Perhaps this simple reframing of how you think about your product through the eyes of your customers will help.
This is an excerpt from our new book “Thinking of migrating to the cloud? Ask the Smart Questions” which is out in the fall.
Simple decision, right?
As every new software vendor “in the cloud” it would seem that migrating from on-premise to the cloud is the obvious answer. But it is not so clear cut
- Try before you buy; in the time it normally take to write a requirements spec, run a beauty parade and make a decision clients than run a real life, low risk trial.
- Speed of installation (not implementation): the software can be rolled out to different “locations” (geographical, organizational; internal and 3rd parties, working style; office, home-office, mobile) rapidly
- No upgrades; everyone immediately has access to the latest version of the software – although this may be considered a disadvantage if customized training has been developed.
- RBI, not ROI: rapid, tightly focused implementations mean that the benefits can often be delivered before the software has been paid for (Return Before Investment). So the projects are self-funding.
- No need for IT input; rather than completely side-stepping IT, the projects need only a light touch from IT, which the IT department should see as a benefit. It is helping them deliver the “app gap”
- Easier sale to business – you can reduce the sales cycle from months to days or weeks through low risk, pilot projects. And these are an easy way to get a foot in the door.
- Rolling out updates / out of date software – You know every client is on the latest version of the software. And there is virtually no cost to rolling out the changes that encourages small incremental updates.
- Geographical reach – Subject to local country restrictions on data center location, you can roll-out to much of the world without having to establish local operations.
- Lean startup approach to roadmap – With incremental releases you can start with a smaller functionality set and let customer demand help shape the roadmap, rather than invest heavily to produce a “full featured” product and hope it hits the mark.
- Metrics to see behavior – How are your clients using your software. With on-premise you never knew. Now you can see hour by hour, client by client. Which means you can coach them, hence the rise of the Customer Success teams within cloud vendors.
- Annuity revenue stream – Over time you can build a strong, dependable, annuity revenue stream. This is valuable asset and has a key impact on the high valuations of established cloud
But not all good news; downsides for vendor of cloud delivery
Cloud is not all honey and roses. There are inevitably downsides, especially when compared with the incredible lucrative on-premise software business. There are downside for clients, but let’s just focus on you, the vendor. Let’s pick up a few of the issues. Interestingly they all relate to business model and money.
- No upfront large license deals – You are used to large one-off license deals which would fund the growth of the business. Annuity revenue stream
- Really tight margins – Clients are expecting lower per user costs than on-premise software. This is in part by the born-in-the-cloud startups who are entering the market with none of the overhead and funding to allow them to buy market share.
- Sell deal, then drive consumption – If you going after big enterprise sales then you do all the pre-sales work, the procurement win the deal but the initial order is cents, not millions of dollars. You need to work with the client to drive awareness, support projects and drive the roll-out – for 1, 2, 3 years – before the revenues really start to flow.
- Engaging top enterprise salesmen – If you are a top enterprise salesman you are used to doing big deals and getting big commission checks. Waiting 3 years will not turn them on.
- Cannibalization on migration – If you want your existing clients to migrate they will take a hard look at the users who are really using the software and the annual cloud license fees are likely to be less than the on-premise annual maintenance fees that they are happily paying each year.
Cloud, social, mobile and big data are enabling new entrants in virtually every industry to disrupt the incumbents. “Being Ubered” was the popular term, but based on Uber’s recent behaviour, “being Ubered” is starting to mean something entirely different!! Gartner has called it the Nexus of Forces. Forrester calls it Digital Disruption. IDC calls it the 3rd platform (the 1st being the mainframe, 2nd was client-server). Whatever you call it, it is coming to an industry near you. If you are in the music, film or print industry it has already hit you. But no industry is safe.
Company after company in industry after industry is struggling to respond to the competition from small agile startups who do not have the baggage of legacy infrastructure, organisation and supply chains. And their customers do not seem to mind giving (some of) their business to an unheard startup who can offer a great customer experience at a compelling price point. And as many startups are geared to be able to scale quickly – because the heart of their business is digital – they are able to take more and more business away from the market leaders as they prove themselves in the market.
Customer experience #fail
If the existing companies were delivering exceptional customer service then the startups would not have a chance. But they are not. The incumbents are difficult to do business with and are slow to embrace the new digital world. This is not because they don’t recognised the new demands or know what needs to be done to change. It is just that they don’t want to change. They are hooked on their current profitable model. So why go through the pain and anguish that transformative change requires? And more importantly, when is the time when they REALLY need to change. Things aren’t that bad. In fact things are still going well. So when is the tipping point? This is beautifully described by Charles Handy in his Sigmoid Curve. This is described in this blog.
Companies are being disrupted. Their vendors are being disrupted. But there is another group of far smaller companies that are also being disrupted. The partners of the vendors; in the world of tech that is the ISVs, resellers and implementation consultants. Their world is being turned upside down. They are the bridge between the customer and vendors, both of whom are trying to make sense of this new world.
Partners – a critical resource or collateral damage?
But partners are looking to their vendor’s partner programs for help. Currently the partner programs are lagging behind the change curve – for all the Sigmoid Curve reasons. But for many (most?) vendors, partners are a critical resource for revenue and delivery. So a high priority MUST be to rethink and reengineer their partner program; What sort of partners are required? How can the partner program help them be successful? How do you do all this at scale?
This was the subject of a long discussion I facilitated at the IDC Channels Summit. It was attended by the leaders of channel and partner programs from the largest IT vendors in the world. It was a very uncomfortable afternoon for some. Many had their heads in their hands at some point. Revolution, not evolution is required. You cannot evolve across an discontinuity. Evolution is not a step change. And this is what is required for most of their programs. And their partners are bleeding to death- it is just that some of them don’t realize yet. They don’t have the cash flow or reserves to do this alone. They desperately need help.
Microsoft’s 7 years of pain
Interestingly, I was on Microsoft’s WorldWide Partner Advisory Council from 2007-2011 for their cloud strategy. It was a very painful time. Transforming Microsoft’s 70,000 employees and 600,000 partners to embrace and exploit the cloud was, and still is, incredibly hard. In fact Microsoft has taken a lot of flak by the press and analysts for their mis-steps over the last 7 years. But they have kept at it and have emerged with a great set of cloud offerings and one of the best partner programs in the industry. It has taken 7 years and a pile of cash. Which is pretty scary for some vendors who are ONLY JUST starting to invest in it seriously.
Back in 2008 I was on stage at Microsoft’s World Partner Conference. My key message from the keynote was “The (cloud) train is leaving. You need to be on it”. It seems that none of the attendees of last week’s IDC Summit were in the 12,000 person audience. They know they need to get on the train, but there will need to be a lot of running to catch it. Better get going.
We have spam filters on email and WordPress does a good job of eliminating much of the worst. But still some gets through.But you have to wonder exactly what they think they are achieving when you get comments like this:
Paragraph writing is also a excitement, if you be acquainted with afterward you can write if not it is difficult to write
Hi Dear, are you in fact visiting this site daily, if so afterward you will without doubt take nice knowledge.
or this classic
Display on towards all of the tragedy of hard for that cause of your levels
I cannot believe this is the work of some automated robot, but it is the appalling lack of English and business acumen of someone with a keyboard and an internet account. And clearly more time than sense.
The internet is a wonderful thing, and it warms my heart to know that my blog is read and appreciated by people like this. To the other 80,000 visitors – thank you for visiting – even if you are automated robots phishing for email addresses.
The Event Production Show, which kicks off today at Olympia in London, is the exhibition for exhibitors, so you’d expect it to be at the cutting edge of event technology. But this is a world first.
“Can I scan your badge, Sir?” Doh!!
Traditionally the “badge and lead retrieval” systems provided by the event organisers are stuck in the dark ages. It is normally a bar code on a plastic badge and then each exhibitor has to rent a bar code scanner. When a delegate wanders onto a stand, their barcode is scanned and if any notes are taken they are laboriously pecked out on the miniature keyboard. At the end of each day they return the barcode reader to the event organizer to get the leads off it. Whilst this is a profit center for the event organizer it is a horrible experience for the delegate and exhibitor, and labor intensive for the event organizer. Don’t want to pay? No problem. The alternative is paper.
Result; Unprofessional, inaccurate lead information, poorly followed up leads, wasted paper. An expensive way to waste 2 days standing around. And no way of quantifying the benefit.
“80% of leads gathered at a show are not followed up.” -Center for Exhibition Industry Research (ceir.org)
Which is why the Event Production Show has embraced the latest technologies.
As delegates arrive they have their badge printed with a QR code that encodes their name, company, job title and a host of other information. No wasted badges for no shows, or handwritten ones for walk-ups. Before the show starts, exhibitors can download and install Marketpoint Tradeshow iPad app. They can create a centralized set of customized questions for their show workers. When a delegate walks onto the stand a show worker scans the QR code on the badge with the camera. The app interprets the data and creates a lead record and then steps through the pre-defined questions. Once finished the record is sync’d to the cloud and is shared with the other iPads on the stand.
What is even more powerful is that the app can also hold marketing brochures as PDFs which can be presented to the delegate and then emailed directly from the app to the delegate. This eliminates printing brochures, flyers and datasheets that will never be read and that often fill the waste bins outside Olympia, or are junked after the show.
Finally, there are some great analytics that can be gleaned from the app as it syncs data from all the iPads on the stand; busiest times on the stand, most popular marketing materials, most effective person on the stand…..
Result: effective lead follow up and a true assessment of the effectiveness of the show
Overkill – we only have 3 people working our stand
Now most of the stands at the Event Production Show have fewer than 10 show workers so some of these analytics may seem overkill. But some of Marketpoint’s customers, such as Caterpillar, have shows where they have over 100 staff working the stand for 5 days. For them the analytics are gold dust.
No matter what the size of the exhibition or the exhibitor’s stand, leveraging the QR code technology with the Marketpoint Tradeshow iPad lead retrieval system is just a better way. Cleaner, slicker and more professional.
Welcome to the future of exhibitions.
I bumped into this fantastic video by Google who shows the online checkout experience in real life. How many websites have you visited buying Christmas presents that are this bad. Your answer is probably “most”.
Web designers seem to forget 2 things:
1. Their job is to remove as much friction from the process as possible
2. Customers can and will go elsewhere.
Sit back and enjoy:
Exactly 2 years today I wrote an article having got my new iPad. Is it really only 2 years ago th iPad was released!! It was called “Who wants my iPad”
In summary, the article highlighted the key weaknesses of tablets.
“At work I am a ‘power user’. I write books and white papers, I give presentations, I tweet and blog So the bluetooth keyboard has made like immeasurably better. But I cannot review and update that MSWord document I was emailed. I cannot quickly develop a presentation pulling pictures from my huge library of images.”
The iPad experience had made me realise what I REALLY, REALLY wanted.
“Tablet 3.0 : It is a tablet with the same form function as the iPad with a high-definition touch screen that rotates. But one with a ‘proper’ OS so I can run business apps, a large solid state hard disk, a couple of USB ports, a separate bluetooth keyboard and mouse, …. oh and a battery life of 8+ hours.”
At the Gartner Symposium, I stopped by the IT Expo and the Samsung stand. And they showed me a Tablet 3.0. It looks like a laptop, but the keyboard is detachable and it operates like a tablet, but running Windows8.
The key question “Is this too late?” or maybe this is Microsoft’s chance to leapfrog Apple and their hold over the business-oriented iPad users. It maybe for many users. Sadly it is too late. I have left Microsoft and gone to the dark side. I LOVE my Macbook Air.