There’s Risk In Those Clouds, But Not For Customers!

There’s Risk In Those Clouds, But Not For Customers!

Don’t be lulled into a false belief that cloud computing is simply an evolution in customer technology consumption; it is nothing less than a transformational shift in the balance of power between buyers and sellers. Sales professionals that don’t understand this change and fail to adapt their prospect and customer engagement models accordingly will find themselves on the outside of a significant customer re-investment cycle wondering why their historical tried and true sales strategies and tactics are no longer effective. Cloud adoption is as much about redistribution of risk as it is about reducing the cost and complexity of technology.

Historically, “buyers” have absorbed the majority of the risk associated with their technology and/or application investments; projects were largely delivered on a time and materials basis, software was provided with “as-delivered” caveats and product demonstrations rarely resembled actual out-of-the-box user experiences. IT enabled projects consistently ran over budget and seldom delivered the business value that justified their initial funding.

Moreover, time and materials engagements became blank checks while fixed fee projects were assigned to maniacal project managers that squelched creativity and/or delivered a predictable stream of change orders. Software was as likely to cure on IT shelves for years as it was to be installed on servers; and through it all vendors generated double digit returns while customers experienced 65% IT project failure rates; and, most importantly, unrealized business cases.

The business community has been inundated with incremental requests for ever-expanding IT budgets to upgrade technology solution sets they seldom understood; held hostage by an IT community with risk-riddled arguments they found difficult to challenge. And after decades of broken promises the business and IT communities find themselves wary of each other and poorly aligned.

Enter the cloud:

  • trial engines provide comprehensive access to application capabilities PRIOR to engaging vendors in the procurement process
  • vertical applications are replacing horizontal solution sets
  • hardware/software/services costs are bundled together into easy to understand, predictable monthly subscription fees
  • new competitors offer infrastructure-free solution sets to prospects on a pay-as-you-go subscription basis
  • infrastructure headaches are replaced with penalty bearing SLAs
  • large capital outlays are replaced with monthly subscription fees
  • business cases move from long-term ROI to in-year payback
  • business buyers are replacing IT buyers

For decades, prospects and customers have begrudgingly complied with a “pay first, benefit later” value proposition and have been rewarded with failed projects and underwhelming ROI.

As technology solution sets increasingly become commodities the ability to switch from one supplier to another becomes dramatically easier; and the penalties and risks associated with making poor technology or application choices is diminished. Cloud computing has provided the buying community with the freedom of choice it has long yearned for, with project risk being clearly passed back to the vendor community; which brings us to the need to revisit our sales engagement approach.

Sales professionals that understand this fundamental shift in risk and control, and can articulate the benefits of that change in terms prospects understand will have a decided advantage over sales professionals that continue to promote traditional on-premise, pay and pray delivery models; which fundamentally increase resistance and undermine the unspoken promise of cloud computing.

And while there are short-term compensation and cash-flow impacts that both partner organizations and individual sales professionals must navigate; the price of resisting the inevitable transition to cloud is too great to ignore. Because while we can look at cloud computing and debate its technical and operational merits as well as the benefits of funding projects with op/ex vs. cap/ex budgets; at the end of the day we cannot ignore the underlying EMOTIONAL buying drivers that will accelerate cloud adoption. Let us not forget that buying is an emotional, not practical, process and that evidence is generally gathered to support conscious or unconscious predisposition or bias. From a prospect’s perspective, cloud migration is as much about regaining control as it is about saving money and reducing complexity.

For partners to successfully and profitably evolve their business practices and processes to service cloud customers they must revisit their current risk profile with an eye towards taking on a greater portion of risk moving forward, and sales professionals must re-evaluate their selling strategies to align with a radically different set of customer buying criteria. The cloud tide has begun to turn and sales organizations with an appetite for increased risk will find their messaging resonate deeply with a new breed of technology buyer.

About the Author

Mark Stuyt

Mark is an accomplished and expert 20 year veteran in the technology industry. His experience is wide and varied, having held Senior Channel and Direct Sales positions with Computer Associates, SAP, PeopleSoft and Pivotal Software, where he consistently distinguished himself as a top producer, both in terms of customer value and revenue generation.