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Vivek Kundra has made a career out of disrupting the status quo in government adoption and implementation of technology. As the first chief information security officer of the United States, he compelled federal agencies to embrace cloud computing as a cost-savings mechanism. And, as he said at CA World yesterday, he believes the cloud will disrupt professional services in the channel.

On a panel moderated by former Facebook executive Randi Zuckerberg, who read questions submitted through a Twitter feed, Vivek was speaking about the benefits of cloud computing when he slipped in a statement about businesses and government agencies no longer needing to pay exorbitant fees to consultants and contractors (government-speak for channel partners).

“Signing a contract will not mean you’ll have to wait five years before you see the benefit,” Vivek said before audience of 5,000 attendees that included more than 1,600 solution providers. “It’s going to be a painful transition in the professional services space, and we’re already seeing it in government.”

Kundra, currently a visiting fellow at Harvard University, served as the first CIO of the U.S. government under President Obama. He is the architect of the government mandate for all federal agencies to adopt at least three cloud applications this year. And he is credited for shaving more than $3 billion from the government’s annual $80 billion IT budget.

On the panel that included CA Technologies CEO Bill McCracken and VCE chairman Michael Cappellas, Vivek extolled the benefits of cloud computing as a disruptive force that removes costs from the design, development and implementation of on-premise solutions.

“It’s going to move professional services to the higher order at the presentation and application layer. Engineer applications that more seamless and re-architect. It will change the billions of dollars to pay a consultant to tell you how much your IT sucks without new outcomes,” Vivek said.

The fellow panelists agreed that professional services, the mainstay of profitability among solution providers, will be transformed as the cloud automates and simplifies many of the lower value functions of building and maintaining IT infrastructures.

This positioning, the panelists agreed, means professional services will move up the value stack into engineering new systems and application development for cloud environments.

“For the reseller and distributor community, as we start to make the delivery of the basic layers, there’s a higher level of services that will come out. It forces the service catalog to move up. You should be able to make more margin because you’re moving up,” Cappellas said.

The panelists believe there’s a fundamental shift in the consumption of technology that will move IT departments and businesses away from projects that are based in the technology and toward the outcome and benefits produced by the technology. Cloud computing is simplifying that because it harnesses existing, prebuilt infrastructure and automation.

“So many projects were done because, at the end of the day, so many projects weren’t at the sweet spot of what businesses were trying to do,” Cappellas said.

While cloud computing is a disruptive force, McCracken said it won’t disintermediate the solution providers from the value change. Ultimately, the cloud will open new professional services opportunities that more closely resemble businesses-centric services.

Vivek’s position is the most pronounced of the three panelists. While it’s logical, painful doesn’t begin to describe the transformation solution provider organizations will have to undertake to participate in this future state. Solution providers will have to invest in training professionals in business services that are general and vertically aligned. They’ll have to start developing applications rather than just cobbling together hardware and software. And they’ll have to become innovators.

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Lawrence M. Walsh is CEO and president of The 2112 Group, a technology business advisory service that specializes in optimizing indirect channels and partner relationships. He’s also the executive director of the Channel Vanguard Council. He is the former publisher of Channel Insider and editor of VARBusiness Magazine. You can reach him at lmwalsh@the2112group.com.

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Larry Walsh: @lmwalsh2112 | Channelnomics: @channelnomics