Presentation at Distree XXL Conference in Monte Carlo, Feb 2011. Contact me for further details, poneill@forrester.com

1. Coming Upheaval in Technology Channels: How will New Revenue Streams be Shared Peter O’Neill, Vice President & Principal Analyst DistreeXXl, Monaco, February 10, 2011

2. Agenda

3. The business of IT is becoming empowered Source: January 7, 2011 “BT 2020: IT’s Future In The Empowered Era” Forrester report.

4. And three forces of change impact the business of IT Source: January 7, 2011 “BT 2020: IT’s Future In The Empowered Era” Forrester report.

5. Businesses expect to be more self-sufficient and empowered Source: January 7, 2011 “BT 2020: IT’s Future In The Empowered Era” Forrester report.

6. Agenda

7. Recap: What is cloud computing? Cloud computing is: A standardized IT capability(services, software, or infrastructure)delivered via Internet technologiesin a pay-per-use, self-service way.

9. Horizontal business applications

10. Front-office applications

11. Simple, standardized infrastructure services (IaaS) like storage and compute power

13. Mission critical back-office applications

14. Many custom-built applications

15. The most mission critical back office processes

16. Applications with constant predictable loadLevel ofsharing Public Public transportation Virtualprivate Private Private cars Business value

17. Agenda

18. Channel resellers want to grow Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey

19. Channel resellers want to grow their business by adding new services Slightly, 34% in NA, 57% in EMEA Significant, 49%, 16% Double, 9%, 14% 1% in NA, 10% in EMEA Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey

20. Resellers product sales go down, services up Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey

21. Resellers are already providing managed services Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey

22. Resellers are planning for new managed services Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey

23. Those without managed services see these barriers Source: Forrester/OCE Q3 2010 Global Channel Companies’ Cloud Business Models Online Survey

24. So good resellers are changing their business models Source: July 10, 2009,“The Changing Yin And Yang Of Tech Vendors And Channel Partners” Forrester report

25. Forrester anticipates a “channel washout” 15% MSPs/hosters can serve more customers + Increase in number of MSPs/hosters + No significant increase in number of customers  Fewer channel partners MSPs/hosters can serve more customers + Increase in number of MSPs/hosters + No significant increase in number of customers MSPs/hosters can serve more customers + Increase in number of MSPs/hosters MSPs/hosters can serve more customers M&A The best marketers 1.2m channel partners

26. Agenda

27. Distributors are changing their orientation Historically, distributors provided added value for vendors Inventory, financing, channel management Sales & marketing Often, a distributor specialized on just a few vendors (or just one) In the future, distributors will be providing a service for resellers Vendor aggregation Sales enablement Marketing platform Hosting (physical or wholesale)

29. Vendor – loan/equity

30. 3rd party – Biz2Credit, On Deck Capital

31. Hook your reseller partners up with your MSP partners

32. Infrastructure investment is too high

33. Don’t understand the business model

35. Add a people finder to your online partner community

37. Examples of distributors providing MSP platforms

39. To focus on physical product distribution, consolidate your portfolio and your vendors.