Top five barriers for system integrators to adopt cloud

By Andrew Tucker*
Monday, 21 October, 2013

Top five barriers for system integrators to adopt cloud

Enough has been said about the benefits of the cloud. And the market uptake is only proving that. It was recently reported by the Business Software Alliance’s Global Cloud Computing Scorecard that Australia is the second-most prepared country for cloud technologies. Forrester estimated that the public cloud market in Australia will jump from $732 million in 2011 to $3.2 billion in 2020 (‘Sizing the Cloud Markets in Asia Pacific’, Forrester). Quite impressive, right?

System integrators (SIs) face different barriers to most organisations when it comes to the cloud. Gaining a strategic advantage over traditional SIs is essential for channel players battling to retain customers in this new environment. There’s no longer any doubt that the market is shifting, and SIs will need to shift with it if they are to stay relevant to their customers and remain sustainable.

So what are some of the barriers or primary concerns for systems integrators and what can be done to overcome them?

1. Losing control

Some traditional SIs worry about losing control because they are used to tinkering with the hardware and software controls of their customers’ environments. Instead of worrying about losing control, the focus should be on helping your customers stay in control. Usability and self-service are some of the key drivers to transitioning to the cloud.

SIs should move away from being viewed simply as the IT guys, tinkering in the tech room. Instead, they need to become business partners and advisors to their customers, providing guidance through their customers’ cloud migration.

2. Changing their business model

It can be hard to let go of something you have done for a long time, but the wisdom is in knowing when to dismount the ‘dead horse’, so to speak. The winners now are those SIs who recognise they need to move with the times and adjust their business model accordingly.

Cloud has changed buying behaviour and the purchase decision-making no longer sits solely with the CIO/CFO. This process and the engagement with IT has been dispersed among the lines of business. Changing your model to communicate and work more effectively with the different lines of business within your customer’s organisation will keep your head above water.

3. Cannibalising existing on-premise business

A number of traditional SIs rely on the big hardware refreshes and the dollars that they bring; however, cloud technology now eliminates the need for this in the server room. What’s important is to remember that the customer needs must come first. The business cases for hardware refreshes quite often do not stack up against cloud-based provisioning. By offering customers a strong value-proposition for cloud (hosted desktop) as an alternative to on-premise solutions, SIs get to keep the customer and revenue stream on a month-to-month basis, rather than as an irregular income.

4. Cash flow implications of changing revenue streams

Traditional business models relied on projects to boost cash flow, which led to a ‘feast or famine’ revenue stream. The beauty behind the ‘as a service’ business model is that it provides predictable annuity income.

5. Being in denial about what their customers want from their IT provider

At the end of the day, the customer is going to make their own decisions and you don’t want to find yourself in a position of doing a lot of quoting but winning no business. Customers will vote with their feet, so unless you have a cloud offering you are not going to be competitive in today’s market.

The market is shifting and there is strong interest from customers, especially small to medium-sized businesses wanting to unlock the benefits of cloud and hosted infrastructure traditionally only available to big companies.

*Andrew Tucker is CEO of cloud provider ITonCloud.

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