Cloud platforms – the future of IT distribution?

By Corrado Ariano, AMR International

Within AMR’s IT Services team, we believe that cloud platforms will play a pivotal role in IT distribution in the next five years. This is because we’re seeing increasing investment in this area from legacy and born-in-the-cloud distributors, from resellers, venture capital and private equity.  But why the interest?

Demand for cloud platforms set to grow

Cloud distribution platforms enable service providers, whether Managed Service Providers (MSPs), Value Added Resellers (VARs) or System Integrators (SIs), to procure tech “directly” from vendors.

Although the penetration of cloud distribution platforms is relatively low, uptake is expected to accelerate as vendors continue to migrate towards cloud-based tech. Also, end-user adoption of SaaS models is increasing and platforms are becoming far more sophisticated (and commoditised), delivering on their promise of streamlined provisioning.

Cloud platforms – the benefits

The benefit is to streamline provisioning, but other value-add functions include: product bundling, consolidated invoicing, end-user billing, licensing and subscription management, as well as customer dashboarding.

  1. Streamlined distribution of IT – provide easier connections between vendors and service providers
  2. Automation of manual functions (e.g. billing, bundling) – deliver time savings and efficiencies for service providers
  3. Enhanced service quality to end customers – can boost access to vendor tech stacks and customisation

Different types of cloud platform players

Cloud distribution platforms can be distinguished by origin – created by legacy distributors (e.g. ArrowSphere) vs born-in-the-cloud ecosystem (e.g. Pax8). While the former are designed relying on hardware solutions, the latter have all their business systems hosted in the public cloud (IaaS, PaaS or SaaS).

Legacy-created vs born-in-the-cloud (BiC) platforms: CloudBlue and Pax8

Developed by Ingram Micro, CloudBlue is an example of a legacy-created platform. It provides MSPs with a full suite of functionalities to automate manual activities, such as bundling vendor tech stacks, creating quotes and billing end customers.
Pax8 is a BiC platform, the subject of a recent backing by American Venture Capitals Sageview Capital and Catalyst Investors. It offers leading Professional Services Automation (PSA) tools to streamline the management of IT services.

So what?

All this tells us that cloud platforms are growing in significance as service providers look for ways to reduce the complexity of IT distribution. We’ll be watching this space closely as more investments come to market.

If you’d like to know more, please get in touch with:  Corrado Ariano or AMR Partner, Florent Jarry

About AMR International

AMR International is a boutique strategy consultancy with a 30-year track, specialising in Technology, Information, Media, and Events. Within IT Services & Cybersecurity, our work is primarily focused on transaction support and growth strategy. We work with companies across the full spectrum of IT Services including vendors, distributors, VARs, system integrators, managed providers, service providers, and more. We are deal-size and geography agnostic.