Identifying Channel Friend or Foe in the Cloud

Time and again solution providers in the channel have watched vendors launch a cloud computing platform in competition with cloud computing platforms developed by solution providers. Typically, those vendors insist they are only building these cloud platforms in response to requests from customers, and that they hope that solution providers will choose to resell these cloud computing services. But that can get a little confusing when it comes to the customer trying to understand where the cloud computing service they just contracted for is coming from, and then there’s always the issue of sharing the revenue for the service.

So it’s with great interest today that the channel watched EMC at its EMC World 2011 conference roll out a Velocity Service Provider Partner Program under which it will compensate its salespeople for sales of storage that is actually hosted by their channel partners. According to Dennis Hoffman, EMC senior vice president of service providers, after some deep soul searching by the executive management team, EMC has decided it doesn’t plan to compete that aggressively as a provider of cloud computing services. EMC would rather see the vast majority of the business move through their channel partners, he said.

To facilitate that process, EMC is now compensating its sales people for storage sales that wind up being delivered as a service through one of their cloud computing partners. Hoffman acknowledges that culturally this will represent of a major change for EMC sales people that are used to getting paid on delivery of the storage system, as opposed to over the life of a, for example, three year contract. But there’s no getting away from cloud computing as a delivery model, so EMC along with the rest of the industry needs to adjust its compensation models.

EMC is hoping that solution providers will reward EMC for not competing with them directly in the cloud by embracing EMC systems as a core building block for delivering those services. EMC is not the first storage vendors to say it won;t compete directly for storage business in the cloud, so it remains to be seen what kind of impact this new program will have. But one thing that is for certain, the EMC Velocity Service Provider Partner Program is going to put a lot of pressure on vendors to better delineate their relationships with channel partners that right now are having a hard time discerning friend from foe in the cloud.