special focus Embracing the cloud More partners are moving to provide cloud services to their customers as SMB adoption is growing at a rapid pace n AMIT SINGH
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recent study by AMI Partners indicated that 200,000 SMBs would adopt cloud computing solutions, mainly Software-as-a-Service (SaaS) and Infrastructure-as-a-Service (IaaS), in the next five years. With their high scalability and pay-as-you-go pricing model, cloud services offer greater business effectiveness at lower cost. For the SMB segment, cloud services lower the barriers to market growth by lowering technology costs and upfront investments. Says Neha Jalan, Senior Associate, AMI Partners, “Although 40 percent of the SMBs are PC-penetrated, three-fourths of them do not have an in-house technical support team, especially small businesses (1-99 employees), hence they tend to adopt affordable cloud services with a monthly fee.” Leading vendors are driving this forward by providing a range of cloud-based platform and application services. There exists plenty of space for the tier-2 channel to provide additional dimensions to the existing service portfolio. With cloud vendors providing partners with the skills and resources required to deliver cloud-based services, the opportunities for the IT channel are bright. “Most SMBs have made little investment in IT infrastructure, and are therefore considering cloud services without any upfront investment,” says Sanjeev Gupta, CEO, Albion Infotel. “Channel partners have lots of opportunities for providing installation, integration, customization and maintenance services to these customers.” So far the bulk of SMB cloud spending has been on SaaS-based messaging and collaboration, and CRM, payroll, accounting, financial and Web conferencing applications. Channel partners are earning respectable sums by reselling cloud services to their customers, and have plans to expand their cloud offerings by partnering with more vendors and offering more applications. “We have signed up more than 15 customers in the past several months,” reveals Suresh Ramani, CEO, TechGyan, Mumbai. “We expect to earn about `15 lakh
“Although 40 percent of SMBs are PC-penetrated, three-fourths of them do not have an in-house tech support team, hence they tend to adopt affordable cloud services”
“We have plans to offer disaster recovery solutions from Netmagic, security solutions from Trend Micro, and infrastructure solutions from Amazon”
Neha Jalan
Suresh Ramani
Senior Associate, AMI Partners
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in annual commissions in FY2011-12 against the `6 lakh earned in FY2010-11 from Microsoft cloud services alone.” According to Ramani, Microsoft offers 12 percent commission per new seat signed up, and 6 percent commission on renewals, so the quantum of business TechGyan is expecting is more than `1.25 crore during the next fiscal. TechGyan is also looking to add new vendors and cloud services to its portfolio. “We are looking for applications complementary to Microsoft’s messaging and collaboration products. We also have plans to offer back-up and DR solutions from Netmagic, security solutions from Trend Micro, and infrastructure solutions from Amazon,” Ramani adds. Mumbai-based Questa Software currently offers Office 365 and has plans to expand its portfolio by partnering with Cisco and CtrlS to offer applications including CRM, hosted infra management software, and data backup and DR solutions. “To make that happen, we have plans to double our employee strength. We expect to garner `24 lakh in commission in FY2011-12 from cloud services,” says Manish Tandon, MD, Questa. “Besides providing CRM and email applications from Tata Communications and Tulip to about 20 SMB customers, we recently introduced data storage solutions,” informs Sandeep Vahi, Director, Compton Business Solutions, Delhi. “With these storage solutions and plans to introduce industry-specific applications such as ShawMan CRM for hospitality, we aim to increase our cloud customer base to 10,000 in the next two years.” “An SMB cloud partner can earn up to 18-20 percent margin and 5-6 percent month-on-month subsequently,” suggests Sandeep Salman, an IT consultant who is helping two start-ups in Delhi to drive their IT business using cloud offerings. Beyond reselling cloud services, a few partners have transformed themselves into cloud providers and are seeing benefits beyond incremental sales opportunities. They are hosting servers and applications, and offer
Computer Reseller News
01/11/2011 www.crn.in
CEO, TechGyan