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When to Bundle the Network in Cloud Services

So we recently surveyed our enterprise customers and found that when it comes to advice about implementing the cloud, they want to hear from

1. Third party consultants

2. Systems integrators

3. Application vendors

Which got us thinking about something – that is, if you are a local system integrator or VAR you may find that your business model is changing. Rather than selling boxes, software, and implementation services and being on your way, you may need to think about becoming the local hoster for the new collaboration tools like Office365, or setting up infrastructure services (IaaS) on private vBlocks.  Today you are the trusted advisor for helping customers implement Enterprise IT applications, but how does the relationship change when the Enterprise wants to buy UC seats or compute cycles?

The lean IT teams of 2011 are looking for help. IDC survey data shows about half of Enterprises are educating on or evaluating cloud for a specific need. And this is pretty consistent with what we’re hearing from our customers:  big banks have teams poking at the security stories of cloud collaboration tools; start ups are told by their investors not to spend money on capital, just use cloud services.

In CRN blogger Steven Burke’s recent post, he states “the cloud computing revolution has made it critical that all solution providers act as trusted advisers recommending business-grade carrier services”

Which brings up another question –  if you are looking at offering cloud services, do you need to bundle-in the network? Since the 90’s hosters have offered services with “BYON” – bring your own network. Occasionally a hoster or SI would procure and manage the network on behalf of the customer so they had the “one throat to choke”, but as Burke points out, traditionally it’s been a pain.

If you’re puzzling over whether or notyou want to bundle in the network, back up to the customer needs. Here’s a chart that shows what to do based on a few major business requirements.

If the customer needs end-to-end SLAs for their cloud service, then they probably don’t want to integrate the pieces themselves. The SI/VAR can offer an end-to-end SLA–even in the BYON situation if the network SLAs are provided  by a “known” partner. The carrier will likely lock up the service and the network.

If you are a VAR or solution provider, what business models are you considering? If you are an Enterprise, who do you want to help you implement your cloud offers?

About Carolyn Reuss

As part of Level 3’s Global Infrastructure Services group in IT, I've been responsible for IT Service Improvement and Change & Release Management. The weekends are about managing my kids’ soccer teams and trying to work in some combination of the great outdoors and great foodie hangouts around North/Metro Denver.

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