laying the foundations for ‘the year of the cloud’...in this paper we explore the extent of the...

Laying the foundations for ‘The Year of The Cloud’

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Why connectivity has been replaced by confusion as a barrier to entry

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Calling on a recent survey carried out by leading IT publisher, IDG Global Solutions, the themes outlined in this paper confront current channel sentiment surrounding the opportunities and threats posed by cloud technologies. If we want to reduce the barriers to entry for cloud services we must tap into the hearts and minds of the partner community.

Introduction: Telling industry insights

In October/November 2011 leading IT publisher, IDG Global Solutions, conducted a survey of 300 qualified decision makers from across the SME, corporate and reseller space. The aim was to establish an industry benchmark against which the UK business and partner communities could compare their current IT and telecoms capabilities against their competitors and in-line with wider technology trends.

Some of the most striking insights from the research surround the adoption of cloud-based applications and the apparent gap between increasing end-user demand and the channel’s reticence to harness hosted solutions. With the majority of reseller respondents (55%) choosing not to include cloud applications as part of their offer, the research points to a significant proportion of partners being unconvinced and under-confident when it comes to capitalising on ‘The Cloud’.

In this paper we explore the extent of the market opportunity, perceived barriers to entry and how cloud providers can support partners as they embrace hosted services.

With all the hype of the last few years, you’d be forgiven for thinking that ‘The Year of The Cloud’ was behind us. In reality, research by several respected industry bodies shows that hosted services are yet to hit the mainstream.

Many media predictions do exaggerate the cloud’s current UK standing, but there is evidence that businesses are beginning to see the cost, flexibility and business continuity benefits of turning to hosted solutions and seriously looking into either expanding on their existing cloud infrastructures or exploring cloud for the first time in 2012.

Hosted exchange has paved the way for cloud adoption – reflected by IDG research findings that over a quarter of end-users already embracing the cloud are doing so via email services. Other offerings more readily being exploited are back-up/disaster recovery (DR); storage; and webhosting. Growth in 2012 is likely to centre on these core applications, as well as unified communications (UC) and collaboration solutions, as enterprises seek to advance beyond voice into other services such as video calling and conferencing, web collaboration tools and instant messaging.

Hype or Holy Grail?

Cloud usage across UK businesses 58% don’t use any cloud services 50% of corporate 60% of SMEs

Cloud adoption timings 26% claim to have started using cloud within the last five years 36% within the last 12 months 38% in the last 1 – 2 years

Bringing clarity to confusion: Simplifying the cloud conundrum

‘The Cloud’ is an over-used term that is unclear in itself. Industry jargon has confused the IT and telecoms community, along with the end-user, so it’s unsurprising that the biggest hurdles hampering wider spread adoption is simply lack of understanding.

It’s not an all or nothing trade-off – it’s about ascertaining what’s right for any one organisation, and the beauty of going hosted is the flexibility that this provides. Because partners along with end-users, can benefit from the ability to defer and translate Cap-Ex into Op-Ex it also eliminates the acute financial risks associated with venturing into new technological territories.

Cloud should be considered a means of accessing IT as a service which sits alongside any on-premise capability. It doesn’t mean a total transformation of your offering but rather an enhancement to your existing portfolio.

End-user findings

Of the 58% of businesses still shying away from cloud-based hosting, SMEs show the greatest reticence in making the switch. Cloud technologies have more to offer SMBs than any other segment of industry because of their agility and the budgeting perk of being able to allocate spend as an OPEX rather than a CAPEX.

However, security concerns, confusion over where data is stored and who might have access to it, as well as a desire to avoid the inevitable time investment in deploying a new infrastructure are all factors contributing to the slow uptake amongst SMBs.

Although larger businesses may have more to consider, they are in a position to pick and choose applications that are most suited to an early migration to hosted and integrate these with legacy systems remaining discrete and on-premise. This complication is likely keeping the UK’s bigger businesses from becoming complete cloud converts.



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Too big an opportunity to miss?

Of businesses currently embracing cloud solutions, 94% report that they are satisfied. 85% of those currently using the cloud expect to increase their use over the next 12 months. The research points to a degree of stagnation among companies currently steering clear of the cloud: 84% are yet to invest. Over half of partner organisations questioned do not include cloud services within their hosted portfolio.

While the first wave of adoption has been primarily driven by end user desire for the flexibility that the cloud model provides, it is the pursuit of ongoing cost savings that is the main driver for the second phase of wider adoption.

Given this half-hearted adoption, it is unsurprising that the channel is reflecting this reticence. Given

that end-user demand is a key driver in the reactive nature of the channel, it is to be expected that there is nervousness in adopting a method of deployment that fundamentally requires the industry to change its approach.

But, by not proactively championing a cloud offering, are partners limiting their portfolio potential and jeopardising their competitive standing on an evolving communications landscape?

Partner state of play

There is an opportunity for partners to get up to speed with the hosted proposition to fast-track wider adoption. A confused and concerned marketplace doesn’t buy and the reseller has a role to play in making end-users aware of the added-value third parties can provide in terms of tackling customer pain points and supporting businesses in maximising these latest platforms. But before the channel can capably take this lead, the IDG research reveals a need for greater guidance from across all industry avenues.

An alarmingly low benchmark in the technology category (participants were scored across four criteria: strategy; technology; value; and service), points to partners being dramatically on the back foot when it comes to the cloud market. With partners ranking significantly lower than end-users in this respect, the shortfalls of the so-called industry

‘time lag’ are brought even further to the fore.

Technology is moving faster than the reseller portfolio and there’s an educational requirement for providers to better steer partners by making accessible the tools, information and processes to support them in breaking through barriers to entry and harnessing hosted applications.

Gaining access at board level and leveraging the strength of supplier relationships

It’s down to resellers to point customers in the right direction in terms of what hosted solutions can do for an organisation’s profitability and productivity, so it’s essential that the partner channel can confidently market and sell hosted solutions at board level.

Underperformance or misunderstanding of hosted technology could mean that the partner channel is setting itself up for a sharp fall by failing to embrace the latest products and services ahead of the customer adoption curve. End-user expectations are growing and the need for the IT channel to have a clear stand is essential.

Connectivity is key: Unlocking the cloud and portfolio potential

With Ethernet/EFM networks coming into their own and cheaper than ever before, the cloud is no longer a pipedream. For partners there is a ‘live’ window of opportunity to support customers in upgrading from DSL to Ethernet services, fairly secure in the knowledge that when the time comes for them to take to the cloud they’ll choose to do this with the partner that put them on the path to convergence. This is a logical progression given that there is no point having a robust data centre with great resilience relying on a residential Broadband service.

A quarter of IT resellers never discuss IT and telecoms with their customers at board level.One in five claim never to review their customers’ requirements. The majority tend to have an input into the IT and telecoms strategy of their customers.





ConclusionThe message is that by extending existing product and service portfolios the IT channel can benefit. Furthermore, the drive to offering cloud services is driven by a recognition that the market is moving dramatically in that direction and the IT channel needs to evolve to meet this demand.

End user demand End-user demand for hosted services is growing, and the partner channel must be ready to support its customers in adopting these solutions

Adoption Adoption of the cloud is less about technology and more about challenging the fundamentals of how you manage IT operations

Education Education is missing and this leads to mistrust and inertia, putting businesses in limbo between old and new systems

Strategy Cloud is a strategy that is in-tune with current business and economic imperatives – i.e. improving access and communications with customers and staff, and translating capex to opex

Improved connectivity Improved connectivity through Ethernet and EFM is leading to more effective hosted solutions, and in turn, business benefits.

Increase your understanding Working with a knowledgeable provider can increase your understanding of how to market and sell hosted solutions and improve your portfolio.

About TalkTalk Business

TalkTalk Business has more than 16 years of experience in providing business telecoms to organisations of every shape and size. We offer our partners access to a full portfolio of solutions that includes calls and lines, data connectivity, hosted services and much more. All delivered across our Next Generation Network - the UK’s largest all-IP network with the speed and resilience businesses need. Our experienced UK-based teams are ready to provide support however, and whenever, you and your customers need it.

Overview of hosted portfolio

With TalkTalk Business you can offer your customers a portfolio of robust and feature-rich hosted solutions, including Hosted Contact Centre, UC, Call Recording, and Data Centre.

Overview of the Business Grade Benchmark

In our Business Grade Benchmark research report, we’ve looked at technology spend, trends and strategies across the SME and corporate space, as well progress in channel adoption of new applications, in-line with customer demands.

Working with leading IT publisher, IDG Global Solutions, the survey of 200 end-users and 100 partner representatives gives us insights into reseller perceptions versus the end-user reality when it comes to IT and telecoms strategy, technology, value and service in a wider business context.

The aim was to establish a Business Grade Benchmark based on the industry responses, allowing UK organisations and the partner community to compare their current standing in the competitive landscape.

If you’d like to get involved, an online replica of the IDG survey is available at:

talktalkbusiness.co.uk/partners/businessbenchmark

Upon completion, you’ll receive your Business Grade as a percentage score, as well as a personalised infographic showing how your responses stack up against the industry average.



0800 954 5707Call:

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laying the foundations for ‘the year of the cloud’...in this paper we explore the extent of the...

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