Thursday, August 29, 2013

Cloud is a difficult nut to crack: Big organizations don’t know how to deal with it

As discussed in my previous article that replicating the success in cloud has been very difficult for some of the big organizations which are tuned to sell traditional license based products. The reasons are many. It is however interesting to go through them as you can see a clear pattern emerging.
Behave like an ostrich, the mode of self-denial:  About 3-4 years back cloud was still in – infancy. However, the reactions from the top software product players were stereo-typical – burry your head in the sand and feel safe. Most of the big guys thought that cloud is a flash in the pan and will not stand the testimony of time. At least they tried putting a brave face in front of the world. They were in this mode till it became too late for them. Some of them started reacting to the challenges but it was a case of too little and too late.
Partner Ecosystem: Some of the large enterprise organizations owe much of their success to the partner ecosystem. Now moving on to the cloud doesn’t help much the partners as they earn their money around the consulting work. By the very nature of cloud solution the consulting pie decreases.
Internal culture: The internal culture is one of the main roadblocks toward a successful transformation towards a cloud business model. The sales machine ( read as the sales organization) is so hung up on a commission model which is based on license sales they find it very difficult to move on to a commission model which is more geared to a SaaS cloud based model where in the revenue is staggered over a number of years.
White washing of cloud offerings:  Whitewashing the cloud offerings by all parties have left the markets and customers confused. Even services like remote infrastructure hosting seem to have been branded as cloud by organizations.
The difficult times of 2008: As big fat software product organizations were hoping that cloud would die down over a period of time, the economic crisis provided the much needed support for the cloud based organizations. Cash strapped organizations were looking at cloud more from changing their CAPEX to OPEX. They also become more open to cloud based solutions.

Technology advanced: As there was more adoption of cloud in the market the fear of security breach of cloud solutions died down or maybe customers took a more realistic view of the problem ( if at all there was any serious problem, which I feel was never there ).
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