It struck me in a very personal way the other day that cloud computing is here in a big way – and it’s not good for the channel.
 
For me as a consumer, here’s what it looks like:

• I download my books from Amazon to my Kindle, so Barnes & Noble lost my business,
• I download as many movies as I can watch via Netflix, so Blockbuster lost my business,
• I listen to my music via Pandora, so both the poor record store and even iTunes lost my business.

In these examples, one channel player won, and the other lost. And it’s not happening just in a B2C environment. From a business perspective:

• We store business information on a wiki (Socialtext), so the local server reseller lost our business,
• We backup our systems via Mozy, so Best Buy / Fry’s (the channel) lost our business,
• We use Salesforce, so the local CRM reseller lost our business.

In these very simple examples, you see how the channel is disintermediated. (And if you would like a more comprehensive and more enterprise-level perspective of cloud computing, see here.)

From a vendor perspective, the changing channel landscape poses both an opportunity and a challenge. Your opportunity may lie in grabbing a greater share of wallet of the buyer because you don’t need the channel as much. Or, your opportunity may lie in aligning yourself with the emerging channel players (transitioning from CD stores to iTunes to the Pandora-like solutions).

However, your challenge lies in the fact that you probably rely very heavily on the channel today. The vendor that creates the best value proposition for the channel to sell their cloud computing solution will take the most market share. We see some of our clients who help their resellers change to succeed with them and we see others that don’t yet understand the importance of the channel in cloud computing.

Have you determined who the right channel players are for you and what your value proposition should be for them?