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Welcome to Cloud Boulevard, a blog by JF van der Zwet
Getting To The Bottom Line

Getting to the bottom line

Getting to the bottom line

For systems integrators, value added resellers and distributors, there are significant benefits from the delivery of cloud computing to their customer base. Leveraging existing skills and systems, a consistent revenue stream and greater integration with customer business requirements are examples.

Not everything has an obvious benefit. For example, shifting customer revenue from big CAPEX purchases may mean lower discounts from hardware and software partners. However losses should be short-term loss only. Providing access to resources on demand and cloud-based services via subscriptions should replace any lost infrastructure revenue.

To succeed requires an underlying hardware, software and services platform on which to build a cloud solution. This is a major conundrum for many systems integrators – build, buy or rent.


Building a cloud infrastructure carries risk and expense. It requires facilities, hardware, software, a service layer and cloud business models. For larger SIs use of existing resources that they already own, such as managed data centre services, is an advantage.

The advantages of building a cloud are as much about defining the business as they are the opportunity. Key reasons for an SI to build include:

  • Control over the entire infrastructure making it energy- and management-efficient
  • Cost control through facility design and making best utilisation of the resources
  • Reinforcing partner relationships, especially in the facility and communications fields
  • Leveraging existing professional services business to take the experience of building a cloud platform out to customers why not find out more. Professional services are a key engagement opportunity and revenue stream
  • Creation of task specific or community clouds allowing the SI to focus on a niche market. This could be business- or community-centric


Buying an existing infrastructure and converting it is another option. There are a lot of second and third tier hosting providers renting rooms in existing facilities with large amounts of hardware and software. Many would like to move to cloud, but lack the right partner.

Moving them to a data centre that is cloud-ready and helping them install a cloud service layer on their existing environments would utilize their skills and enable the SI to gain valuable experience in cloud design.

There is a risk that the hardware is end-of-life or unable to reach the utilization rates that cloud and virtualization demand. There could also be contractual issues around the existing premises. These are risks that can resolved before taking this step.


Renting, in this context, is buying space on an existing cloud infrastructure and offering a virtualized service. The challenge is ensuring that there is enough control and stability across the platform.

There are examples of this working: IBM, HP and Microsoft are allowing key dealers to buy space to offer solutions for the SME market. IBM has deals with telecom partners such as A1 Telekom in Austria where IBM provides them the infrastructure for their public cloud offering.


The most likely decision for the majority of systems integrators will be to build their own cloud using the facilities provided by an experienced partner. This will ensure a solid, reliable foundation on which cloud solutions are built. It will allow the SI to focus on their skills such as IT management and integration of solutions while the facility provider focuses on power, cooling and infrastructure.

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