel providers and vendors alike to encourage cloud adoption, particularly amongst SMBs. Small businesses need to be able to trust someone to come in and walk them through the process, that's why the relationship a channel provider has with its customers is so important. There is still a thinly veiled ignorance and fear of the cloud amongst British businesses; education is critical to changing this."

Rise has more than half a million customers for its hosting services and Datacenter on Demand. It handles 40 million e-mails every day, stores 5 billion MB of data, and is responsible for 8,000 hosted websites.