1 Feb 2011

Cloud Computing Reseller & Publishing Industry

Posted by Axel Schultze

The Information Technology Industry is going through an interesting migration. It is somewhat similar to the migration from “big iron” also known as main frame computers to personal computers in the 80’s.

Please don’t make the mistake to compare it with the Internet evolution as the Internet was an “add on” to the existing PC landscape. The Internet was an additive way of leveraging the PC as it was.

Cloud computing however changes the way applications are developed, delivered, maintained, used… PCs allowed for decentralizing the highly concentrated data and technology power from main frames and its connected terminals and get the full computing power under the control of its user.

Cloud computing takes that “decentralizing” yet another step further. It decomposes the computing power again and uses the best possible technology and the law of the economy of scale and brings it to the individual user. Instead of having everything in one box that makes it rather hard to share with others and makes it complicated to have others service and maintain data or functionalities or have others help protect data and data integrity – cloud computing moves both functionalities AND services into the so called cloud and allows users or companies to benefit from the new economy of scale as well as services that are not affordable to perform on an individual basis.

Now for RESELLERS this is like heaven because a reseller or SI or VAR can perform much more services at a much lower cost and can reach much more customers than ever before. The acquisition of the necessary new knowledge is – at least right now – very easy as any cloud product vendor provides that knowledge actually for free.

What has that to do with the Publishing Industry? The up and coming Internet boom in the late 90’s would have been heaven for publishers, as it allowed them to distribute news even faster and at a much lower cost than ever before. The biggest cost in selling a news paper was it’s multi million dollar printing presses and the ever growing cost to deliver a single newspaper to an individual home or apartment every day and in time. The majority of publishers never understood the advantage as they all focused on their advertising business which was the biggest money maker for them.

VARs, SIs and Reseller have the same issue – not understanding the market dynamics, the huge opportunity and the necessary alignment with the market evolution. While many vendors try very had to help reseller to “migrate”, at the end if resellers don’t follow – they will extinct and *force* vendors to develop alternative channels.

Most of the “micro computer shops” in the 80’s extinct and made way for a new generation of smarter, more agile and business focused solution provider. The ones who hoped to sell their shop were terribly disappointed as nobody was interested to buy an old shop, with old technology – even the customer base wasn’t worth an acquisition, the switching cost at such a state of a company is to low to even bother.

It is still open how the channel of the new decade will be formed, who the player will be and how fast this will happen. One thing is for sure the vendors will not wait and see – they will grow as the market is growing at two digit figures rates.

Axel

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