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back to article Insight CEO: Everything that's cloudy is GOLD

A "sickness" at the core of the IT channel - an over reliance on back-end-loaded vendor rebates - threatens to render many tech suppliers irrelevant. But there is a cure, it is fluffy, white and called the cloud. Or so says Wolfgang Ebermann, the EMEA president at Insight, who after 23 years at Microsoft in various senior …

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  1. BillG
    Happy

    Everything that's cloudy is GOLD

    A nice play om the poem "Nature's first green is Gold".

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  2. Anonymous Coward
    Anonymous Coward

    I printed out the quote:

    "This industry is at a tipping point. When you talk to the CEO and CFO and ask if IT is a must have, everybody would agree, but if you ask a second question 'do you see IT as a strategic asset or a cost factor today?’ the perception is cost."

    And put it up at my desk. I work in the same industry and have dealt with modeling profitability around backend rebates for years. It is an utterly backwards business model. I understand why it happens though.

    The vendors (HP, Cisco, etc) want to maintain the premium pricing in the industry. They know if the cost was the cost, everyone would price battle down to within a basis point of their life to win the deal. They're trying to maintain a set level of profitability in the industry, so that their "channel partners" can afford to hire quality talent. This talent is what delivers the vendor's value prop to the end user, so it is important to them.

    At the same time, they are under immense pressure from Wall Street to perform. When they fail on that end, an easy band aid is to cut rebates to their channel partners. The vendors forget why these rebates are important.

    That situation needs to come to a reckoning. Either it will collapse or the vendors will have to recognize the value in those rebates and stop cutting into them. Cloud will eventually go the same way when it isn't shiny and new anymore.

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  3. Anonymous Coward
    Anonymous Coward

    CLOUD = lucrative to the reseller but costly to the customer...

    Ebermann is a typical Microsofty, hell bent on his own pocket. Despite the countless publicity stunts and one-sided financial models used to entice businesses away from on-premise to the cloud, 80% of businesses are still astute enough to see through the cloud facade. OK, it brings more profits to the distributor/reseller but let's not kid ourselves by suggesting that customers are always better off. Putting aside the on-going security issues, which will always be there to a certain degree, subscription/rented models are more expensive (FACT) in the long run and you also have to now consider the growing secondary software markets that offer residual values for non-cloud products. The reality is that businesses are under considerable pressure from the vendors to move to the cloud but have been resisting - WHY? Because they are not that stupid.

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