Blog #2 of a 6 part series on The Future of the VAR, by Luke Norris – CEO and Founder of cloud provider, Peak (getcloud@ powered by peak .com) OCTOBER 23, 2013
Business needs change, technology evolves. In the capex model, IT is forced to anticipate business needs three to five years into the future and make capital investments in currently available hardware and software to meet the highest watermark of future demand. In the opex model (ie., cloud services), flexibility is the name of the game. The enterprise can buy capacity at a much lower watermark and incrementally scale as business and application needs change.
Cloud services liberate IT from legacy hardware platforms when the upgrade
cost is too high, or the equipment runs a legacy application with no good alternatives. In addition, at the rate that manufacturers are making hardware advances, the average refresh cycle is now just four years before a server is considered obsolete. Procuring infrastructure as a service instead of as hard assets allows IT to focus on adding value to the business rather than cost.
That’s why VAR customers demand cloud services. They want the cost savings inherent in a pay-as-you-go model and the agility that can only be achieved when infrastructure is available on-demand. VARs that stubbornly stick to their traditional one-off sales will soon find themselves left far behind in this new era. On the other hand, VARs that take bold strides toward the cloud services model will realize outstanding profit and growth potential.