Between 2013 and 2016, the overall cloud market grew from $78 billion to an estimated $150 billion. With cloud adoption continuing at a steady pace, traditional IT distributors and VARs have had to adapt to their new reality. Those who haven’t been able — or in many cases, refused — to adapt to the changing market and changing customer needs have found themselves shut out.
From Building to Consumption
The IT industry as a whole is making a fundamental shift from building IT to consuming IT, according to a recent study from McKinsey & Company. Although enterprises are rapidly making the transition, medium-sized companies are approaching the new model at a slightly slower pace. It’s here where new business opportunities for VARs present themselves, allowing them to thrive in today’s cloud-driven environment.
Companies of all sizes have become increasingly at ease with the public cloud, although the majority of IT decision makers seem to prefer private clouds and hybrid environments created from converged infrastructure. In spite of this, hardware sales remain relatively strong. According to CompTIA’s annual State of the Channel study, 55 percent of channel partners polled considered hardware to be essential to their business. This might run counter to the latest advice for VARs to transition into partial or full MSPs, but there aren’t any contradictory elements to consider.
Specialization Is the Key
Although VARs are still making their living from virtual and actual hardware, channel partners will eventually have to incorporate services into their business models. Companies must also find a way to distinguish themselves in a marketplace where fierce competition reigns supreme. For many companies, becoming specialized in one particular area has been the ticket to success.
One example of this specialization involves IT monitoring and management. The former has taken on an outsized importance due to increased complexity when it comes to legacy data centers and cloud services. Using separate monitoring tools for public and private clouds as well as legacy data centers significantly decreases visibility, making it more difficult for companies to identify and resolve problems before they spiral out of control and negatively impact business functions.
VARs can use this opportunity to distinguish themselves as IT monitoring and management experts and showcase their expertise by bridging the gap between the various systems, services, and providers currently relied on by IT decision makers.
The More Things Change…
Many experts have expected a significant decrease in the overall size of IT staff due to increased reliance on the cloud, but recent studies currently point towards a change in the way IT departments are composed. Instead of losing IT staff, the steady transition towards cloud services has resulted in generalist IT staff being supplanted by IT staffers who are able to bring specialized skills to the table.
Despite the rise of cloud services thinning out the ranks of traditional VARs, this transition doesn’t spell doom for VARs. As long as channel partners are able to adapt quickly and branch out into new areas, including IT monitoring and data security or even a foray into business processes not entirely rooted in IT, such companies may be able to retain their profitability, even in the era of the cloud.
If you want to know what your company needs to survive in today’s cloud-driven world, the experts at eXemplify can help. Contact us today for a no-obligation consultation.