By Anton Herbst – Cloud computing is no longer novel. Most leaders and owners at small and medium businesses (SMBs) use at least some cloud services in their day-to-day business, whether it’s their software-as-a-service (SaaS) productivity application suite, the platform that runs their ecommerce website, or the backup-as-a-service solution they use for disaster recovery and planning.
But this represents just the start of a cloud computing revolution that promises to transform how SMBs operate. Today, many SMBs are still thinking about the cloud as a way to acquire technology or a product. Tomorrow, however, they will understand the cloud as the platform on which they will build their operating models of the future.
The reason that the cloud is so radical is that it enables anyone to compete in the major leagues, provided they have the right skills, mindset, and ideas. Where a lot of businesses were in the past precluded from the best technology by lack of capital, the cloud enables businesses of all sizes to benefit from digitalisation.
Solving business problems
Even more importantly, we’re seeing the cloud evolve beyond packaging infrastructure solutions (like platform or infrastructure as a service) and products (like SaaS). The next wave in the cloud is all about solving business problems. Think about how something like Apple Maps or Google Maps solves the navigation challenge in our daily lives. We barely give the tech a second thought.
That’s where cloud services are going—rather than presenting customers with a set of technology building blocks, they will give SMBs solutions for their challenges and enablers for their opportunities. This will enable SMBs to sharpen their competitive edge, move beyond industrial-age business models and take full advantage of the possibilities of the digital economy.
And that’s not just about streamlining and digitising processes, products and business models that exist today. As a survey from McKinsey shows, businesses around the world no longer think that today’s products and services will be sufficient for addressing disruptions and meeting a sustainable future. Some 62% of respondents are prioritizing new-business building to generate new revenue streams.
The cloud and as-a-service is essential for any company that wants to rapidly launch a new business or a radical product. They offer a capital-light way for a business to move from ideation to testing and prototyping to launching a new offer—dramatically accelerating time to market, reducing risk and increasing agility.
The composable business
The cloud is also essential for creating operating models that are flexible and resilient enough to navigate the disruptive changes we face in a world unsettled by technology change, extreme weather, economic uncertainty and the aftermath of the pandemic. Gartner talks about the idea of a composable business that can rapidly adjust course in a volatile world.
Such a business uses modular digital technology to mix and match business functions to orchestrate the proper outcomes. An operating model based on composability supports a business that can sense when change needs to happen; and then uses autonomous business units to respond with speed and creativity. Again, this is where the cloud shines.
For distributors and resellers, the shift to this model of IT services is both frightening and ripe with promise. In this ecosystem, we sit between the hyperscale providers that offer public cloud services and the SMBs that consume them. Increasingly, we find ourselves competing with everyone from banks to telcos to bigtech platforms to serve the mid-market customer.
The old transactional model—a linear value chain where vendors passed their products through distributors that in turn sold on to resellers—no longer works. To survive and thrive, we can no longer simply add a margin before selling product to the end-user company. We need to demonstrate how we can add value.
Future-facing ecosystems
We believe that this value will come from creating an ecosystem that collaborates closely to understand what the client needs, and then provides the solution. A cloud aggregator and enabler like Tarsus On Demand would play the role of pulling together solution providers that can deliver business outcomes to the end-user.
Building this business model is far from simple, and the challenge is compounded by the need to move fast to remain relevant in a changing world. Yet we believe that the channel still has an essential role to play in supporting SMBs. What we need to do is listen, understand their problems, build solutions and aggregate them to support SMBs’ digital transformations.
SMBs still need partners—but they will not settle for a transactional relationship that adds no value. Channel partners that aggregate and orchestrate cloud services and help SMBs to reduce technical and operational complexity can differentiate themselves in this environment. The ultimate goal? Make the technology melt away into the background so that the customer can focus on their business outcomes.
Anton Herbst is the CEO of Tarsus On Demand