Change happens fast. Just ask the woolly mammoths, the dinosaurs and the dodo birds. Don’t let cloud services be your climate change, unexpected meteorite or super-predator.
Businesses of all sizes are embracing cloud services, and robust growth lies ahead. Market estimates vary, but only in the magnitude of strength. Odin’s 2015 forecast puts the size of the U.S. SMB cloud services market at $25.2 billion and predicts a compound annual growth rate of 11.4 percent for the next three years. Recent research from IDC predicts that spending on public cloud services worldwide will grow at 19.4 percent—six times faster than overall IT spending—to reach more than $141 billion by 2019. SMBs are expected to make up 40 percent—$61 billion—of that total.
“Channel partners have to transform their business to take advantage of the new technology consumption norm: cloud,” says Renée Bergeron, vice president of cloud computing, Ingram Micro. “Cloud solutions require a different business model from the on-premise solution business model. With cloud solutions, you acquire customers differently, you sell solutions differently and you sell them to business leaders, not to the IT department. Salespeople are incented differently. Every aspect of your business needs to be transformed.”
The Future Is Here
Ingram Micro is helping solution providers control their fates in this new world. The company is expanding Cloud Marketplace, an ecosystem of services that enables solution providers to sell cloud services more efficiently, effectively and profitably.
Nearly three years old, Cloud Marketplace has 30,000 registered solution providers who can access, provision and manage cloud services from 15 different vendors. Ingram Micro has been rolling out services worldwide, and now serves 17 different geographies in their local languages and currencies. In December, Ingram Micro completed its Ecosystem of Cloud by acquiring Odin Service Automation (OSA) software, along with associated cloud management technologies, intellectual property and the Odin brand from Parallels Holdings Ltd. Cloud Marketplace was based on OSA, and now, Ingram Micro’s ownership of the software bolsters offerings in several significant ways, says Nimesh Dave, executive vice president of global cloud computing, Ingram Micro. With ownership comes control, so Ingram Micro can
shepherd development of the software in ways that best support channel needs.
Another key aspect was adding the expertise of 500 Odin employees, of whom 380 are technical, notes Dave. This brings the total number of full-time Ingram Micro employees specifically dedicated to the cloud marketplace to more than 1,250—up from 70 just two years ago.
Accelerate Cloud Adoption
The acquisition of Odin will significantly ease cloud integration by reducing the time and effort needed for vendors to integrate their services with a solution provider’s offering. The Application Packaging Standard (APS), which serves as a way to integrate application software with cloud software, was also part of the acquisition.
Before Ingram Micro owned OSA and APS, vendors that licensed Odin still had to recruit customers and expend significant engineering resources to integrate with each individual customer. This process was complicated, time-consuming
Owning the software and the APS dramatically streamlines the process. Now a vendor need only engineer once to connect to Ingram Micro Cloud Marketplace, and then any solution
provider can easily source, manage and provision that vendor’s cloud services. That means vendors can reach a broader base of customers through just one interface. On the flip side, solution providers can more easily access and provision services from these vendors.
The ecosystem approach differentiates Ingram Micro from other distributors that treat cloud services as “just another SKU they put on their line card,” says Bergeron. “The cloud is all about commercial enablement: the integration of vendors into the platform, the software
development, the product management and the vertical solutions that we’re building into our marketplace.”
“We’ve made key improvements on the way we work with vendors,” says Tarik Faouzi, vice president, global cloud partners and solutions, Ingram Micro. “Before, we basically on-boarded vendors, and now we have a true engagement. Ingram Micro works with vendors on the best approach to deliver the service and advise on the technical integration.”
As Ingram Micro becomes a trusted advisor from a technical and a business perspective, the value compounds. “Vendors can offer products that integrate with third parties,” he says. “We can create integrated services that solution providers can easily consume. We really simplify the consumption of cloud services for our customers.”
Thrive in the New World
A solution provider focused on healthcare, for example, can buy a bundle of services through Cloud Marketplace, rather than having to buy multiple different solutions and integrate them on its own. They are able to deliver value to their customers more quickly. Solution providers even can white-label the services on the Cloud Marketplace.
Ingram Micro is launching several new channel enablement programs to help solution providers make the evolution to the cloud. Cloud University launches in April 2016 as an e-learning partner to help solution providers better understand how to grow their business successfully by transforming to a cloud business model. Ingram Micro also is helping solution providers expand their digital presence and thought leadership with Cloud Store and other white-labeled e-commerce solutions, which allow partners to take advantage of the digital revolution, and leverage content, social media and digital marketing as their customer acquisition strategy.
Cloud Marketplace also gives solution providers a single portal through which to manage their cloud businesses; for example, by consolidating billing for various services into one invoice from the solution provider to the end customer. It also includes 24/7 customer
support, so Ingram Micro can identify and troubleshoot the source of service problems if the
solution provider wishes.
Focus on High-Value Services
Taking advantage of Ingram Micro’s cloud ecosystem has helped InfinIT Consulting to become
more than just a cloud services provider for its customers, says Jerod Powell, founder and CEO of the San Jose, Calif.-based company. InfinIT was the first partner in Ingram Micro’s Cloud Solution Provider program and had the first online store on the Cloud Marketplace.
“Today, we think of ourselves as a digital transformation engine for business,” Powell says. He especially appreciates the consolidated invoicing of services to his end customers. “You didn’t own the billing relationship with your client under the previous model,” he explains. When
customers got a bill from the cloud service vendor rather than from InfinIT, “it was really
easy to get disconnected from our clients.”
The marketplace also gives InfinIT the ability to set its own pricing and margins, control that enables InfinIT to offer Microsoft Office 365 at a low price, for example, to get a foot in the door and then sell its own higher-value-added services. “Everybody can sell Microsoft Office 365,” Powell says. “Our real value as a Microsoft cloud provider is the other stuff we do. We package a lot of our own applications, unique intellectual property, with the basic cloud services.” That has helped the company to become a more profitable business, he adds.
A Growing Ecosystem
Ingram Micro’s cloud ecosystem is attracting new vendors as well. Last fall, the company signed a global distribution agreement with cloud-based collaboration service Dropbox, which will be available on the Cloud Marketplace this spring. “Ingram Micro’s stewardship of Odin will make the platform even more robust and channel-friendly,” says Peter Davidson, head of North American channels, Dropbox.
In addition, as a software-as-a-service platform, Dropbox will leverage Ingram Micro’s ability to collect and use business intelligence on the channel and customer segments to help guide its own global channel strategies. “Ingram Micro has completely redefined the role of the
distributor,” he says. “We see them as a market-maker and an indispensable business partner.”
Indeed, Ingram Micro’s cloud strategy is creating a new ecosystem that will protect resellers as the IT world evolves in the digital era. The Cloud Marketplace’s growth—50 percent month-on-month through the fourth quarter of 2015, according to Bergeron—provides strong support for solution providers, helping to prevent their businesses from going the way of the dodo bird.