Adam Matuszak,

Buying from Cloud Resellers: Pros, Cons, and Market Trends

Businesses can access various cloud services and products by partnering with a cloud reseller. This article will discuss the advantages and disadvantages of buying from cloud resellers and the current trends in the cloud computing reseller marketplace.

Businesses can access various cloud services and products by partnering with a cloud reseller. This article will discuss the advantages and disadvantages of buying from cloud resellers and the current trends in the cloud computing reseller marketplace.

The global cloud computing industry is poised for exponential growth, with an expected increase from USD 270.15 billion in 2017 to USD 712.83 billion by 2025. That’s a remarkable compounded annual growth rate (CAGR) of 18.46% across the forecast period. It’s no surprise, then, that more and more businesses are leveraging the power of cloud technologies. Enterprises have various options to access cloud products and services. One such option is buying from cloud resellers.

What is a Cloud Reseller?

A cloud reseller is a third party that purchases cloud computing products and services from major providers such as AWS and Google. They then offer these services to their clients without investing in the infrastructure. They adjust and implement the purchase according to the needs of their end users. These resellers are typically third-party companies that sell cloud services to businesses and individuals.

Cloud resellers are value-added resellers (VARs) because they add value to their products and services. They also provide additional services on top of cloud hosting, such as cloud migration, integration, security, and ongoing management and support.

Cloud resellers play a pivotal role in the digital infrastructure economy by serving as intermediaries between major cloud service providers and businesses that need these services. Leveraging their unique position, these resellers often buy cloud services in bulk from providers at discounted rates, creating a win-win situation.

This bulk buying allows them to avail of significant discounts, which they can then pass on to their clients, thereby providing cost-effective solutions. When businesses purchase cloud services through these resellers, they not only can get these services at a lower cost but also benefit from the added value of the resellers’ expertise in cloud management and configuration. This buying and selling model has helped to democratize access to high-end cloud services, making them more affordable and accessible to a broader range of businesses.

Pros of Buying from Cloud Resellers

There are several advantages of purchasing cloud services through a reseller rather than directly from the cloud service provider, including:

Simplification of Vendor Management

Cloud resellers allow businesses to purchase and manage their cloud services through a single point of contact. This approach minimizes the complexities involved in procuring cloud services from different vendors. By buying with a single cloud reseller, businesses can obtain greater understanding and control over their cloud services, leading to more streamlined operations and cost savings in the long run.

Consolidation of IT Spend

Analysts and consultants expect IT buyers to increase public cloud spending on applications and infrastructure into 2023. Consolidating IT spending through a single cloud reseller can help businesses utilize economies of scale. Buying from a cloud reseller means replacing multiple tools, software and services a company uses with a single solution provided by the reseller.

Access to Expertise and Support

Resellers often have in-depth knowledge of the products they sell and can provide tailored advice and support. They can help businesses find the most suitable products, handle migration and integration, and provide ongoing support and management. For example, in migration projects, cloud resellers can offer expertise focused on the best practices for moving data and applications to the cloud. They can provide training, security, and compliance advice.

Co-sell Opportunities and Synergies

Cloud resellers also offer co-selling opportunities, allowing companies to benefit from their relationships and resell with other vendors. This opens up new channels for businesses to expand and explore, enabling them to reach more customers and grow their revenue. In addition, resellers can provide added value by offering bundled solutions to combine multiple services into a single package.

Cons of Buying from a Cloud Reseller

Let’s take a look at some of the drawbacks that come with buying cloud services from resellers.

Potential for Higher Costs

Resellers provide extra benefits such as services and support, for instance, but these may come at a higher cost when compared to managing cloud services in-house. This could make certain services more expensive for businesses, causing them to look for cheaper alternatives.

Limited Customization

Cloud resellers may offer pre-packaged solutions that have limited customization options. Businesses with unique requirements may find it challenging to tailor cloud services to their specific needs.

Dependency on Resellers

When buying from cloud resellers, businesses depend on them for ongoing support and management. This dependency may restrict their flexibility to switch providers or negotiate directly with cloud service vendors in the future.

Market Trends in Cloud Reselling

Buying from Cloud Resellers: Pros, Cons, and Market Trends

The market for cloud reselling is constantly evolving. Staying aware of the latest trends is crucial for businesses looking to engage with cloud resellers. Here are some notable market trends in cloud reselling:

  • Multi-Cloud Reselling: Businesses increasingly adopt a multi-cloud strategy, leveraging services from multiple cloud providers. This trend drives the desire for flexibility, redundancy, and the ability to choose the best-fit solutions for different business needs. Cloud resellers play a vital role in facilitating the integration and management of diverse cloud environments.
  • Vertical-Specific Reselling: Resellers focus on specific industry verticals and tailor their services to meet the needs of businesses in those sectors. By developing industry-specific expertise, resellers can provide specialized solutions, address industry-specific challenges, and cater to different sectors’ regulatory and compliance requirements.
  • Managed Services and Value-Added Offerings: Cloud resellers are expanding their service portfolios beyond cloud infrastructure provisioning. They increasingly offer managed services such as monitoring, optimization, security, and compliance management. Resellers differentiate themselves by providing value-added services that enhance the overall cloud experience for businesses.
  • Hybrid and Edge Computing Solutions: With the rise of hybrid and edge computing models, cloud resellers are adapting their offerings to meet these evolving requirements. They provide solutions that seamlessly integrate on-premises infrastructure with public and private cloud environments, enabling businesses to optimize performance, data processing, and latency-sensitive applications.
  • Focus on Cost Optimization and ROI: As cloud adoption matures, enterprises are becoming more cost-conscious and seeking ways to optimize their cloud spend. Cloud resellers are responding to this trend by offering cost optimization services, helping companies to identify areas of inefficiency, and recommending strategies to achieve a better return on investment (ROI) from their cloud investments.
  • Artificial Intelligence (AI) and Machine Learning (ML): Cloud reselling solutions are incorporating AI and ML technologies at an increasing rate, improving their capabilities to meet current demands. Resellers are leveraging these technologies to enhance performance, automate processes, and provide intelligent insights to businesses. AI-driven analytics and recommendations enable enterprises to make data-driven decisions and optimize their cloud infrastructure.

The Cloud Reseller Market: An Emerging Powerhouse

Clouds are raking it in more with every passing year. In 2021, transactions estimated to be worth $4 billion witnessed a 70% increase, thrice as fast as the growth of public clouds. As the cloud reseller market matures, organizations should consider the implications of buying from a reseller instead of going directly to the provider.

For organizations already invested in cloud resellers, understanding their long-term value and impact on business strategy is critical to success. This will help ensure the organization makes informed decisions about leveraging the cloud reseller market as it evolves.

Ultimately, taking advantage of the growing cloud reseller market can benefit organizations looking to maximize the value of their investments. From cost savings to increased agility and responsiveness, cloud resellers offer a range of benefits that can help organizations achieve their goals faster. Additionally, cloud resellers provide access to specialized expertise and resources that may be outside the scope of an organization’s internal capabilities.

If you need help navigating the cloud reseller market, it pays to partner with an experienced provider who understands your unique needs and objectives. Contact us today to learn more about how our team of experts can help you make the most informed decisions when it comes to leveraging the cloud reseller market.

Behind F33
Greg Bigos, CEO

Greg Bigos is the CEO of F33, bringing over decades of experience in delivering ERP solutions for manufacturing, logistics, and retail industries.

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Behind F33
Wit Jakuczun, CTO

Wit Jakuczun is the CTO/Chief Data Science Officer at F33 with a PhD in Applied Mathematics and over 18 years of experience in mathematical modeling, data analysis, and simulations.

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