Cloud Deals for VARs Summer 2015 Trend | Gartner

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Cloud Deals for VARs Summer 2015 Trend | Gartner

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IT budgets may be shrinking some in 2015 according to survey research but not necessarily for a lack of deals.

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With budgets  shrinking in IT departments across the country, hosted solutions and cloud computing are becoming more popular as CIOs look for solutions with lower upfront cost. Expect cloud deals for VARs to be a competitive differentiator.

Overall IT spending in dollars will shrink by 1.3 percent in the United States by the end of 2015 after dramatic growth in the U.S. dollar value disrupted the market earlier in the year,according to recent research from Gartner.  As a result, VARs and consultants will find U.S. dollar margins shrink.

“The simple implication is that there will be price rises. However, there are many other market forces at work — protecting U.S. dollar profits will require a nuanced and multifaceted approach involving pricing, partners and product management,” John-David Lovelock, research vice president at Gartner.

In order to protect profits, consultants and IT services firms will be wise to seek partnerships in the SaaS and cloud markets in order to tap into recurring revenue streams and a higher volume of deals for the second half of 2015.

While software as a service does not bring in the larger fees that full-scale implementation deals offer, they provide shorter sales cycles, lower overhead on implementation and predictable influx of cash due to monthly subscription pricing.

Choosing partnerships wisely in the cloud space will help VARs establish multifaceted services and product offerings, while protecting their profit margins through 2016.