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Our Business Is Innovation, and Business Is Good

Art WittmannThe cloud means business. That’s the tagline for our fall Cloud Partners show — and that bit of cleverness was mine. You’re impressed, right? Wait, what? You aren’t impressed? You already know that the cloud means business? Of course you do, mostly …

Here’s my bet: On some level you don’t know it, or don’t believe it, or don’t necessarily agree that the cloud means business right now, even if you can see that, eventually, lots of information and communications services will come from the cloud. On the flip side, I certainly accept some skepticism. Every guy who’s ever thrown an industry event is going to try to tell you that right now is the inflection point for the event’s central theme. Right now is when you need to get serious about this stuff (whatever the “stuff” might be). So at the risk of sounding like every other guy who’s ever thrown an industry event, let me take this opportunity to convince you that the cloud does indeed mean business, in a way it didn’t even just year ago.

First of all, for you skeptics who just want to take a hockey stick to anyone who claims, “The cloud is it — forget everything else!” I don’t blame you at all. The cloud is not everything, and won’t be for at least a decade. Forrester numbers have the worldwide cloud market at under $200 billion, while pegging overall IT spend at more than $2 trillion. So while $200 billion is nothing to sneeze at, it’s still less than 10 percent of the overall business technology market. We’re closer to the beginning of cloud dominance than we are to the end. (Of course, a significant chunk of that $2 trillion is being spent by cloud providers. IBM alone has dropped about $11 billion in the past 18 months or so, between its SoftLayer acquisition, cloud data center expansions and acquisitions, and PaaS development. So there’s that.)

But in the same way that I’d rather focus on selling electric and hybrid cars, even though they’re a small fraction of the market, I’d also rather be selling cloud services. That space will yield annual double-digit growth for as far as I’d care to predict, and getting in with the early adopters is an excellent way to get yourself on a ramp to sustained success as the transition to information and communications services takes place.

But if your curmudgeon force is strong and you want to forego cloud and hold on to the traditional IT and telecom market, growth there will be closer to 4 percent or so for the next few years. Enjoy it.

Service Improvement, Not Replacement

So why is now the time to get serious? Why should the cloud mean business to you? One sign that I like to look for when attempting to spot a new technology tipping point is a leapfrog over the verbatim replacement of last-generation technologies with the new one. So, for instance, if you thought about replacing an on-premises CRM system with Salesforce, a previous driving factor might have been to get more complete access for your distributed sales team. But now, Salesforce is much more than just an account tracker. It’ll integrate with your email system to incorporate correspondence, it’ll manage your outreach campaigns, it can act as discussion hub for sharing metrics and successes and a lot more — and it’ll all be accessible from any device your team cares to use. Adding functionality is quick and easy, requiring far fewer of your, or your customer’s, IT resources than would an on-premises system.

In short, it does more with less muss and fuss. Customers love that.

Let’s take another example. Look at backup systems. Face it, most of your clients are terrible at managing backup and recovery, and scant few ever came close to having a true business continuity plan. Developing and testing were just too complicated and expensive. Now, look what’s happened to the cloud backup market: There’s been a race to the bottom for prices, so the way that vendors differentiate themselves is by becoming true DR partners. Disaster recovery for what used to be the price of backup? Sure enough, it seems within reach, and that’s an improvement that comes only in the cloud.

There are plenty of other examples. Marketing automation is a favorite. This entire category basically didn’t and couldn’t exist except as a cloud service. Whether you have high-end needs met by the likes of Eloqua or Marketo, Web-focused needs met by Omniture, and/or more fundamental uses met by Google Analytics (and dozens of other products across the spectrum), it’s all enabled by the cloud, and businesses need partners who can help them use these tools to best effect.

My point is that if we had thought only about replacing existing services, cloud computing wouldn’t be all that important. Our early naming conventions didn’t help. “Software-as-a-service” sells this evolution far short. Imagine if radio had first been sold as “phonograph-as-a-service”? Playing music is an important function of radio that nestles in with many other important functions never possible with a phonograph.

Particularly critical to the Channel Partners audience is the fact that voice service is one of those functions that gets tossed into the mashup of cloud services, and in so doing, implies that partners must evolve, too. I took a look at my own daily office experience: About 40 percent of my voice interactions are through Skype for business, another 40 percent are through an Avaya soft phone, and the rest are on my cell. I have no dedicated office phone. Voice is just one more form of data that flows into my office.

While the death of the office phone may be a few years out for the general business worker, that isn’t the point. The point is that communications of all forms (from voice and video to text and email) are happening in the context of applications, and the applications that get those integrated services first are cloud-based.

In some cases, the only applications to get an integrated communication function will be cloud-based, depending on the use case.

Just as the difference between the imagined “phonograph-as-a-service” and radio is all about real-time communications and extensibility, one of the primary benefits that makes cloud services an imperative for business is near-real-time communication within the context of applications. Even cloud-based DR can now look at rerouting real-time communications as part of the plan. That’s something that would have been an expensive add-on to traditional multisite failover DR systems.

The Good News

From the vendor and partner point of view, the gold rush is on. With virtually any business or vertical you might serve having a foot in cloud services already, the question no longer is if they’ll adopt more cloud services. It’s when, and what they’ll use cloud for. From tactical functions, like tracking time and attendance, to IT services like DR, to productivity tools like virtual desktops, to fielding applications that are core to the company business, there’s something for everyone.

For years, we’ve referred to channel resellers as “trusted technology advisers.” As cloud services begin to take center stage, trusted technology advisers will be wise to transform themselves into trusted business advisers. The conversation doesn’t start with “How many seats do you have?” or “Which features do you need?” It starts with “What’s your plan for growth?” and “How are you building on your technology investments to nurture your business?”

The good news is that channel partners who are used to selling services — whether they be telephony, network, security or what have you — are in a great position. This isn’t true of your competitors with other backgrounds. There’s nothing wrong with a little luck nudging you to be in the right place at the right time. That doesn’t mean that selling cloud services is trivial, but while others learn the intricacies of services sales, you’re on to learning the ins and outs of being a trusted business adviser. And that’s why, on more than one level, the cloud means business. See you in Boston.

Art Wittmann is vice president of the Business Technology Network for Informa Exhibitions.

LinkedIn: linkedin.com/in/artwittmann

Twitter: @artwittmann


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