Magirus and Colt partner for cloud delivery

Pan-European distie Magirus and telco Colt have signed an agreement to extend Colt’s cloud offering to 6000 channel partners across the region. In a first for both companies, the deal will provide infrastructure as a service (IAAS) based on the VMware vCloud architecture.

Magirus, a major VMware, Cisco and EMC distie, will handle the channel recruitment, management and engagement support with Colt looking after service delivery from its 19 datacentres.

Colt has grown its telco business organically over the last two decades to hit revenues of around 1.5bn Euros for 2010, “but our ability to grow these revenues indirectly has been challenging us,” explains Gary Moore, Colt European partner director, “We have been fine with selling simple co-lo... but the more challenging IT services have been limited by the bandwidth of our own internal [professional services]”

Colt is no stranger to the channel and sells around two thirds of its connectivity business via 600 existing channel partners although relativity few of these are system integrators. Moore admits that it is not geared up to engage with thousands of partners that could potentially sign up for its vCloud offering.

“You can justify professional services for the larger [customers], but the need does not diminish in the midmarket… in particular with the vCloud, it became clear to us, if we wanted to grow that quickly we need access to resellers across Europe.”

The deal is aimed at mid-market customers that are keen to exploit the potential economies of scale offered by a “vanilla” cloud to deliver applications. Colt offering is essentially unmanaged and Moore believes elements like helpdesk, bespoke billing and adaptations will the added by the channel with Magirus providing that “next level of technical in the presales and strategy piece”.

However, the deal is not exclusive with Colt hinting that it may add additional distributors to reach a wider audience. Magirus states that the deal is its initial foray into cloud and that additional layers could also potentially follow. “This is a series of steps for both parties, this is an initial step which we hope will grow into a wider cloud offering,” explains Andrew Binding, VP of sales for Northern region at Magirus (pictured).

Binding feels that cloud via distribution is in a learning curve at the moment. In his view the Magirus model of an IAAS play compliments its existing switch, storage and server business. “There is a risk in jumping straight into providing  what you believe to be the correct software as a service to your partners as that is effectively value that they could build upon in their own offering,” he comments.

In an oblique reference to rivals such as Computerlinks and Ingram who have chosen a more SaaS aggregation model, Binding says, “the danger of having the distribution layer make that major investment to build their own managed service solution means they are directly competing with their resellers.”

The initial offering will focus on virtualised servers and connectivity as well as storage as a service product. Colt will actively push resellers to deal direct to Magirus instead. However, Moore believes that a few of its existing 600 partners that take its connectivity portfolio that have proven VMware skills could potentially work directly with the firm.

 ChannelPro comment:

In the view of both executives, this appears to first cloud deal between a major carrier and a large scale distributor.  And it is clear that Colt has its “ears open” to further agreements around getting its vCloud into the hands of more resellers. This first deal is aimed at the mid-market with both companies testing the water.  Candidly, what Magirus brings to the table is trusted brand and reach. These two qualities should not be under estimated in a channel environment that is still wary of the cloud.

On paper, Colt/Magirus are a good fit. Their mutual family of VMware, EMC and Cisco  also binds them together. All paper from the channel will be handled by Magirus and the branding will emphasise the Colt network which is pretty trusted in the enterprise market. Expect to see a few more top tier telcos looking to partner with distribution with this deal notable as the one that set the ball rolling.