India Channel Partners Increasing Their Cloud Computing Offerings

Details: James Barton; Category: Trends & Forecasts; 31 January 2011; 10851 views

In spite of the worldwide economic downturn (during which India’s economy showed strong resistance compared to its western counterparts), the overall SMB channel partner universe in India has shown organic growth over the last two years. During this period, the average revenue of these partners increased considerably with a healthy growth expectation over the next year. These findings emerge from a recent survey of channel partners in India by New York-based Access Markets International (AMI)-Partners, Inc.

Part of this growth can be attributed to the change in the product portfolio of partners. SMB channel partners in India have been shifting their focus from hardware to software and services, as demonstrated by the 10% increase in the proportion of independent software vendors (ISVs) and service providers (ISPs) over the last two years.

As Indian SMBs have matured over the years, there has been an increased need for customised solutions. Currently roughly three in ten channel partners offer customised solutions to specific verticals, with manufacturing and accounting being the top two verticals served by Indian channel partners. However, retail and education are the top 2 verticals that partners plan to target in the next twelve months.

Increased SMB sophistication (leading to demand for more complex and customised solutions and services) and higher margins for partners are the primary reasons that a significant proportion of partners are transitioning towards offering more software and services.

“As software and services have become more integral to the SMB IT environment, Software-as-a-service (SaaS) is progressively gaining traction and mindshare,” said Arnab Bhar, Research Analyst at AMI-Partners-India, “as it reduces the initial capex for setting up the IT infrastructure. In addition, cloud-based services also reduce the need for on-premise IT staff, which most SMBs lack anyway. Moreover, the cloud vendors are beginning to push the market demand while also providing local channel partners the cloud infrastructure, skills and resources required to deliver these cloud-based services.”

Similarly, Remote Managed IT Services (RMITS) are also showing strong growth potential. Nearly one out of five partners currently offers some type of Remotely Managed Services, although today these are confined to basic infrastructure-related services like remotely managed PCs and remotely managed servers. But over the next few years, partners stated that they plan to expand beyond offering just basic remote management to include areas such as remotely managed storage devices, networking devices and business applications.

In the future, as channel partners and SMB end users become more comfortable with cloud-based services, AMI expects the local channel partners to offer both SaaS and RMS (either on their own infrastructure or rented from hosting companies) so that SMBs can obtain all their cloud services from a single source.