Volume vs hunger - Tuning into Cloud storage & co-lo
Tuesday, June 18, 2019
Cloud is now the top choice for new applications requiring storage, so where should partners be looking to invest?
In IT trade association CompTIA’s last State of the Channel survey, three quarters of the partners questioned said they were optimistic about the channel’s future, citing cloud as the number one reason to feel positive.
“As time has gone on…the reality that cloud is now the fundamental enabling infrastructure for IT has sunk in and the channel has had to decide how they were going to use it,” notes CompTIA in the report.
It makes sense then, that if the channel is now willing to embrace the opportunities created by cloud, partners will be on the lookout for where they can create, or add, new revenue streams to their business. An obvious place to start is the cloud storage market.
ResearchAndMarkets predicts that the global cloud storage market will be worth more than $200 billion by 2026. Elsewhere, figures from the Enterprise Storage Forum show that 68 percent of businesses are using the cloud for some of their storage needs, and the cloud is the top choice for new applications requiring storage.
The hyperscale battlefield
As part of these growth estimates, ‘hyperscale’ providers such as Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform (GCP) are currently in a high-profile battle for market share. Data from Synergy Research Group shows that the number of large datacentres operated by hyperscale providers rose by 11 percent in 2018 to reach 430 worldwide by year end, with a further 132 that are at various stages of planning or building this year.
Dale Vile, CEO and co-founder of analyst Freeform Dynamics says that while the battle to dominate the hyperscale landscape at a channel level is fierce, there is no one leader for any substantial period.
“Organisations are lifting and shifting existing applications to the cloud and modernising them as they are able. We see lots of applications that want to take advantage of the scale of cloud services but still require a common storage and data platform based on traditional applications”Matt Robinson, cloud partner engineer manager, Google Cloud
“There’s a lot of leap-frogging going on,” Vile tells TBT. “Amazon has the volume, but Google has the hunger and is therefore innovating very rapidly and putting a heavy focus on partners. Microsoft meanwhile is exploiting its broader SaaS portfolio and working hard to enable seamless workload deployment across the cloud/on-prem boundary.”
“It’s clear that Microsoft, AWS, IBM and Google are all pursuing aggressive public cloud strategies”, agrees Steve Law, chief technical officer at cloud services distributor Giacom. “The push on public cloud services is evident with many programmes out there encouraging the facilitation of migrations to their respective clouds.”
Law says that, arguably, Microsoft has the strongest hybrid cloud strategy, offering more choice to customers and the greatest business opportunity to its partners. “There is certainly a frenzy in channel for distributors and MSPs vying for their position and relevance as the cloud market transforms,” he tells TBT.
The partner opportunity
All the companies involved are involved in scaling their businesses through onboarding channel partners. On an earnings call last month, CEO Sundar Pichai of Google Cloud parent company Alphabet said the company was “really accelerating and scaling up go-to-market both internally and through our channel partners has been a huge focus”.
In addition, earlier this year Gavriella Schuster, corporate VP, one commercial partner at Microsoft put the opportunity for partners to help customers move their existing on-premise workloads to Azure and start capitalising on the benefits of the cloud at around $50 billion.
So, what rewards can the channel reap from these huge hyperscale investments? As with elsewhere in the channel, the opportunities for partners are embedded in the services that can brand and sell to their customers and can create new opportunities for complementary offerings such as consulting, managed services, software, derivative offerings and other forms of value-add, says Vile.
“Clearly services that provide a high degree of visibility, client segmentation, and management from a billing perspective will ultimately prove attractive,” he notes.
Matt Robinson, cloud partner engineer manager, Google Cloud says the channel is viewing the GCP platform as a growth engine for new sales and service opportunities.
“Organisations are lifting and shifting existing applications to the cloud and modernising them as they are able. We see lots of applications that want to take advantage of the scale of cloud services but still require a common storage and data platform based on traditional applications,” he tells TBT.
In particular, he says partners are providing hybrid cloud modernisation, data warehousing, marketing analytics, work transformation, VM migrations and SAP. “Within each of these solutions, channel partners are delivering incredible value in helping customers take advantage of GCP quickly. For example, many of our channel partners delivering solutions in data warehousing include Hadoop re-platforming in GCP as well as existing data warehouses migrated into BigQuery,” he says.
While a hyperscale datacentre is owned and operated by the likes of AWS, Microsoft, Google and Apple, offering a portfolio of applications and storage services to businesses, a colocation datacentre will sell space, power and cooling to enterprise and hyperscale customers in a specific location.
Co-location datacentres also offer interconnection to Software as a Service (SaaS) such as Salesforce, or Platform as a service (PaaS) like Microsoft Azure. This enables organisations to scale their businesses without the cost and complexity of upfront investment in IT infrastructure and systems. This means that enterprises, already deep into their digital transformation projects, are choosing to use co-lo solutions rather than build and maintain new datacentres while they prepare to migrate workloads into cloud.
“Co-location is a very popular approach for mid-sized organisations that want to maintain control over their IT services,” says Giacom’s Law. “The growth in hybrid solutions that support applications not suited to cloud (or virtualised infrastructures) has fuelled the growth in co-location services. Even AWS launching bare metal server offerings indicates the importance of co-location as a viable and growing need in business IT strategies.
“The enhanced infrastructure and security capabilities offered in co-location datacentres often outstrips the capabilities and cost barriers faced by many mid-sized companies, making co-location a viable alternative to build-it-yourself datacentres and the complexity of migrating legacy/bespoke business applications to the cloud. “Coupled with the available skilled resources to support the day-to-day operations and maintenance, it mitigates the need to recruit expensive and rare staff.”
Vile, meanwhile, says that applications that test, dev and non-critical workloads have traditionally been the target for colocation and cloud storage, there is now momentum growing around ERP and other internal business applications.
“The reasons not to go mission-critical are becoming fewer and fewer, so this is a great time to be out there as partner helping to shift perceptions and encourage customers to take that next step in terms of commitment,” says Vile.
But what other kinds of products and features are likely to be a hit with channel partners? Timm Hoyt, global VP, partners & alliances at data management vendor, Druva says data protection is “an ideal use case for the cloud” because of the required scale, burst usage, and needed resiliency. However, things like limited bandwidth and remote offices can make it challenging to create a complete backup in the cloud.
“Vendors are looking for ways to help enterprises get that first backup to the cloud, and technology like AWS Snowball Edge are a great example. Not only can it help seed the first backup to the cloud faster, but it can also be kept locally to meet stringent SLAs if needed,” he tells TBT. “These sort of solutions, which help enterprises more easily make that transition and stay true to the pay-as-you-go model in the cloud, will continue to be developed by vendors and sought out by partners.”
In an environment as fast-paced as this one, partners need to keep one eye on what’s coming down the line next from vendors. According to Vile, the next big thing will be container storage.
“It doesn’t have to be hard to do if approached the right way, but it can be very hard if you try to do it with the wrong approach. For example, developers can write code that runs in containers but then the ops teams need to understand how to secure and manage them on a daily basis. A lot of the development here is community rather than vendor, but the vendors in turn are either driving or cooperating with the project groups.”
Meanwhile, Law predicts that the downward trend in storage costs, coupled with higher density flash arrays, will drive cloud storage adoption in the SMB segment. What was once the domain of enterprises is fast becoming accessible to SMBs.
“SMBs, just like some enterprises, can have complex needs in terms of application development and support, which require large scale data analysis. The introduction of AI and machine learning products designed specifically to manage and analyse large amounts of data will make an impact this year in the SMB segment. The growth in SMB organisations specialising in predictive modelling through management of vast data sets will fuel this growth,” he says.
There’s no escaping the current movement around hybrid and multi-cloud either, which both require data management offerings, says Jamie Farrelly, VP channel EMEA, Veritas Technologies.
“In the early days of the cloud, many organisations believed that making the transition to the cloud meant a clear choice between on-premises or off-premises solutions. In fact, what we are seeing at present is an increasing number of organisations who are choosing a multi or hybrid approach to the cloud, where some applications remain within their own private infrastructure, whilst others are in the public domain – it’s all about looking at what best supports the organisation and its data,” he tells TBT.
“Another important development is around managed application containers. The ability to be able to create and run separate containers for multiple independent applications or multiple services brings with it benefits such as increased security and increased platform stability.”
In terms of exploiting the opportunity around cloud storage, it’s a good idea to segment your customers according to their pain points, needs, wants, aspirations and constraints – just as you would with traditional software and hardware. “Figure out which ones see a new deployment model as a business opportunity to drive competitiveness, and which ones more focused on simple efficiency and cost. Each will want to hear different messaging,” says Vile.
“Help customers figure out and implement their optimum service mix. Most of them will have a legitimate need for hyperscale services and more specialist ones from regional and local suppliers. Provide advice, and guidance on how to develop a genuine multi-cloud strategy and delivery approach.”
“The relationship with a hyperscale partner doesn’t have to be monogamous – it’s about selecting the right partner for the task in hand, says Farrelly.
“Some of the key areas to consider are how the products and services will be delivered, and whether the pricing structure meets both partner and customer requirements. Partner capabilities also need to be taken into account, both now and in the future – i.e. do you have the skills to deliver?”
Meanwhile, Vile says that the market, while still in its infancy, does offer a huge opportunity for both partners and customers. “It’s mostly coming down to which one is suitable for what at any given point in time. Obviously, the channel can help significantly here. But it’s important to remember that hyperscalers may not be the best answer to every cloud delivery project or service,” he says.
Ultimately, the demand for cloud expertise is only going to increase in the next few years as companies transition to more cloud-based solutions, so investing in training and certification programmes can help position channel partners to be that trusted advisor in the cloud era, says Hoyt.
“Building a cloud-ready sales model is also important, given the major differences from a traditional model that leans on sales and renewal cycles every few years. Partners should also take advantage of tools their cloud vendors provide like training programmes, demand gen support, and sales resources to accelerate their knowledge and stay relevant with their customers.”