March 12, 2009
Enterprises Looking For More Than Price In The Cloud
Amazon’s latest pricing changes might make its cloud computing services more palatable to some IT decision-makers within enterprises, but doesn’t address the fundamental concerns of business decision-makers who are still unwilling to leverage its radical new capabilities.
While reducing costs is a key driver of cloud computing and Software-as-a-Service (SaaS), trust is the most important reason why companies of all sizes decide to fully engage with a vendor. Trust is achieved by delivering the functionality you promise, but also by providing the support they need in case something goes wrong.
Until Amazon and other cloud computing vendors are able to provide this level of support, it will not be a key component of enterprises’ computing strategies.
Support is more than offering SLAs. Support means giving customers someone to contact or even call when there is a problem or they have a question.
In contrast, one of the primary reasons SaaS is gaining acceptance and experiencing growing adoption among enterprises, as well as small- and mid-size businesses (SMBs), is because the leading vendors have matured their support capabilities to satisfy business decision-makers along with their IT counterparts.
Some people use the SaaS and cloud computing terms interchangeably, and I agree that they share many of the same attributes and benefits. However, I continue to be concerned that uneducated IT/business decision-makers will reject SaaS offerings because of the inadequacies of the less mature cloud computing services.
I hope Amazon and other cloud computing vendors learn quickly that their mainstream acceptance will depend more on their support capabilities than their technical innovations.
I’m pleased to be serving as the first conference chairman of IDG World’s new CloudWorld industry forum where I look forward to bringing together a cross-section of customers and vendors to discuss these topics.
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Amazon does provide premium support services: http://aws.amazon.com/premiumsupport/
Mark DeSotto — March 12, 2009 @ 1:41 pm
Good point that enterprise buyers care about more than cost, and low-price alone won’t sell SaaS solutions or clouds services. Despite the fact that the application doesn’t run in their data center, IT executives are still concerned about support, security, integration, and configuration. SaaS marketers need to actively address these concerns.
Peter Cohen, SaaS Marketing Strategy Advisors — March 13, 2009 @ 10:06 am
Jeff, I could not agree more.
We are 10 years into our SaaS business. As you know, we serve education (k-12 and Higher Ed). Because of that, we have both the luxury and the challenge of only receiving 1 year contracts from our clietns due to the annual fiscal budget nature of our market.
I say “luxury” because this has forced us to build the service program and client orientation that it takes to achieve high (95%+) client retention. Our client services team answers the phone by the third ring and they even do outbound proactive calls to those clients who show signs of non utilzation.
we are very proud of our client services team who just won an international service award for customer service excellence (Stevie Award).
http://www.schooldude.com/news/2009/2/12/schooldudecom-awarded-top-honors-in-2009-stevie-awards-for-sales-customer-service/
Regards,
Lee
Lee Prevost — March 13, 2009 @ 3:22 pm
Rackspace’s new hybrid cloudservers cloud play seems interesting. You get the best of both worlds. Dedicated servers plus an enterprise cloud if you want. You think that helps with the trust issue?
James — March 16, 2009 @ 1:09 am