OUR POINT OF VIEW
Several key trends are necessitating that technology vendors strongly consider cloud plays in their portfolio of products and service offerings. First, the boundaries between enterprise technology and consumer technology are rapidly blurring. Personal devices are being used to access corporate information, and conversely, corporate workers frequently use public web services in the context of accomplishing work-related tasks, doing so from within corporate IT networks. Second, the increase in remote/virtual workers as well as a global workforce is forcing corporate IT departments to re-think how their users access and consume IT services. And third, end-users expectations of IT are changing - based on their experiences with personal consumer web services - around ease of use, accessibility and reliability. Consequently cloud solutions are gaining traction with both enterprise and end customers – primarily because it promises to deliver a number of benefits:
- Rapid time to deliver value
- Flexible pricing (e.g. subscriptions, pay-per-use)
- Shift in investment model from CapEx to OpEx
- Elasticity to support changing business needs/conditions
Given the above trends, it is imperative that technology vendors – be they hardware, software or services firms – develop a cloud strategy taking into account their customer’s consumption models, the competitive landscape, their existing portfolio, and capabilities. However, taking a cloud service to market is fundamentally different from a traditional product or service, and it is imperative that technology vendors looking to introduce cloud-based offers manage the transition carefully. Making the shift to cloud-based models requires focus on the following:
- Offering portfolio – Taking into consideration the dynamics at play from a customer, competitive and core capabilities perspective, technology vendors need to evaluate the strategic options to transform their existing offering portfolio and decide whether to incrementally evolve or completely re-invent
- Economic model – The economics of a cloud-based model are fundamentally different from that of a traditional model due to the differences in the pricing model, selling approach, and the operational capability needed to deliver a cloud-based service. A provider needs to clearly understand the financial implication of launching a cloud based offering
- Operating model – A number of key differences exist in the operating model including customer acquisition methods, channel strategy, professional services, engineering methodology and legal/risk considerations. These differences necessitate different capabilities, management systems and metrics
Waterstone has helped a number of enterprise software, hardware and diversified technology companies with launching and scaling their cloud-based businesses. Our team’s unique blend of operating and consulting experience in the technology industry enables a strong partnership with our clients to drive results. We work with clients across all aspects of their cloud strategy including:
- Assessing market relevance of existing portfolio and determining opportunity/ need for a cloud based service
- Modeling the economics of the cloud business and evaluating the impact on existing financials
- Supporting the design of cloud based offers – value proposition, pricing, etc.
- Defining the operating model, i.e. sales and service delivery to launch and scale
- Supporting the launch and execution by providing interim management, and/or program support
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