Thursday, 16 June 2011

Cloud Strategy - Why playing catch up is not a plan

The Cloud? Ah, don't worry. When the action really starts, I'll get my strategy together and get a piece of the action.

Tell that to The SaaS based CRM specialist reported over $500m revenues in its third quarter up 34% on the previous year as it continued to outperform market expectations. And don't think this is just a US thing, as 20% of sales came from Europe which is growing faster. It's highly profitable, cash generative and it's revolutionised the whole approach to database-centric applications for road based salespeople. Then there's NetSuite, a SaaS based accounting, ERP, BI system, which has grown quickly to over $170m per quarter when on premise solutions like Oracle have seen declines in revenue.

Wait a minute. These companies are not mainstream players, are they? No. If you are in the channel and locked into premise based solutions, then you will have not heard of these products other than to compete against them. Well, most of us has by now heard of if you are in the business of selling.

You see, in The Cloud there are already established players leading the field and they do not have to reinvent their strategies and invest in massive back end infrastructure and hosting farms to compete. With Salesforce and NetSuite they are already there as that was the whole purpose of their businesses. Current on premise vendors have to enter their world, on their terms. And so too do the channel - or at least that's what you hope they will allow you to do.
So if you were today a company looking at embracing The Cloud pretty fully, you surely would not have many options would you? Think again.

For your accounts, ERP, payroll, planning, business intelligence, NetSuite is the established leader and it challenges anything on the market today in terms of capability. Salesforce is there for CRM but it goes far, far deeper with its superb modular approach to linking to established business systems like SAP so that you can take lead management and tracking to commission payments in nice leaps and even run your support ticket system or internal IT requests as well as whip the sales teams on KPI performance. Microsoft 365 has solutions for standard front office systems already in place but look closely at Google, their approach in The Cloud is far more flexible and their Apps are already available for multiple devices such as iPad or Android machines allowing cross platform synchronisation. Evernote is another good example of a brilliant alternative to MS OneNote.

Data Management solutions are plentiful but many are just offering back up space in The Cloud. True Cloud applications are better like Novastor or Zmanda or Vortex. For phones and communication, at the low end Skype is good for small businesses, but RingCentral, Vonage, Unity, VoiceBus and others offer great virtual PBX systems that allow you to receive calls wherever you are as if on a switchboard.

Mobility solutions are well established with RIM as the leader, but I like the Android set up. I really think Google is thinking more practically. HR solutions have some excellent systems with ex-PeopleSoft staff behind and the talent management system, Taleo, is now forcing its way on the scene.

There are many more. The point here is that The Cloud has leading players out there and playing catch up is a costly strategy. Particularly costly for channel, as many of these lead players in Cloud applications have either shunned channels or use very different ways to reach users. Old assumptions are not applicable here. For many of these vendors, the world changed the day they started and they are not about to cow tail to the old market now.

So, if you are going to wait on the fence in channel world, watch out for splinters in the backside.

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