Ground-to-Cloud: Enabling VARs to Cross the Chasm and Become Cloud Providers

While there are many examples of applications that live entirely in the cloud (SaaS), there are many more that live behind the firewall. An enterprise will always have a mix of cloud and ground (behind the firewall) applications.

Single sign-on (SSO) is a good example of having some ground and some cloud. While having Facebook as the SSO authority for other cloud apps works for consumers, enterprise customers will want to tie SSO into an enterprise authentication source such as Active Directory, LDAP or SAML.

The same analogy applies for storage. Despite the fact that cloud storage vendors are dropping prices on a regular basis in a race to the bottom, enterprise customers continue to use some cloud storage and some local storage. What data is sent to cloud storage and what data is kept locally is normally about speed of access – a much-needed requirement for the consumer of that data.

File Sync and Sharing is similar to storage where users behind the firewall want to access files locally and only use the cloud when sharing with external users or sync’ing between different storage systems at different sites.  The “ground side” of file sharing provides the fastest access times, reduces congestion to the Internet, and provides built-in business continuity.  The “cloud” side provides sharing with partners and remote team collaboration. 

Cloud Service and Recurring Revenue

Offering a cloud service to customers is lucrative however.  The recurring revenue model made possible by offering a monthly subscription service is enticing to resellers that want to smooth out the peaks and valleys of perpetual software licensing and hardware sales.  Assuming minimal churn, subscription revenue grows year over year and provides value well beyond the typical three-year perpetual license sales cycle.

Solutions like these that have one foot on-premise and one foot in the cloud are great solutions for VARs that want to become cloud providers or launch a cloud business.  Resellers often have trouble crossing the chasm from selling perpetual software licenses and hardware to implementing and selling a service.

Hybrid Approach: The Benefits

The hybrid approach to file sharing provides resellers with a bridge protecting their current infrastructure business from cloud-only solutions as well as providing them with the recurring revenue model that they are looking for by becoming a cloud business.  This ground-to-cloud hybrid approach enables VARs to protect and benefit from their existing on-premise storage business as well as use that VAR business to help them become a cloud provider.

The hybrid approach to file sharing also enables both VARs and service providers to differentiate their service offering from competitors that are offering one of the many cloud-only file sharing solutions on the market. 

The Best of Both Worlds

As VARs look to become cloud providers or add a cloud business to their portfolio, file sharing is one of those solutions that many companies are looking to implement as many consumer file sharing solutions have shown the value of simplifying file sharing, sync, access, and collaboration. 

VARs just need understand that it is possible to offer customers the best of both worlds:  the speed and security of accessing files behind the firewall combined with the flexibility and remote team collaboration of made possible by using the cloud or sync’ing storage with the cloud.  This, in turn, provides an opportunity to protect existing customers, leverage existing on-premise storage to create a cloud service, and provide a differentiated file sharing service.

Mort Jensen is Director of Channels at Egnyte, a provider of cloud-based file sharing and storage.