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Part III: The Cloud Crux of the Emerging Market Conflict

By John Cowan, CEO

As the Internet has matured over the past ten years, channel disintermediation was rather limited in scope.   Managed co-lo operators were busy picking up the pieces from companies like Exodus and Worldcom and other dot bombs, building out the new infrastructure foundation for customers to ‘host’ or rent virtual or physical servers in their purpose built facilities.   Companies like Savvis, Terremark, Data Return and Rackspace (and even a few telco’s) were building co-lo businesses that featured the missing link to making serious dough in this business: Services.

Regardless of where they sit on the maturity scale, every single channel constituent respects the gravitational pull of Managed Services.  It is the natural evolutionary step in the life of every VAR/integrator that has the moxy to stay in the game.   (I won’t drop a lot of ink on this subject, but if you want some background context, Yuval Shavit penned a really good position paper back in 2008.)

For most of the past 10 years, the existence of managed co-lo providers and VAR/MSP types lived rather harmoniously.  In fact, they often worked together on client projects and initiatives.

This all began to change with the advent of cloud computing.   The cloud, you see, creates a conduit for managed co-lo types to reach beyond the confines of their four walls and into the end user customer domain.    Building cloud platforms on top of virtualization technologies like Xen and VMware, companies like Savvis, Rackspace, Terremark and a cadre of other software enablement companies have become the ultimate threat to the traditional channel stakeholder.

The cloud extends and intensifies the push for disintermediation because, for the first time, services have permanently fused to the foundation of IT:  Infrastructure.   The “as-a-Service” revolution that underpins the cloud paradigm is the ultimate dividing line between service provider and technology vendor.  Regardless of the outcome for the channel in the coming years, we will retrospectively point to the cloud as the catalyst for the upheaval currently gripping the industry.

In part IV of this series, I will attempt to offer a forward-looking business strategy for channel constituents as they prepare for the eventuality of a new IT delivery paradigm.

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More Stories By John Cowan

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.

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