One of the aspects of cloud computing that receives too little attention is the massive change it brings to how software and IT infrastructure are marketed, sold, purchased and serviced. Through my work at GigaSpaces, and now advising start-ups and large companies with various cloud offerings, I have come to realize how much marketing cloud computing is still uncharted territory -- and especially when it comes to the enterprise.
Many of the value propositions cloud brings to the table have been commonplace in the consumer Internet for more than a decade: self-service, ease-of-use, pay-by-the-drink pricing and so on. The same is true from the vendor's point-of-view: a low-touch, low-value, high-volume and short sales cycle. It's no surprise then that consumer-oriented companies, such as Amazon and Google, are the ones leading the charge in what is essentially a B2B market.
As I mention in a recent podcast with Matt Asay and James Urquhart, pioneers such as Amazon and Salesforce.com -- and not to mention many of the cloud start-ups out there -- are learning what open source software companies have learned before them: software and IT infrastructure sales have changed forever. New products are adopted through daily decisions by the rank-and-file programmers, business users and system administrators; not through strategic decisions by the CIO or a central architecture committee. It also means that gone are the big upfront paydays, which placed the burden of the product actually delivering on its promise on the customer and not the vendor. In return, however, products that delight the customer will become fat cash cows.
I remember a few years ago reading about Salesforce.com's first enterprise sale: 500 seats to a small wealth management department in a large Wall Street bank. Yes, that same product of which the skeptics said enterprises would never trust to keep their sensitive sales information "on the Internet". I knew then that in the long run -- it's game over.
To be sure, there are many challenges to be overcome. What is the optimal pricing model and how to alleviate customer fears about how much they will end up paying? How to best utilize social media and automated marketing while addressing the processes and decision-making structures of larger companies? How to create an ecosystem of ancillary services and add-ons around the cloud product? How to provide cost-effective support without compromising quality? How to structure and compensate the sales and marketing organizations? These are all tricky questions, but some of us are working hard on figuring them out.
I hope to write some more posts on this topic because there are many lessons learned. Check out Hubs, Spokes and Islands in the Cloud for a start.
