Many VARs can be fearful of creating their own cloud provider business because they're not entirely sure how to make it profitable. But in a world in which managed services and recurring revenues are driving channel profitability, more solution providers are eyeing the opportunity to jump into the rich money-making cloud opportunities as adoption rates begin to increase.
Although it takes a lot of time, resources and money to get your own cloud up and running effectively, the juice is worth the squeeze, says Robert Keblusek, chief technology officer of Downers Grove, Ill.-based Sentinel Technologies, a top Cisco and EMC cloud partner, ranked No. 128 on CRN’s Solution Provider 500 list.
Sentinel has created its own cloud provider offering, CloudSelect, a suite of integrated cloud technologies and advisory services that enables customers to tailor the location, management and consumption of IT resources. It's Sentinel's largest growth area this year.
"We're anticipating between 300 percent to 400 percent growth for [CloudSelect] this year," said Keblusek. "It's a huge revenue driver for us and it’s continuing to just gain more and more momentum."
The fast-growing solution provider says the traditional VAR should create its own cloud to capture the rich services and solutions opportunities business leaders are seeking.
"It takes a really big commitment. It's resource intensive, capital intensive, you need discipline and to be able to change your approach model," said Keblusek.
Revenues from cloud infrastructure services exceeded $6 billion for the third quarter of 2015, according to recent data from Synergy Research Group, proving that it's one of the most lucrative opportunities in all of IT. Over the last four quarters, cloud services has generated more than $21 billion in revenues.