Cloud Computing, Mobility Will Change Distribution

Changes in computing architecture usually have implications for the communications business, and cloud computing should not prove to be different. In fact, says Carolyn April, CompTIA director of technology analysis, the impact on the business is illustrated by the fact that “mobility and cloud are almost the same.”

At a high level, mobile devices virtually require cloud services. Where “sideloading” is a reasonable operation on a PC, it is painful on a tablet or smart phone. The “best” way to deliver software to a tablet or smart phone is by the mobile network or some other untethered method.

That should reinforce the notion that communications service providers are right to see cloud computing as a natural opportunity.

But that also should raise a warning flag for distributors in the information technology business. The downside, says April, is that there is significant danger of disintermediation. In other words, when any app is just a download from an app store, and all data is stored and updated in the cloud, there is less need for third parties to load, configure and update those applications.

And even where cloud computing and mobile device use do not completely remove the need for information technology specialists, those trends will change revenue prospects, profit margins and sales effort and skills.

“After-sales work has been the difficult stuff,” says April. “Cloud and mobile simplify all that.”

Sooner or later, most channel partners will find they must spend more time and money on sales, even as the average value of a sale declines, says April. That trend also implies that more prospects will have to be cultivated, and more volume of sales made.

That might remind you of the basic task for sellers of long distance voice minutes. As prices have declined, service providers have had to boost sales volume to maintain the same level of revenues.

Channel partners might also find they need sales people with different skills (people used to selling recurring services) than the people who today are the mainstay of transactional sales (selling equipment and systems).

The same dynamics will hold for communications service providers entering the retail part of the cloud computing business. It will, over time, tend to be a volume business. On the other hand, communications service provider sales and marketing teams are quite used to that model.

Cloud computing and mobility, in other words, represents more than a technology change; it is a “delivery shift.” At least in principle, cloud computing and mobility could play to a communications service provider’s historic strengths.