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This post is the fourth in a series we’re featuring from Amazon Consulting. Amazon Consulting is a partnering services firm dedicated to helping companies elevate the impact of partnering. The author of this post is Cary Tengler, Director, Client Services.

As Bob Dylan once famously sang, “The times, they are a’changin’.” Recent changes in technology—specifically with cloud computing—have moved technology service providers into an increasingly prominent role in the IT services delivery market.

Many vendors recognized early on the broader value of technology service providers, or TSPs, and created programs to support their role in the partner ecosystem. For instance, “Cisco Powered Network” branding and joint selling efforts have long been a part of Cisco’s service provider strategy.  And it appears the rest of the IT vendor community is coming to the same conclusion.

A recent Amazon Consulting survey of 64 global IT vendors found that 70% view service providers as “very strategic” in their go-to-market plans and only 12% of the vendors viewed them as “customers and not partners.” This increased industry focus on TSPs as part of the emerging “cloud channel” makes it imperative that Cisco’s VARs take a closer look at their own cloud services and partnering strategies.

Many of the largest SPs are making serious investments to bolster downstream channel programs, expand offerings beyond traditional voice services and data circuits, and broaden the scope of partnering options. Most critically, they see a need to recruit more IT-oriented solution providers that have the technical savvy and integration skills to help customers with cloud evaluation, migration, and management tasks – skills not found in most telecom agents.

One US-based service provider/ILEC interviewed recently stated emphatically, “We are de-emphasizing agents in favor of IT solutions providers due to the value they bring in the area of solutions integration.”

The IT vendor community also sees value in fostering these collaborative channel development activities. The Amazon Consulting survey found that 97% of IT vendors see partner-to-partner (P2P) collaboration, i.e., between service providers and solution providers, as critical for service providers to be successful.

Another but equally important type of P2P collaboration is between telecom agents and VARs. These agents have strong selling skills, experience in the voice and data markets, and long-standing carrier and SP relationships.  VARs would be well advised to seek out some mutually beneficial partnerships.

Cloud services delivery is significantly impacting the IT supply chain. As cloud adoption rates grow among end-users – often replacing on-premise equipment and services – it’s incumbent on VARs and solutions providers to evaluate their service provider partnering strategy and make the necessary and appropriate changes to play in the cloud.

Here are some recommendations for Cisco solution providers:

Evaluate Your Company’s Cloud Strategy

Cisco’s Cloud Partner Program was launched earlier this year and addressed three principal roles in the cloud ecosystem:

What will be your company’s role in this ecosystem? All are valid, but each requires different levels of expertise, investment, and go-to-market strategy.  Some baseline considerations include service offerings (SaaS, PaaS, IaaS), SP engagement models (agent, resale, or whitebox), sales and technical staffing, and, of course, financial and revenue issues.

Choose Your Service Providers Carefully and Strategically

Many TSPs, for example, have relatively immature channel models, with limited or no rules of engagement, and are often focused on agent/referral partners only. If deal registration and owning the billing relationship with the end-user is important, these agent-focused models may not be a good fit.  Similarly, your customers may have certain infrastructure requirements that must be met by service providers.  In that case, you may need to seek out a “Cisco Powered” provider to meet that requirement.

Take Advantage of the Cisco Cloud Partner Program

Cisco has a growing portfolio of program benefits designed specifically to help its partners transition to a cloud-oriented business model. Most other vendors are simply not providing the same level of support for their partners.  Take advantage of these resources.
Examples include:

Cisco also conducts frequent cloud-oriented webinars and field marketing events.  For the latest information on all of these services, go to the Cisco Cloud Partner Program site. And do it now!

For more details on Amazon Consulting’s 2011 Service Provider Study, download the Executive Brief or visit the Amazon Consulting website.

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