Synnex Targets SMB Cloud Adoption With CloudSolv Push

Synnex is hoping 2014 will be the year of the SMB cloud. During its Varnex 2014 Spring conference in Orlando, Fla., this week, much of the focus was on cloud opportunities and the distributor's own cloud automation marketplace, dubbed CloudSolv.

The CloudSolv platform was originally introduced in 2011 in the U.S., but it wasn't until this week that CloudSolv made its debut for Synnex Canada. After several years, Synnex officials believe that cloud in the SMB market is finally reaching critical mass, and the distributor believes it has the best way to aid solution providers in their jump to the cloud.

"We offer resellers preconfigured, preintegrated bundles of cloud services, and we can customize the bundles and give the resellers what they want," said Jon Allen, vice president of cloud at Synnex. "The idea is to build the right cloud ecosystem and to have the profitability optimization plan in place so that the resellers can make money in the cloud."

[Related: Synnex CEO: SMB VARs Need To Embrace Cloud, Recurring Revenue Opportunities ]

Currently, Synnex has approximately 50 cloud vendors within its CloudSolv marketplace, including top vendors such as Microsoft, Adobe, Symantec and IBM SoftLayer.

The cloud services cover a variety of solution areas from productivity and security to Infrastructure-as-a-Service (IaaS) and storage. Synnex, however, doesn't have plans to get into the cloud hosting business itself, unlike other distributors. For example, Ingram Micro recently announced it would begin offering cloud hosting services to solution providers from its own data centers.

Allen said Synnex prefers to play a behind-the-scenes role by assisting resellers with finding the right cloud vendor partners and solutions and providing consolidated billing services through the CloudSolv marketplace. "We pride ourselves on having the right model. We're like Oz. We're the guy behind the screen," Allen said.

In an effort to raise cloud awareness among its SMB resellers, Synnex is now tying in its CloudSolv services bundles with other offerings, from Chromebook for the education market to digital-signage solutions. Synnex said resellers will be able to configure those solution bundles right from the CloudSolv marketplace.

While interest in the cloud is extremely high, Allen said, the key now is to create actual cloud adoption within the SMB reseller channel. "We have traditional legacy VARs and we have born-in-the-cloud guys, and they are two different enablement models," he said.

Allen said that most CloudSolv customers are born-in-the-cloud guys, while many of the traditional resellers -- which make up the vast majority of Synnex's customer base -- have yet to make the leap into cloud. "They're kind of stuck, and they aren't sure where to go," he said. "We want to provide some direction [through CloudSolv]."

Varnex member Salvant Technologies of Cooper City, Fla., has already made the leap to the cloud. The company first began offering cloud solutions in 2011 before CloudSolv was first introduced. But Salvant CEO Carl-Henry Salvant said the platform is still a valuable service for his company.

"Even though we were working in the cloud before CloudSolv, it's been good for us because it reinforces what we're doing," Salvant said. "So even for the cloud services that we get direct from the vendor, [CloudSolv] shows us where the market is going, and which vendor services and solutions are in demand."

NEXT: Making The Leap To Cloud

As solution providers move from a traditional reseller model to a service-focused approach, a lot of business model and process changes need to take place, Allen said. Moving to recurring revenue streams can be difficult, especially when those models may not match up with how the vendors are offering cloud services.

"Here's what's unique about cloud -- most of our vendors sell cloud on a yearly basis, not a monthly basis," Allen said. "So that's an adjustment for the resellers too. You have to figure out what's right for your customers and also you as a business." Another challenge is cash flow, Allen said. Moving to a monthly recurring revenue model can reduce available cash since the cloud contracts are spaced out over many months and years.

Allen said Synnex has created cash flow "vehicles" for resellers to help them bridge the gap; for example, Synnex's Capital Reserve Program is designed to help onboard net new resellers with credit. "We tried to think through that transformation and what it would take from a financial perspective," Allen said.

In addition to promoting CloudSolv to resellers, Synnex is also hard at work on recruiting new cloud vendors to join CloudSolv. "About 25 percent of my job is recruitment," Allen said. "We do a lot of due diligence and vetting to make sure there will be traction and critical mass with that particular vendor. We want to make sure we can drive sales and go to market with that vendor."

Synnex also is seeing much more interest in two-tier distribution today from cloud vendors of all shapes and sizes. "I think some cloud vendors have struggled with scale," Allen said. "Two years ago, a lot of cloud vendors just wanted to go direct to resellers and didn't see the value in distribution. Today, that's changed. They see the value in two-tier distribution as a way to help them grow and scale."

And scaling up for cloud vendors, Allen said, is very different than scaling up for vendors selling hardware and software. Again, it's a different enablement model for most cloud solution providers, he said. Born-in-the-cloud companies aren't really resellers -- they're consultants. And many of them, Allen said, are focused on one cloud vendor, whether it's Google or Microsoft or Amazon. "That's obviously much different than traditional resellers. You don't see many resellers partnering with just one vendor," he said.

So the pool of potential solution providers tends to be smaller for cloud vendors, Allen said, because cloud-focused solution providers carry fewer vendor partners. As a result, smaller and more niche-focused cloud vendors need to increase their profile in the channel and get out in front of solution providers.

On the other end of the spectrum, Synnex also is working with existing CloudSolv customers to expose them to additional vendors and solutions areas in the cloud market. Allen said the four key areas Synnex focuses on are hosted email, Infrastructure-as-a-Service, disaster recovery and backup, and security.

"We hit on those areas to make sure the resellers, even the born-in-the-cloud guys, are diversifying," Allen said. "I'm not sure that going with a single cloud vendor is going to be sustainable in a few years. I think they're going to need to diversify and build out their solutions set."

During a cloud presentation Tuesday at the conference, Allen said Synnex is serious about its cloud strategy and challenged the Varnex community to start actively developing their own before it's too late. "What is your cloud strategy?" he asked the audience. "How will you build your cloud practice? And, most importantly, how can Synnex help?"

PUBLISHED APRIL 16, 2014