Is Cloud Profitability An Oxymoron?

By Neal Bradbury, Co-Founder and Vice President of Channel Development, Intronis

The IT channel exists because businesses — especially SMBs — have a difficult time keeping up with the demands of IT. Yet with the growing adoption of cloud computing, some industry pundits are questioning where the channel fits. To successfully ride this shifting IT environment, channel companies must move their focus from technology provider to service provider. In this way, channel companies can remain relevant and become even more valuable to their overloaded SMB customers.

Take a look at what happens when end users disregard the channel’s value and try to go to the cloud alone. A study conducted by the IT Process Institute (ITPI), for example, revealed that 37 percent of IT projects fail. When the same group honed in on cloud-specific projects, they discovered the failure rate to be much higher, with 76 percent of companies reporting only low to medium success — nearly twice the failure rate of general IT projects. The reason given is the higher degree of automation and new skills required to manage cloud projects.

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