“The cloud” has been the term du jour for the past 12-24 months. Software business people who’ve been using “it” as a technology delivery model for a while feel redeemed that the rest of the world finally sees its virtues; their IT colleagues are wondering what the big deal is since they’ve seen it before (“it was called application service providers — ASP”, they say); and those from outside of the software industry are still wondering what it is exactly…But they’re sure it’s a great idea.
This brief post is not about the cloud or the now-proven advantages it provides over premise-based models in the vast majority of cases. Neither is it about the virtues of a subscription-based payment/revenue model both for the vendor and for their customers. It’s about the fact that “Cloud Club“, the group of technology companies that delivers its products via the cloud, remains a somewhat exclusive cadre relative to the 90s’ big boys (most of whom initially rejected the cloud) such as Microsoft, Oracle, and Adobe which are only now starting to gain any sort of fractional traction. More importantly, however, it’s about the fact that Cloud Club members can no longer use “the cloud” as their only competitive advantage.
While having the majority of a vendor’s offerings delivered through the cloud is now considered essential, it’s not sufficient to win. In fact, it’s quite easy to position premise-based offerings as what we in the industry call the “faux cloud“: taking an offering that is not meant to be multi-tenant (see here for what that means) and in-sourcing the hosting and operations to give the impression of cloud. Admittedly, such an approach eventually brings companies to their knees as it’s nearly impossible to scale such a model cost-effectively for its customers.
Cloud Club members must not base their message on and place all of their competitive eggs in the “cloud basket”. The first rule of Cloud Club: don’t talk about it! I’m proud to say that my company, inContact, serves as a great example of this philosophy. Despite having the enviable ticker symbol of SAAS (see here if you’re not sure what that is) in addition to being a very early adopter of the cloud in a very comprehensive sense (offering its contact center solutions leveraging infrastructure-, platform-, software-, and even network-as-a-service) , it focuses its competitive advantage on the value proposition it provides its customers. Only a part of that advantage is the cloud delivery model. Does this mean one shouldn’t mention “the cloud” on their website? No, because a lot of people still need to be educated on what it means. But, in addition to being a proven cloud provider, a vendor must show its ability to impact its customers’ business needs as a reason to win its customers’ delight and retention.