The way in which IT is delivered, and consumed, has changed dramatically over the past few years. One particularly striking trend is the move towards commoditized storage. As this has happened, the storage channel has faced an ever-increasing challenge to stay relevant and to deliver continued value to their customers. Even the incumbent big-brand storage vendors are axing prices and margins to compete.
This phenomenon is driven by the evolution of cloud-based storage, and the growing adoption of open source solutions. Open source answers growing enterprise requirements to meet high levels of code transparency, custom integration, and security, at the best cost.
Smaller margins can result in new opportunities
The very way IT is purchased and managed today results in smaller channel margins. In the past few years, many resellers in the ecosystem have seen their margins squeezed due to market consolidation, with a focus on cutting costs.
But at the same time, resellers with an accurate perspective on the market, still recognize the valuable opportunities arising from the current situation. Customer investment will keep moving to the next level, where value matters more than costs. With the right strategies at the right time, resellers can maintain competitive differentiation.
The widespread adoption of public cloud storage will open up its own new opportunities, as these solutions come with new types of risks, especially surrounding data protection and confidentiality.
The Challenge of privacy and data protection
The increasing trend to reinforce data protection regulations, is illustrated by GDPR – the new European Data Protection Regulation - coming into force in less than a year. With this new legal framework, serious infringements to data security will lead to fines of up to 4% of a company’s global revenue.
Many companies that have taken advantage of easy-to-buy, consumer-focused online solutions, such as Dropbox, Google Drive or One Drive, will need to switch to Enterprise-grade alternatives in the mid-term, and implement strong data management policies.
This will require companies to keep data on-premise or in a private cloud, and to adopt software which gives them the tools needed to comply with their new data policy, while still enabling them to connect to the most advanced and performant storage backends (software-defined, object storage…)
The future of partnerships: turning commodity into profitable platforms
The storage channel must look to build tight partnerships that enable them to deliver comprehensive, all-in-one solutions to customers. These customers are looking to strike the right balance between data protection and taking advantage of flexible, cost-effective technology environments.
The development of the cloud computing ecosystem brings new demands from corporate customers. Channel partners and ISVs have to adapt their partnerships accordingly, based on a few key principles:
- Drive revenue by creating strong market differentiators: partnerships must be relevant and bring new value into the cloud ecosystem
- The Cloud brings flexibility, which also means complexity, so a robust set of resources should be provided (manuals, technical documentation, marketing material, product roadmaps…), in-depth expertise in support, and skills to deliver sophisticated products and high-level services to end-customers.
- Building a strong, profitable partnership program is an investment in time and resources (both material and human). To avoid wasting time and money, channel partners should select ISVs with business goals that are tightly aligned with their own (target segments, size of accounts…). Both partners must set goals and define the metrics they each want to reach, and make sure that each party has a designated project leader to nurture the collaboration.