Lots of news this week about new cloud channel programs from Microsoft and Red Hat.
But I found a few points about the emerging channel proposition for Google Apps worth pointing out. The cloud is changing the rules and well established assumptions of the channel are crumbling. I went thru the Google Apps channel proposition and three things stood-out. Perfect size for a blog post.
1) To become a dealer, you need to prove you can install it. This just isn’t done in other products or services. Basically, the way it normally works is companies apply to become authorized resellers. The mating ritual involves a number of mutual steps, and once completed the dealer typically completes a variety of training hoops and certifications before being authorized. This proven methodology minimizes the risk of a failed implementation due to dealer inexperience.
Google is telling applicants to install first, then apply. Dealers need to prove their ability – not on a written test – but deliver 25 satisfied paying users. It makes a lot of sense, but I haven’t seen it done this way before in technology.
2) The next thing that caught my attention was the Google Apps road map. In the traditional model, manufacturers such as Microsoft provide their dealers (and their customers to a lesser degree) detailed road maps about future releases. Microsoft dealers today are planning for Windows 7 – how to sell it, migrate to it, and support it (to be released this Fall). Road maps for the dealers are typically between one and two years out.
Google said they can’t provide a road map because they don’t really have one. They have Google Labs, they have ideas, and lots of people (internal and external) working on new features. Which features come when, and how they will be received is to be determined. This isn’t the way it is done.
Yesterday, for example, Google released a new anti phishing Labs feature that actually marks specific messages (such as those legitimately from PayPal) as “Super-trustworthy” confirmed. This will be a very powerful and desirable feature. It is unlikely this feature was on a road map 18 months ago. More likely it got started in March, after a major Phishing attack targeted Google users earlier this year.
3) I thought the Google Apps reseller business proposition was surprisingly murky. The way you recruit VARs is fairly proven; show the opportunity and proven model. Clearly there isn’t a business in just reselling Google seats. Google Apps aren’t very expensive, thus the business prop of reselling them isn’t very lucrative. The revenue opportunity lies in related products and services. But what does that model look like?
I believe it is there and the winners will find it. But rather than a model to copy, VARs are advised to go after complementary opportunities. Hmmm, it isn’t the server (sales, management, or service). It isn’t in client software. It isn’t standard add-ons like virus or spam protection software. It isn’t in remote access or firewalls or upgraded desktops or BES or off site backups or NAS or …. But it’s there. Maybe that is why they are called a search company.
As traditional products and services move toward the cloud, the reseller channel is in for a highly disruptive ride. It makes sense, the cloud is delivering a totally new value prop to the end user – thus the VAR will also need to redefine the V in their TLA.