Business tends to follow the more efficient channel. Particularly when the core product is bits – as it is with software.

VARs and integrators must continuously swim upstream in the value rapids because technology commoditizes. This tends to happen over time but can be disrupted thanks to business model changes. Broadband networks and grid computing has made cloud computing viable. Hence, the Microsoft channel needs to leverage Azure to enhance their value – which is primarily at the top of the software stack.

Cloud computing is one of many forces commoditizing infrastructure. Open source has become a leading source for middleware. And, commercial middleware and software stacks have become more for less.

VARs who prosper from Azure will do so by recognizing that their value comes not from integrating SQLServer with Dynamics or setting up server farms. It comes from unique competencies in one or more niche markets.

As some in the channel struggle with the revenue model implications (how salespeople get paid, long-term revenue, need for improved support to get that revenue, commoditization of what was once charged), others will recognize that cloud computing facilitates geographic expansion within niche markets.