Ignore the false prophets, cloud is here to stay

There have been many false dawns on the way to the cloud but this time it's for real and the channel has a part to play

My sensors are always on full alert when I see IT industry pundits predicting the death of this and a boom in that.

We've been here lots of times before. As soon as someone invents a new technology, there will be a rash of editorials and think pieces asking: Is this the death of the data centre/mainframe / stackable hub?

On the other side of the coin, there are the endless false dawns. Take the concept of Application Service Provision (ASP), that hit the headlines around about the turn of the century. The ASP boom wasn’t so much a false dawn as a South Sea Bubble. There were a lot of casualties.

It was a blood-birth: some companies, such as Equinox, went bust. Even the survivors didn’t escape unscathed.

Cable and Wireless (as was) spent millions restructuring itself in preparation for a market that never materialised. When companies lose money on that scale there’s always a victim: employees get laid off and shareholders see the value of their nest eggs wiped out.

The strange thing was that there was a potential market for ASPs, but only with the right conditions in place (bandwidth, mature apps, speedy delivery). You know what? There is a market for time-travel machines, but the conditions aren’t ready for that either. But I don’t go round delivering White Papers and Market Reports that predict TTS (Time Travel Services) will be worth twenty terabezillion dollars by the year 2020. Give me a break.

I was selling telecoms at the time and the disruption of the ASP market was incredibly damaging. An analyst firm called Durlacher, you may recall, predicted massive growth for the uptake of ASP services. As did many other big names, whom I won’t mention because, unlike Durlacher, they are still in business. The competition for attention meant that analysts made ever bolder predictions for the future of this market, but for whose benefit?

At the peak of hysteria, the ASP market was predicted to be worth around £12 billion across Europe. The great thing about making predictions for the future is that, in five years, nobody will remember what you said and pick you up on it.

You might think this punditry is harmless but it’s not. People took the ASP market very seriously: companies revised their spending plans, IT managers were pressurised into preparing for something they didn’t want and many telcos revamped their whole product and marketing strategy to cater for a false dawn that never came.

Cable & Wireless is a case in point. Everyone, from big players like IBM and CapGemini, Ernst & Young, down to IBM resellers like Panacea, geared up and restructured for a service market that didn’t materialise.

A Dataquest analyst at the time (Alison Taylor but she might not like to be reminded of this) told me that IT managers and CIOs had said they had ASP spending plans, because everyone else seemed to be saying it. Nobody dared speak out and by time it was revealed that the king was in the altogether, companies were already in too deep.

There was a similar story when IP telephony was supposedly going to hand the PBX manufacturers the black spot. There were some seriously bad start-ups in the IP Centrex market and a lot of resellers and comms dealers lost their fortunes thanks to one particularly bad franchise. (I shan’t name it, to save you getting a writ. But if you don’t know who I’m talking about I will tell you privately – if you come to one of my seminars).

Granted, Cisco, Avaya and Samsung (to name but three) are shifting a lot of IP handsets now. But ten years ago, a lot of the humble foot soldiers of the channel were getting stranded on the beach with no support and cash flow to sustain them.

Resellers. Dealers. The Channel. There, I’ve said the three dirtiest words in the IT business.

There are many who reacted with glee at the idea that the cloud would bring about the death of the reseller.

I’m afraid that’s not going to happen. The market is ready for cloud computing and there are many benefits. I know of at least one mobile service provider who is overjoyed at how easy it is to set up a virtual server with Amazon EC4. The operations manager told me he provisioned a new application for a mobile operator in a matter of hours.

But, for the majority of the time, there will be far too much complex integration work to be done. So many loose ends to tie up and each one a situation you may not have dealt with before. Integrating apps across a firewall, complying with a range of unfamiliar standards and protocols, is not something you will do every day. So you are better off calling in a third party such as a systems Integrator. Because that’s what they do.

All the time. Like Abraham, they lead us across the bridged networks of slow connections and costly systems to the promised land of new and emerging technologies and having the technical skill to guide us there safely.

Do I hear an amen? Well you should. Because the benefits these third parties offer IT managers and those with decision making powers are essentially twofold. Firstly, there's job protection – a “tangible” someone else to blame when things go wrong (cloud computing by its very nature can offer little in the way of solid support). Secondly, users are offered more security (always a thorny topic with cloud) through stringent service level agreements of available uptime and backup disaster recovery scenarios.

And, thanks to the economic situation, many enterprises now have a drastically reduced IT even though the workload has not gone away. The flip side to using resellers, VARs and the channel is that when things go well, you’re lauded by the company, for your commercial insight in striking such a good deal for the business both technically and financially.

If the NHS’s Connecting for Health programme had been a success, you can bet that the service providers would have barely got a mention in the footnotes of the media accounts.

But because it was an expensive disaster, the names of the systems integrators are prominent in most stories. Who knows what went wrong? Can any of us say with any degree of certainty? But we do know the BT and Fujitsu haven’t been helped by the unwelcome publicity.

So, the cloud won’t kill off the channel. Not just yet, anyway, but as one IT manager was commented as saying, that the time for the channel to kiss my ASP goodbye has long gone.

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