Snowden & old sales model barriers for full cloud adoption

Palm Springs, Calif. – You may not know it, given all the cloud talk and buzz around the subject, but there are issues blocking the full acceptance of the cloud in several large organizations.

Chief among them are how solution providers properly sell cloud services and pay their sales people in the new cloud model. Then there is the Edward Snowden affair. Cloud computing is not an easy sell these days.

Renee Bergeron, the Montreal-born vice president of managed services and cloud computing for distribution giant Ingram Micro, is one of the foremost experts on the cloud and she has had to develop a new approach to working with channel partners on cloud services.

She recently sat down with CDN at the Fall VTN Invitational conference, held here, to talk about this new approach and even provide her thoughts on Snowden.

The following is an edited transcript.

CDN Now:  Have you had to develop a new approach to selling or maybe incenting your reseller partners on cloud services in the last year or so?

Renee Bergeron: Yes, we have had to. In fact, it’s become critical to cloud success. We transformed are programs into how to sell cloud services. This year we’ve been saying you have to sell differently than talking about speeds and feeds and make it more about business value and business transformation. It’s a different dialog and you maybe even selling to a different type of customer. About 75 per cent of cloud services are bought by business leaders as opposed to on-premise solutions bought by an IT department. So it’s a different type of selling and a different value proposition; and it’s to a different part of the organization. We have invested in transforming the programs for the channel and one of them is on how to compensate sales people. The traditional model of reselling does not work for cloud. It does not incent for cloud services and you have to really rethink your investment as well. We developed a new template and blueprints around that.

Most of the resellers sell traditional on-premise-based solutions and there is a quote to achieve or margin on gross dollars to earn. When you look at a cloud solution if a salesperson sells it on-premise they make money on a certain period of time, but in the cloud that could be over three years instead of three months. It’s a drop in the ocean compared to a hardware sale. So we propose to pay salespeople on bookings instead of revenue. This means new contracts have to be signed with the customer that should recognize at least 12 months, but on average cloud sales are well pasted two-years even three. So there are some, limited risks.

CDN Now: The new model for cloud services is segmented by owner, sales and technician. What’s the strategy behind that move?

R.B.: Three years ago we were at a point in time where we were more educational. It was a cloud 101 level. Today we develop role-based training for each of the three focuses. How do you sell the cloud? Who do you sell it to and how do you position the cloud’s value over an on-premise solution. Business owners need to know what the business model is so they can adapt to it and plan their financials and cash flow around it. Next is how do you incent or push the cloud to salespeople and finally technical support and services for the cloud solution.

CDN Now: Why did you want to acquire Toronto-based SoftCom and what’s plan for SoftCom in the Ingram Cloud Marketplace?

R.B.: We had vision for it three years ago; to be a leader in having a single portal and ecommerce available for every reseller along with a single point of contact for them to place an order, orchestrate it and manage it for the customer. We made quite a bit of investment in that and learned that it’s complex so we acquired SoftCom because they have that unique experience in ecommerce and the cloud marketplace. They are very good at transacting and provide a successful ecommerce experience. We want to leverage that capability to accelerate Ingram Micro’s Cloud Marketplace.

There is a side benefit to this. They have an on-boarding solution for cloud services that we do not have. We can now provide new cloud services to partners such as Web design and Web hosting. We did not have any vendor partner for that. They also have SEO (search engine optimization) and domain registration. Those were all gaps in the line card. Now we can provide these solutions to the resellers.

CDN Now: In the past year what cloud solution or service really impressed you?

R.B.:  All of the unified communications (UC) solutions have knocked my socks off. They are really innovative and they are gaining some marketshare.  We have different UC solutions from Cisco and they are amazing for larger organizations. In the mid-space to small RingCentral is a great partner solution and its getting a tonne of interest. Collaborative solutions are very impressive and the one from Box, we know them as a consumer, but you can do so much more with it and it has become a platform for the end user customer. It’s more than just storage and retrieval technology.

Then there is back-up and recovery cloud solutions from Axcient. They have an outstanding solution and there is a lot of growth there. They can back-up individual devices and restore them from the application. This has not been affordable in the past, but not it is because it’s in the cloud. VaultLogix and Symantec also have good solutions in this area.

CDN Now: Edward Snowden’s case is leading to a lot of concern from high tech companies that government, particularly the U.S., will implement new security standards that may impede the growth of cloud services. Does this worry you at all and is there a solution out there that could make everyone happy?

R.B.: If I take a step back and say what if that happened in a non-cloud world? What would be the implications of establishing a standard for cloud security? If I think about it; it would be easier to implement a cloud world with government-led regulations. Cloud services providers would have a point of design they can replicate over and over again. If those requirements are built it would be easier for customers to have a server closet in some office building and not have to worry about this. I think it would contribute to the confidence in the cloud. Three years ago the biggest concern resellers had with the cloud was around security and availability.  Today, we rarely get those questions. Government security standards or regulations would end up being just another check on the checkbox for a cloud services provider.

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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