Alastair Edwards of Canalys outlines the current state of the cloud industry and what new opportunities are arising in 2015.

1. The changing cloud opportunity
for the channel
Alastair Edwards, Principal Analyst
Insight. Innovation. Impact.
Presentation download
www.canalys.com/download/barcelona
Username: spain
Password: emea
Available until: 30 April 2015

2. Insight. Innovation. Impact.
2014 ended strongly for the IT industry
Canalys IT Titans Index
Revenue growth by region
11% 10%
1% 3%
-1%
9%
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
2% 2%
4%
9%
6%
9%
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
1% 2% 2% 3% 6%
14%
Q3
2013
Q4
2013
Q1
2014
Q2
2014
Q3
2014
Q4
2014
Europe, Middle East & Africa
Americas
Asia Pacific
Source: Latest reported financial results for Apple, Cisco, EMC,
Google, HP, IBM, Intel, Juniper Networks, Lenovo, Microsoft,
Oracle, Salesforce.com, Samsung and SAP

3. Insight. Innovation. Impact.
But competing forces are at play in EMEA
Growth inhibitors
Growth drivers
Rising product
prices
Greek debt
crisis
Russia Skills shortage
Currency
volatility
Security
Data center
transformation
Windows
Server 2003
migration
Low oil price
Shifting
vendor
landscape
Channel performance

4. Insight. Innovation. Impact.
regulation local
open source
The reality of cloud has changed

5. Insight. Innovation. Impact.
Every customer’s IT mix will be different
Public cloudsHostedManagedOn-premises
At workAt home On the move
Security becomes a top priority

6. Insight. Innovation. Impact.
The channel becomes the main route for cloud
Standards-based Integration
Data sovereignty
Professional
services
Compliance
and regulatory
expertise
In-country,
trusted advisor
Security
The channel plays a unique
role in the delivery and
management of hybrid cloud
environments

7. Insight. Innovation. Impact.
ITaaS to represent 37% of revenue by 2017
41%
38%
13%
5%
1% 1%
4%
36% 36%
18%
4% 2%2%
7%
28%
35%
21%
7%
0%
10%
20%
30%
40%
50%
0% 1% - 9% 10% - 24% 25% - 49% 50% - 74% 75% - 100%
2011 2014 2017
ITaaS revenue share
What proportion of your revenue
comes from IT delivered as a service
(managed, hosted and cloud services)?
Source: Canalys survey, 352 IT channel respondents, September 2014

8. Insight. Innovation. Impact.
20%
21%
25%
25%
29%
31%
35%
37%
39%
40%
40%
62%
0% 20% 40% 60% 80%
Agreeing service level agreements with customers
Shifting from upfront to annuity revenue model
Managing profitability
Complexity of integrating with on-premises IT
Changing incentives for sales staff
Addressing new buying points beyond IT department
Long sales cycles
Customers don't see as providers of cloud services
Customers' security concerns over cloud
Finding skilled pre-sales/consulting staff
Cloud providers don't understand the channel
Cloud providers/vendors bypassing the channel
Direct cloud remains greatest channel fear
Significant challenges faced by partners when selling IT-as-a-service
Percentage of respondents
Source: Canalys survey, 352 IT channel respondents, September 2014

9. Insight. Innovation. Impact.
Choose your roles carefully
Managed services
(managing customer-
owed assets)
Cloud services
from own data
center
Cloud services from
third-party data
center
Reselling third-
party cloud
services
Different channel business models are emerging
Changing sales
culture
New profitability
drivers
Portfolio mix – new vendors
and services
Shift to annuity
revenue streams
Manage multiple
business models
New
competitors

10. Insight. Innovation. Impact.
5%
6%
7%
29%
37%
0% 10% 20% 30% 40% 50% 60% 70%
Pre-production services
Big data/analytics
CRM
Vertical applications
Web hosting
Collaboration
Platform-as-a-service
Security
Infrastructure-as-a-service
Productivity applications
Most significant
Second most
Third most
Developing the right cloud portfolio is key
What cloud-based services do you feel represent the
most significant opportunities for the channel today?
Percentage of respondents
Source: Canalys survey, 352 IT channel respondents, September 2014

11. Insight. Innovation. Impact.
Channel partner
Sphere of
influence – key
to unlocking
budget
User User User User
User User User User
CMO CPOCIOCFO COO
CEO
Marketing HRFinance Operations
IT
procurement
Partners must also widen sphere of influence

12. Insight. Innovation. Impact.
Expect IoT to drive a new compute paradigm
Evolution of computing architectures
Mobile
Computing
for anywhere
Cloud
Computing
for demand
Big iron
Computing
for criticality
Distributed
Computing
for everyone
Redistribution of computing workloads based on need
Internet of
Things
Computing
for anything

13. Insight. Innovation. Impact.
Distributors must support this transformation
9% 23% 46% 22%
Very
important
Not at all
important
How important will the role of IT distributors be as ‘cloud aggregators’ ?
68% of partners believe distributors will play
an important role as ‘cloud aggregators’
Source: Canalys survey, 352 IT channel respondents, September 2014

14. Insight. Innovation. Impact.
Changing customer priorities
• Drive the prominence of YOUR brand
• Expand your sphere of INFLUENCE
• DISRUPT established thinking within customers
• CHOOSE the right partners for your future strategy
• Deliver BUSINESS advantage, not just technology
• Remain committed to your CORE VALUES!
Rethink your value proposition
New economic models
Software-led, not
hardware-led
Analytics
Business outcomes
Speed, flexibility
and agility
Evolving value
proposition for
the channel

15. The changing cloud opportunity
for the channel
Alastair Edwards, Principal Analyst
Insight. Innovation. Impact.
Presentation download
www.canalys.com/download/barcelona
Username: spain
Password: emea
Available until: 30 April 2015

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Insight. Innovation. Impact.