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Part I: Cloud Computing and the Future of the IT Channel

By John Cowan, CEO

Bottom Line:  The incumbent pioneering cloud vendors are 100% direct to market players – regardless of the lip service they pay to channel programs.  As cloud becomes more and more on the minds of end user customers, Channel stakeholders must take a more active role in the decision making process of their customers to help them shape their cloud strategies.  These two forces are on a collision course in the IT service market for outsourcing, cloud and IT project services.

Part I:  The Channel Garden of Eden
I spent the first half of my career working in the IT outsourcing business.   That experience gave me the opportunity to get to know the politics behind the IT business and the key decision drivers for the customer.  Over the years, I was asked to evaluate countless technology vendors and their various partner programs and incentive packages.   You could say my job a lot of the time was to find the best technology to solve business problems for customers without sacrificing margins.  To a certain extent, I likened the approach to nomadic slash and burn farmers – finding a lush untapped forest, burning it to the ground, reaping the resultant fertile soil until it was no longer sustainable, then moving on again to find more forest.

While as an innovator – this cycle was at times quite painful, we did serve a very important role in the IT ecosystem.    It was our job to take complex technology, simplify it and apply it to customer problems in ways they could understand and appreciate.   This was the source of our value creation and we achieved it with a number of technologies, from Ethernet to SAN to Windows NT to IP telephony and a bunch of other technologies in between.

Why was this role so valuable?  It’s simple.   The process takes time, patience and precision.  None of which the big IT vendors could afford to invest in – if they were to achieve the scale their business models were predicated upon.   One could argue that the channel made companies like Microsoft and the litany of x86 brands that have flourished over the past 30 years or so.   IT vendors needed the ‘channel’ and the ‘channel’ needed the IT vendors.  

It was symbiotic bliss and, for the most part, we all played nice in the sandbox.  This began to change about 10 to 15 years ago.  In Part II of this series of posts, I will explore and examine what I call the Era of Channel Disintermediation.

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John Cowan is co-founder and CEO of 6fusion. John is credited as 6fusion's business model visionary, bridging concepts and services behind cloud computing to the IT Service channel. In 2008, he along with his 6fusion collaborators successfully launched the industry's first single unit of meausurement for x86 computing, known as the Workload Allocation Cube (WAC). John is a 12 year veteran of business and product development within the IT and Telecommunications sectors and a graduate of Queen's University at Kingston.