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Overcoming Channel Conflict in Cloud VendingOvercoming Channel Conflict in Cloud Vending

How do managed service providers (MSPs), software companies, and vendors deal with channel conflict in cloud-vending? By overcoming it.

September 2, 2014

2 Min Read
Overcoming Channel Conflict in Cloud Vending

By Michael Brown 1

In a topic recently discussed by TechTarget, “as solution providers and vendors continue to adjust to the growth of the cloud and SaaS applications, channel conflict remains a concern.”

From the early days of the cloud computing era, software-as-a-service (SaaS) providers have been wary of their own vendors going behind their backs to sell to customers. Providing cloud-based solutions makes this type of dealing very easy for vendors to carry out. While some view channel conflict as mainly a perceived threat, it does appear to be very real.

Terry Hedden, founder and CEO of cloud consulting firm Cloud Guru, suggested that channel conflict is a byproduct of the character of the organizations involved.

“Channel conflict is occurring most in the less mature cloud offerings,” stated Hedden, “and the Microsofts and Amazons of the world [are relatively mature in how they handle it], but small firms are pretty immature in the way they handle it. They have no concept of managing channel conflict or avoiding it – or at least they pretend not to.”

However, Charles Weaver, founder and CEO of MSPAlliance, waivered slightly in his comments on the matter, recognizing that his concerns have shifted from control of the customer to the overarching theme of distribution—who can best put the product in the customer’s hands.

“At [channel conflict’s] core, it’s always about control of the customer,” says Weaver, before adding, “SaaS is all about efficiency of distribution to the customer, and the vendors—some of them, not all—are realizing, ‘Wow.  Maybe we don’t need a channel.’”

To Hedden’s point, Weaver’s approach to channel conflict in the cloud space may be show a very “mature” view of what works in practice to best suit all parties involved in vending cloud solutions.

Rather than referring to a company’s maturity, Weaver’s words referenced their intellect when he said that the companies that are “smarter” are “the ones that have been around the block a time or two and they know they can’t do this without the channel.  They are trying to create technology and business models that embrace the channel, embrace MSPs, because they know they know they play a vital role in their distribution, sales, the ongoing support of that technology.”

Carolyn April, director of industry analysis at CompTIA, accepts that we now find ourselves in a new, more fluid cloud age.

“We’re seeing everybody in the industry having to make adjustments for how they take products to market and solutions to market, how they sell, how they make their solutions,” said April.

Take it from industry analysts and industry players alike, the organizations that will find sustained success in the cloud computing industry are the software companies, vendors, and MSPs that adopt a more intelligent, mature approach to collaborative deliverability.

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