@tiffanywinman wrote a good post at the IBM Software Blog to celebrate Social Media Day. It's full of impressive statistics which show how far IBM has come as a social business and the impressive number of employees who are part of this transformation. All the more need for Partners to get up to speed and to leverage and take advantage of that massive IBM investment. I see Partners being the ones dragging the chain.
I had a minor twitch when I read that IBM has been using social software for 15 years. I think that a lot of firms have been using traditional collaborative tools, but they have not transformed into social businesses - so in that sense IBM is devaluing it's own achievements in social business by claiming to have been doing it for so long.
That's a pity because they are one of the most social media savvy organisations on the planet, at the same level of social business development as Microsoft, and the very astute EMC, and the highly invested Cisco. Even though Microsoft has topped IBM in a couple of polls of social business (Microsoft tops social media savvy companies - survey), these businesses are all clustered up in the high achievers.
Social business is about reinventing customer relationships, and this also means with Partners and the channel. I consistently see that the channel is the tortoise in this race to social business, and that they fail to really and fundamentally pick up on the assets which the vendors are providing them through the social business transformation. Microsoft is focusing on partner enablement through social business as a competitive edge, and also to help move their channel partners to better understand the customer buying process.
IBM is also directing many initiatves towards Partners, to help them grow their social media skills, social media marketing skills, and social business transformation. The IBM post outlines many of these, and there's been great work done by @sandy_carter - see IBM's social media skills initiative for partners.
To do that, to transform, they need a good strategy. And to develop a good social business strategy Partners need time (and resources). But luckily they have great examples in their vendors, and the smart partners will work that for everything that it is worth - and the vendors will pleased to help, it's their future at stake as well!
What's the partner maturity level in social business that you see? - please comment below.
Social business focuses on business outcomes, business models, and management related to the use of social media technologies.
Product Cocreation
That's obviously a definition which goes far beyond just customer service. And in fact IBM is a classic case of a company that is using social business in many ways beyond customer service, for example in collaborative new product develop. IBM sMash is a great example of product cocreation, with even the brand name coming from the community collaboration.
Transforming to a more innovative organisation
Kraft Food is a great example of transforming a large complex organisation to be more innovative with social business at the core.
Customer feedback accelerating sales
DELL facilitated customers serving themselves by putting a rating review system on its user forums and achieved a 138% increase in "intention to purchase". Perhaps this could be classified as "customer service" but I think it extends beyond the usual boundary. It's facilitation of customer conversations, combined with good analytics and measurement.
Project Management
Companies can improve project management through an integrated approach to social business. With regard to classic project dimensions of scope requirements, and change communication. Wendy Soucie has a really good presentation Project Management, Social Media, and Productivity and there is also The Social Media Project Manager. Social media can play a strong role here in making sure that everyone is on the same page, and that changes and variations are totally understood across the team, and thus help manage risk and cost. Organisations that move towards this as an ingrained culture will inevitably outperform their less socially aware peers - assertion!
Accelerating business growth
A small business example, AJ Bombers is the Milwaukee burger bar who have rocketed to success in a year, after starting business during the GFC - countering the odds! Owner Joe Sorge just saw social media and business as the way of doing things - in fact he says "customers are becoming the business".
Sorge says "this is a business built by social media; we don't know any other way to do it". Of course customer service is part of this, but AJ Bombers is a step beyond great customer service - he's developed a "whole product" of which customer service is just one part. Social business is the glue which holds it and folds it all together.
Product launches
Cisco "shaved six figures off its launch expenses and set a new precedent for future product launches" when it embraced social media as a key launch strategy. Cisco classified the launch as one of 5 most successful in the company history to that time, here are some stats:
9,000 people attended the social media product launch event;
90 times more attendees than in the past;
Saved 42,000 gallons of gas;
Nearly three times as many press articles as with traditional outreach methods;
More than 1,000 blog posts and 40 million online impressions.
Attracting Talent
While talent may always be plentiful attracting the best is always a challenge. Some firms who take this very seriously exploit social media for this purpose very seriously. Can't not be a social business if you attract this way due to mismatch of expectations.
Beyond customer relationships - partners
IBM, in an excellent paper in its Redbooks Series, notes how social businesses achieves the following benefits:
Ideas that improve products and services;
Increased loyalty throughout the ecosystem; and,
Excitement that spills over into a broader network of people.
This is important for businesses which rely on partners to provide critical components and services. Social business can accelerate the flow of information across these networks of people helping them work together as a team and share information, skills, and expertise to solve problems and to innovate and to sell.
Caveat - a holistic approach is needed
Interestingly, Valeria Maltoni (@ConversationAge) wrote sometime ago a post entitled "Why Customer Service in Social is not Fair" in which she pointed out that being active in social media has a downside if not matched by other customer service channels - "It sends the message that when all else fails, complaining publicly will get to a resolution, and it usually does". Social business has to embrace all interactions with the customer.
An agile social media group working within a non-agile organisation is going to cause friction-burn, for the employees and customers!
Maltoni adds, "Unless your business plans to use what it learns online as an opportunity to fix internal processes, social outposts will continue to be expensive lightning rods." The route to using "social outposts" is to have a comprehensive social business strategy in order to understand how implementation and integration of such opportunities can be executed as a "way of doing business" - culture.
So "no", social business isn't just better customer service.
Please comment if you have examples of social business which go beyond great customer service.
Where would you start with social business transformation, the top of bottom or both?
IBM and Facebook are not really fighting each other, just looking at the world from opposite ends of a telescope.
Consider, IBM has to make big inroads into the cloud computing world as a commercial necessity - to sell lots of servers (hardware) and lots of layers of management applications (software). It's a hardware, software and services business, right?
Facebook operates one of the world's most massive web-systems, far bigger than any bank and far different from any bank, which in fact are not web-systems but just very traditional datacentres and networks. Facebook's front is as social platform, but one of its key competencies is massive web-systems operations. Tim o'Reilly said Operations is the new secret sauce, and Facebook is a master operator - just look at the travails of Twitter or Tumblr, both notorious for their multiple system failures.
So perhaps Facebook and IBM have some common business competencies. Both know a huge fundamental amount about hardware, servers, networks, configurations and operations - on a very big scale. Both have some of the best brains in the industry.
But how they see the cloud world is remarkably different - they are laying their bets on difference races. For example IBM just had a major cloud announcement - IBM Unveils Cloud-Computing Initiative Aimed At Large Companies. This actually means "companies with very large computing requirements" and in this context Facebook is a very large company.
The gist of the IBM announcement is that "IBM is attempting to differentiate itself from some of the main players who have already made big bets on the cloud. Competitors such as Amazon's Web Services, Microsoft and Google". That's a good aim and given its assets IBM should be able to do that.
The IBM SmartCloud "will enable clients to use a Web-based interface to install applications and configure databases on a platform provided by the company". That notion centres on configuring and managing servers as the key unit.
On the other hand Facebook has just announced its Open Compute Project, which makes public and gives away all of it's design and construction plans and details for its new data centre - all the building works, the aircon, the electrical wiring etc - and all the server architecture and design. Facebook designed their own "vanity free" servers, in the same vein as Google using commodity servers. They don't need brands, fancy face plates and video cards in their servers. For its efforts, Facebook's new data centre uses 38% less energy to do the same work as it's existing facilities, while costing 24% less. For example, the data centre uses ethernet-powered LED lighting and passive cooling infrastructure to reduce energy spent on running the facility.
But more, Facebook don't see the server as the object of their attention. Facebook really sees a server as just another lightbulb. And the amount of attention they give to managing a flashed-out server is just the length of a flash. Comparatively, the attention needed in the "old" server-centric world is equivalent to that needed to re-start a blast furnace.
Complex management interfaces, architected upwards from a server-centric model, can't manage what Facebook needs. So they've architected it themselves from the top down, while at the same time redesigning hardware from the bottom-up.
IBM's not doing anything stupid, they're just doing what the rest of the industry is doing. The point is that Facebook isn't perceived as a technology company, far from it. It's often not perceived as an innovative company - when they do innovative things the social media is repleat with condemnation and those stating "that was obvious any fool could have done it". Facebook is not perceived as an expert in data centre design and rarely as an operator of massive web-scale systems that eclipse the complexity of the banks and airlines.
But Facebook is all those things. It's extremely technology-astute, it's innovative, it's ground-breaking, it's astoundingly connected in web-services and data-interfaced world (think the super-strong network effects of its social graph, and the way it has made itself core infrastructure e.g. Facebook Connectthroughout the web), and it has access to all the capital it needs to do anything.
And it's Open Compute Project may just unleash a whole wave of creativity which will dramatically change the way massive cloud computing is implemented, and for sure will encourage many start-ups to do things the Facebook way as versus the "industry" a la IBM way.
Should we expect it, as the norm, that companies with web-systems like Facebook could not use what IBM offers for cloud computing? This is kind of a high level statement, but true. If they did use the industry-commercial offers then this would kill Facebook, or Google, same story. Facebook and Google aren't building their own systems from the ground up because they really want to, but it's because they know they have to, for economic and performance reasons, because they understand fundamentally what is needed, and they can.
The cloud is going where the likes of Facebook and Google (and Amazon and Rackspace) are taking it. Not where the IT industry might hope it might be based on their current inventory and skill set.
The cloud shift is accelerating. It's not hype, it's not only remodelling business and business opportunities but also the whole IT industry and it's ecosystem, and it hasn't even started yet!
What do you think are the implications of Facebooks own-build of cloud computing?
What do you think is the ultimate potential of the Open Compute Project - just PR or a shift in industry power?
We used to talk about the dot-com boom, now Dell's doing a dot-cloud Boomi. The purchase of Boomi is smart, and puts Dell in a strong position in the cloud integration space, and in particular the cloud data integration space which I think is key to the business benefits of cloud. In fact I said just yesterday that the real business innovation with cloud will come from the information and data management - see Cloud Review Board - 5 governance responsibilities. But amongst all the analysis I don't see mention of 2 hidden gems which will emerge from this acquisition - one from Boomi and one from Dell.
First I'll review the general proposition, and why it's an important move for Dell, and then the gems.
You've got Dell Dude!
Those dudes who were buying Dell when Dell was the innovator in the PC market are the same dudes who are buying SaaS and "shadow IT" today. It's the outlyers, the edges of the business, the people who need to get things done faster than the IT processes can effectively support. What David Linthicum calls sneaking around IT to get to the cloud.
After these credit-card apps get going - and they usually do get going quite fast and effectively - they begin to come up against two challenges, and they are both to do with data:
Challenge #1 - how do we get data from/into our other systems (be they other SaaS or corporate on-premise); and,
Challenge #2 - gosh, how do we get our data? Meaning get it back, recover it, migrate it, disaster-proof it - treat it like a corporate asset and not another spreadsheet lost in the wilderness?
In fact, if these various "edge" credit-card apps initiatives are successful then there will come, over time, a compelling reason to want to have their data integrated and synchronized into a corporate view. Now that's going to be difficult if the corporate IT folk have been left out of the conversation, or ignored, to this point! A key to Boomi's success is in keeping it simple, and Dell will have to maintain that nimbleness and simplicity, plus call the nimble of those in the channel (see below) to satisfy the "you've got SaaS sister" market at the corporate edge.
That's where Boomi steps in. In simple terms Boomi is a SaaS version of Cast Iron, recently purchased by IBM. What seems to have attracted IBM to Cast Iron is that one version of their software sat on an appliance, which aligns perfectly with IBM's "private cloud" sales strategy, while Boomi sits all the cloud itself (Cast Iron did offer their Cloud2 as a SaaS offering, not sure if IBM continues to do so). As Dell says, pointedly, Boomi:
"...takes the cost and complexity out of integrating applications by allowing easy transfer of data between cloud-based and on-premise applications with no appliances, no software and no coding required."
Forrester analyst Stefan Ried recently described Boomi as a "robust third-party PaaS connector," which means, basically, that it's software that helps software play nice with other software. Specifically, it's a data glue that sticks together "on-premise" software from companies like Oracle and SAP and "off-premise" software like financial software hosted by NetSuite or contact management hosted by Salesforce.com.
Jeff Kaplan ponders that Boomi may have sold because it was growing so successfully and needed a big investment to reach the next step. They had to take a decision - find the money or find a buyer. He also points out that Dell's previous SaaS acquisitions - Everdream, SilverBack Technologies and MessageOne - haven't excelled under their new owner. Presumably Dell's learnt from that.
I think Dell's move on Boomi is a very smart one. It will certainly have companies like Informatica and Pervasive looking over their shoulder, as two of the few well established players in the cloud data integration market left (other smaller players include Hubspan, SnapLogic and a babe in the woods Cazoomi).
The purchase by Dell does surprise me, not that they weren't on the lookout. But I would have thought that it would be much more strategic for a cloud provider like Amazon, or Google, or Rackspace, or even Microsoft or even a CSC to have jumped in first. Those companies have to rise to the challenge of managing and integrating cloud-based applications with existing applications and databases, particularly the first three.
Boomi's hidden pot of gold - the channel
One of the strong assets, and perhaps an undervalued one, is its channel partners. There's endless controversy in the SaaS world as to whether SaaS providers actually need channel partners. After all if the purchase is simply and done directly from the vendor's website what role or value-add can channel partners offer?
Boomi has a strong channel program, and relies on channel partners to add new services and applications to its core offer. In fact it is a platform upon which channel partners can not only build their own software apps, to offer to clients globally, but of course they also offer implementation and project expertise to Boomi clients. Partners like WDCi in Australia have established strong businesses as a Boomi partner, for instance. To be sure, this channel strategy is the exception not the rule in the SaaS world and a definite asset for Boomi/Dell.
Dell's Perot Systems will also be able to take advantage of Boomi in the same way the channel partners do - by building on apps, and providing services and implementation.
Dell offers the Boomi channel - social media
Let's hope that Dell can continue to grow and motivate this particular specialist channel. Although it started life as a non-channel business, it now has a successful channel and even more of note it has strong social media credentials and activities in support of the channel. Here again, this is probably an under-rated or even overlooked part of this transaction.
Dell's expertise in social media will leverage Boomi's activities many times over, and will add a of value to the transaction. This will include in support activities, in partner education and training, in collaboration and problem solving, in innovation and idea generation (IdeaStorm), and last but not least in customer engagement and sales generation. All areas where Dell can deploy it's social media skills to Boomi.
Dell has a lot of cred in social media, more so than HP. IBM probably has a bigger investment in social media, but it's not so visible or at this stage potentially added as much business value as Dell's. Boomi's principals are active bloggers with valuable content, and Dell will be able to repurpose that many times over through different social media channels.
Dell as a cloud player?
All up, it's part of a new path which Dell is mapping out for itself. I must admit I have trouble getting my head to accept Dell as a serious cloud player, with even some of the press still calling it a "PC box maker" when publishing this acquisition announcement. But that's something I'm going to have to overcome.
Well done to the Boomi boys!
What do you think of Dell's cloud ambitions?
How would you best leverage Boomi if you were Dell?
So with all this optimism what gives with Barron's headline "A Private Party" - Big companies are quickly adopting new computer networks known as "private clouds." That may mean trouble for major tech suppliers?
Question: If companies are buying more private clouds - that is in layman's terms buying more of the same stuff to load up their data centres - then how can vendors be on the losing side? (It stands to reason, although it is not common logic, that the losers are the customers. The vendors are going to suck $12 billion out of customers, and that's just on hardware, and in return the customers essentially get business as usual.)
Great question, and it turns out the answer is that companies are converting to "private cloud" so fast that they are becoming more and more confident to take the next step to the real cloud.
It's that next step which is the Cloud Shift, and where real business benefits can start to accumulate. "Private cloud" is just gaining better productivity from your owned IT resources by using some of the technologies from the real cloud. It's more of the same and business as usual for customers, but a gold mine for salespeople selling "stuff" and that was the hope for the next 4 or 5 years.
It's an easy sell. A CEO hears about cost savings in moving to the cloud and calls up his IT chief. The IT chief, fully armed and briefed by the vendors who want to sell their products, slides into the chair, nods wisely about the potential savings and better use of capital, and then throws out the usual FUD about security etc. The CEO reflects on these risks to his bonus, and then during that pregnant pause the IT chief throws a lifeline into the ring - but we can get all those benefits if we built a cloud ourselves!
Viola! Everyone wins, on the surface at least, and the lastest round of gear is readied to be shipped into the data centre along with the upgrades to air conditioning, energy equipment, physical security, power supplies, and all those other things which add nothing to your competitive offer.
But the reality is that the customer's business has lost. And the vendors know that they have a limited window to exploit the opportunity to extract money from the customer's shareholders. What the Barron's report shows is that this window is closing much faster then we expected (at least in the US).
It's a good account. The key point being that the shift to "private" clouds, is going so well that big companies may be ready for the next phase of cloud computing years sooner than either Wall Street or Silicon Valley expected".
In other words, corporate customers gradually will be cutting back on big-ticket items and redirecting smaller amounts of money to computer-services providers.
That's tectonic news! Not only because sales will drop because of the massive efficiencies of the real cloud providers, but because:
[public cloud providers are] not willing to pay premium prices for branded hardware. A well-known example of this is Google, who bypasses traditional vendors and specifies and procures its servers directly from Asian contract manufacturers. Other large-scale datacenter operators are starting to pursue a similar strategy. Vendors like Dell and HP have responded by offering stripped-down servers designed to customer requirements. The problem for these vendors is that the selling prices and profit margins on these systems is lower than traditional models, as noted by a comment to the article.
That's one huge aspect, and the other is the fundamental one that massive cloud operators are enormously more efficient at managing and allocating resources than 99.9% of the of the world's IT shops. The big impact will be on the capital spending portion of the in-house IT spend, which some Wall St analysts are now predicting to decline significantly in a relatively short time frame. That must send a shiver up the spine of the likes of EMC for example.
Barron's says that for "Cisco, Oracle and HP to get in the game, it will probably require some key acquisitions... As their customers turn to the cloud, these fierce competitors will be fighting over a shrinking enterprise pie, increasingly selling their servers, storage and networking gear to what's expected to be just a handful of major cloud-service providers".
From an investor's viewpoint the real winner might just be Microsoft. Other public cloud providers such as Google and Amazon are trading on high multiples due to the success and growth prospects of their other lines of business. In contrast, Microsoft's price has been depressed, yet is has the best on-premise to cloud offers in the market and is poised for rapid growth in cloud services.
What's really going to happen to the others? Well it's not likely that HP nor Oracle are about to disappear, but it is likely that there will be major industry disruptions and new players emerging to claim their share of the public cloud of the future. The winners will actually be those businesses that best get their head around the Cloud Shift and cease investing in internal infrastructure that is not related to achieving that shift to the cloud.
Tammy Bruce said of Jesse James - last married to Sandra Bullock - "you can take the boy out of the ghetto but not the ghetto out of the boy". In a similar vein you can take the computing out of cloud computing but not cloud computing out of the cloud. The Cloud Shift hinges on that realization, and thankfully it's progressing well.
Do you see an acceleration of the transition through "private cloud" to real cloud?
How do you think the hardware and software product vendors will respond?
Which new entrant into public cloud do you think will cause the biggest industry disruption?
Whenever you hear Microsoft's Bob Muglia speak you realise that he is a very smart guy. I guess you need to be as president of the nearly $15 billion Server and Tools Division of Microsoft. Muglia controls key data center products like Windows Server, SQL Server and System Center, as well as the Windows Azure Platform-as-a-Service (Paas) - a key underpinning of the company's cloud strategy.
In an interviewwell worth reading (with IDG Enterprise Chief Content Officer John Gallant and InfoWorld.com Editor in Chief Eric Knorr) Muglia talked about Microsoft's cloud strategy and how customers are responding.
He was asked about Azure and how it compared to IBM's cloud offers, specifically CloudBurst although he responded more generally. He wasn't very complimentary:
Would you compare [Azure Appliance] with CloudBurst and what IBM has done with the Java platform?
No. Goodness no. What IBM is doing with CloudBurst is that their services teams are building specific installations. It's not at all like the engineering teams are building a single consistent platform that's being offered within their own environment. IBM is doing nothing at all like this. I mean IBM is more taking their existing technology and repackaging it in a form that they deliver as a services offering that's a cloud. They're bundling with it the services people. To me that's the opposite of what cloud is about. Cloud is about taking operational cost out, not adding it in.
Windows Azure is really the only ground-up cloud operating system that the industry has really seen. The only providers in the market that are really platform-as-a-service providers are Google and Salesforce.com. Both of those are very narrow in terms of what they're offering -- single language or a limited set of languages, limited set of services focused on a given set of applications. Windows Azure is very broad in that it supports a wide variety of languages: Java, .NET, PHP, Ruby. It's really meant for a broad set of applications and is a broad set of services.
What Muglia says is interesting, seems essentially correct, but he's probably being a little over competitive. (He left out that Amazon can provide Oracle's applications and platform on cloud, but he's right this isn't a cloud operating system.) I can understand that he wouldn't bag his partners HP or Dell, yet they are obvious candidates who intrinsically offer a lot less "cloud" than IBM and certainly not a cloud operating system - except that they can also offer the Azure Appliance.
It's not that cloud operating systems don't exist, think cloud operating system vendors like Eucalytus, Enomaly, Joyent, etc but they don't exist in the depth which Microsoft brings, or IBM for that matter.
IBM indeed has a huge opportunity to move into SaaS/cloud applications because of their massive applications portfolio. As Chairman Mao said, "The longest journey starts with a single step" and IBM is taking those steps into SaaS and cloud. For example IBM is launching Blueworks Live, a BPM solution delivered by channel partners to SMB customers by way of the cloud.
The idea behind BPM is to improve common actions like new user on-boarding or sales quote approvals by giving better visibility and control, according to IBM’s press release, and Blueworks Live puts those kind of activities into a Facebook-style news feed, enabling users to see what their colleagues are up to. In addition, IBM is touting Blueworks Live's "intuitive" discovery and documentation capabilities.
To be realistic Blueworks Live isn't a first step for IBM by any stretch of the imagination. IBM has its cloud division well established, well funded, and global. It has "Blue Cloud" centers spread around the world for developers, and it has many hosted apps on EC2 images for developers and in production.
There are many other IBM SaaS examples, as Muglia aludes to, and you would expect after a certain time that IBM would then offer a "single consistent platform" based on that experience and combining many of their acquisitions such as Cast Iron.
Which I guess is what the IBM Cloud Service Provider Platform is all about. That's impressive and aimed at telecoms carriers - carrier grade services, although it only appears to be IaaS at the moment (with the ability planned "to launch partner applications and services such as unified communications, collaboration, field force management, sales tracking and customer relationship management applications"), and conceivably falls into Muglia's category of "data centre in a box" comments.
In conclusion, yes Microsoft is well ahead on PaaS at the moment (and in the consumerization of IT as it relates to cloud services) and the Azure platform is extremely significant. However IBM would be far from the weakest potential competitor. After all IBM stands head and shoulders over every else in the industry in terms of history and size of their managed services - EDS is gone, CSC is much smaller - IBM know how to do it on a massive scale. Their cloud operating system can't be too far off.
And there is another point - nobody knows how this cloud shift will play out. It may be that despite Microsoft taking an early lead with IBM in pursuit that a new player will sideline the behemoths when it comes to the eventual dominance of cloud computing.
How strong a lead does Microsoft have with Azure?
Which are the most significant IBM cloud offers in terms of strategy?
Who do you think will be the cloud operating system winners?
As Jeffrey Kaplan has said "one of the misconceptions of the Software-as-a-Service (SaaS) and broader cloud computing market is that these new Web-based services will disintermediate the channel because of their simpler, more user-friendly solutions, and direct sales and delivery business models."
It's true that the channel will have to change, and make no mistake there will be winners and losers, and in a more dramatic way than in the last 20 years of the industry. It was Drucker who said that "In a time of rapid change distributors and distribution channels tend to change faster than anything else" and he also said that in these times of change it is not clear what kinds of (goods and) services will be sold through the changing channels. So don't feel alone in being confused, that's just how it is!
In this re-invention of the channel brought about by the "Cloud Shift" it's a matter of disconnecting and then reconnecting the value offered by the channel to customers. Resellers need to reassess their assets, strengths, advantages and offers and then match those to customer, segments, people and clearly understand the benefits and value. From there messages, communication, marketing and sales - customer engagement - leads on to the new business.
That's the big picture of the change, at the grass roots level today the Cloud presents some immediate opportunities.
AMI Partners recently reported an anticipated growth of "up to $95 billion in global SMB Cloud-related spending by 2014" and saw "companies like Microsoft and IBM who provide a convergence of on-premise and SaaS are clearing [security, privacy] concerns for interested SMBs who are trying to maximize the combination of cloud and on-premise issues".
They believe that Email/messaging, Online storage/backup, and Document management/collaboration will be the pull from SMBs and that the Cloud plus on-premise vendors (think Microsoft Small Business Server, Exchange Server and SharePoint) have a distinct advantage in converting them to Cloud (think BPOS applications like Exchange Online and SharePoint Online).
Many MSPs have taken on board the Cloud Shift, and want to offer BPOS applications like Exchange Online and SharePoint Online but they worry about slim BPOS profit opportunities and lack of customer "control". The later meaning that the customer will lessen their dependency and not be willing to spend money for support (and in the case of BPOS the customer is billed directly by Microsoft). In this thinking these MSPs are probably displaying their own business weaknesses as it's well known that no-one "controls" a customer or account these days and it's an old telco folly to think that billing "control" brings new business.
The reality is that customers are going to migrate anyway.
But they aren't going to do it overnight and as an MSP you can help them plan that move and at the same time develop new opportunities - I laid out five steps in this post.
AMI also believe that "mobile cloud applications are set to make deep inroads into the SMB market". This is the immediate opportunity for the channel in moving to support Cloud apps and Cloud conversion by their SMB clients. For example in the Microsoft Cloud world it is key to help customers understand the potential for integrating BPOS, CRM, & Azure - this provides powerful business and service opportunities.
MSP-driven mobile Cloud services opportunities
During the transiton period, which is on now, MSPs can work with their customers to help them decide which other Cloud and in particular mobile applications they need, would prefer to bundle, can be supplied or services provided by the MSP, and their price sensitivity.
Key applications used include mobile cloud CRM (customer relationship management), used by SMB sales staff to impact sales, improve time management, and better communicate via their smartphones. More widely, SMBs benefit from mobile cloud email (e.g., Blackberry), which is usually more dynamic than non-hosted Internet email systems and frequently less costly on a total cost of ownership (TCO) basis. SMBs are also making investments in enabling mobile access to their internal databases, inventory and related information, indicative of a broader need to have access to key data on the go.
This offers a channel driven play for hosters to tap into SMBs willingness to undertake expenditures to develop mobile capabilities. While enabling mobile access to SaaS applications already in use is a given, innovative business applications that allow SMBs to bypass physical infrastructure and yet operate in a highly collaborative manner will continue driving the utility of cloud mobility.
The key is that mobile cloud services have immediate value for many SMBs, since many have a mobile workforce and smartphone penetration is high and rising.
"This implies the end market for mobile cloud is adequately saturated with devices able to run mobile cloud applications and reap the benefits of hosted mobile services," said Karen Nielsen, senior consultant and telecom analyst for AMI-Partners.
MSPs who show their willingness to help SMBs transition into the Cloud, in a planned way, and then build on the Cloud value with specific application and services, say in mobile, will cement their place in the Cloud channels of the future.
What do you think are the best immediate "Cloud opportunities" for service providers with their existing customers?
Do you think that maintaining "customer control" through the billing relationship is an outdated concept or still something which a business should seek to guard and maintain?
They made the point that the Cloud plus on-premise vendors are best placed to take advantage of this shift, and in fact to help accelerate the shift.
"SMBs have their doubts, particularly around the security of a 3rd party hosting confidential numbers. But companies like Microsoft and IBM who provide a convergence of on-premise and SaaS are clearing these concerns for interested SMBs who are trying to maximize the combination of cloud and on-premise issues," said AMI Senior Associate Yedda Chew.
AMI believes that SMBs are easing into the concept of local plus cloud-based computing rather than leapfrogging into a pure-play platform, allowing companies like Microsoft, who not only provide hosted solutions like exchange online in its BPOS bundle, but also its ubiquitous "exchange on premise", to live in co-existence.
This on-premise plus Cloud flexibility provides visibility of the Cloud opportunity to SMBs while assuaging their security concerns. And then, in time, as the realization of the TCO of on-premise becomes more visible in comparison to Cloud, SMBs then have the potential to easily migrate from their on-premise Windows and .NET-based applications to the cloud.
Although AMI mentions both IBM and Microsoft to be well placed in having Cloud plus on-premise, I'm struggling to think how IBM fits here execpt for Lotus Live, which has little market penetration at the moment. In a comparison between the two Microsoft would have to be not only a country mile ahead but also an organisational generation ahead in transforming to this business model.
In another related cloud study AMI confirmed that CRM, payroll, accounting/financials and web-conferencing tend to be the leading applications currently used in the Cloud. Adoption intentions remain strong for CRM, Business Intelligence (BI) and web/video conferencing for the next 12 months.
So if we again compare the IBM and Microsoft cloud portfolios then IBM is barely on the map in all those cloud applications whereas Microsoft has a strong position in several. Of course IBM does have the on-premise applications, a monstrous suite of them, but not Cloud, not cheap and not simplified. And it's those last two points which accelerate Cloud adoption in the SMB space.
How should resellers and channel partners respond to this shift?
The first necessity is to go with the flow - the Cloud shift is not going to go away, and even if you deny it (because it threatens to cannibalize your current business) your customers will not.
So first step is to make sure that their current solutions are working well, and are as cost-effective as possible (I'm thinking on-premise here), and that you are familiar as you can afford to be with which features they are using, and which they don't need.
Second step is to work with them to understand which Cloud applications they are using and how they sourced them and how they feel about them, and how they link or do not link to their on-premise suite. Also note their wish-list for their potential integration of these services - between Cloud or between Cloud and on-premise.
Third step, and this might seem counter-intuitive, is to work with them over time to help them understand the proper TCO of their on-premise. This can be easier said than done because of all the hidden costs - a rough rule of thumb - take what they say are the costs and double them.
Fourth step, be pro-active in migrating them to an online suite, like Microsoft's BPOS, which cuts their costs and builds your goodwill. This may also seem counter-intuitive since it will also cut your revenue, but that's not necessarily true. It will be done over time, and if you initiate it you will guide that timeframe and can plan for it. You will also have the opportunity to now know where to add other higher value on-premise and Cloud applications which will add value and grow your income e.g. Remote Managed IT Services.
Fifth step, having worked with your customer you'll be able to find additional applications which will suit their business needs and are Cloud and where you can provide services. Notably, there is growing interest in using cloud-based productivity suites, along with bundling additional value-added components such as security, storage and wireless broadband access.
Following these steps will bring you closer to the customer's issues and place you in a position to close the knowledge gap on Cloud and SaaS, and help them migrate to SaaS applications where you can add value.
As a channel partner how would you help your customers move into Cloud?
How do you think Microsoft and IBM compare in their Cloud plus on-premise offerings?
IBM is often ranked in the top 50 of US companies in terms of social media savviness, but like most companies which sell indirect that savviness does not necessarily translate down through the channel.
This means that channel partners are actually missing the opportunity to leverage the investment that IBM is making in social media to help grow their business. In fact IBM found in their 2010 IBM Business Partner Social Media Survey that 75% of their partners were unsure of how to apply social media as an effective sales tool.
"They sense it could be an effective sales tool, but they don't know how to get started," said Sandy Carter, vice president, IBM software business partners and social media evangelist, in an interview (follow her @sandy_carter).
The online survey of 1,000 channel partners, the results of which IBM also unveiled last Thursday, found that 45% are experimenting with social media to drive new revenue streams. But 74% said they need more education and direction, Carter said. They were overwhelmed by the number of social media outlets and asked for training on specific tools like RSS, wikis, Facebook and Twitter. They also weren't sure how to measure the effectiveness of such efforts.
So IBM has just launched a "skills initiative" to bridge this knowledge gap. Some of the offerings, including online training sessions and a social media guide, are available immediately through IBM PartnerWorld Communities. Others will follow shortly, including a live session called "Leveraging Social Media for your Business" at the IBM Information On Demand Conference in Las Vegas in late October.
The initiative will also include online training sessions, podcasts, and Web events. Sandy Carter gives some immediate tips here on her YouTube update.
IBM is also offering partners a free one-year Lotus Live license to help set up communities with their customers. It is hoping partners will emulate its own PartnerWorld Communities, launched in June 2009, which has grown to a collection of social networking community spaces specifically designed to help its partners more easily connect and collaborate online.
The community, with members in 30 countries, extends beyond PartnerWorld with 10,000 partners tapping into 250 LinkedIn groups, 400 Facebook groups, and over 500 blogs on industry-specific topics ranging from SOA implementations and green IT to virtualization and cloud computing (and including the IBM Business Partner blog).
The 250 LinkedIn groups, 400 Facebook groups, and over 500 blogs are impressive statistics, an impressive social web footprint backing up IBM's ranking as a social media savvy corporation. In fact the Partner survey also showed that 97% of respondents described IBM's social computing capabilities as moderately to much better than other competing large IT vendors. Partners cited the expertise of IBM employees, support and responsiveness, and "ease of use" as reasons IBM is ahead of other technology and services companies.
This is all a good news story, for partners in particular. I'm still left wondering if the roadblock is the "how" and in the most simple way. Partners typically focus short-term and on sales, and they don't want to dig through a lot of material, as they indicated in their survey responses. The general education is all fine, but how do you get into it quickly, indepth, and in relation to sales. I know how we do it, because we use the XeeSM tool, but it is this aspect which might make or break the early success of this IBM effort with their partners.
What do you think of the IBM initiative?
Are you an IBM partner and agree with the survey findings?
What's the thing you most need from IBM social media as a partner?
Preparing well for a business conference is often said to be the key to success. After all, if you prepare well and achieve your objectives early then you can relax and enjoy! We all know from our own experience that when we don't give at least some thought to preparation that we are (a) inefficient at the event, and (b) we tend to run off in too many directions as we don't have our clear outcomes in mind.
Does this remind you of social media - you start down a track of checking a few people and a few status updates and then an hour has gone and you wonder what you are doing and what you achieved? Similar huh?
To get organised for a conference, in this day and age, requires the use of social business, and requires that you be as efficient as possible with your time, and to be effective. And in fact you can be remarkably effective and achieve much more at the meetings you do have by using social media.
So that's why I signed up for Xeesm, a new generation social business application. Xeesm has a module (free and PRO versions) which is called Xeesm/Flights! It's a neat name because a flight goes from A to B. You start with a destination. A Flight is in fact just a set of your contacts, but arranged in a meaningful business way so that all the right people are on the right Flights and heading in the right directions - and you are the air traffic controller AND the pilot. So you can onboard new people for the flight, and you track your waypoints to ensure that you are heading towards your destination.
Conference Planning Example
I received an email reminding me to register for the Online Retailing Conference in Sydney in June. It listed an impressive group of key speakers. I want to engage in a real conversation with some of those speakers at the conference.
How did I do it in the past?
Pre-2010 I would do a little research of their company site, read some news items, perhaps google their names, and then at the conference I would listen seriously to their talk and then frame a approach which I thought would be mutually of interest. The real work was actually in real time as I listened at the conference. Then I would figure out how and where to approach them. Still, after all this preparation I was still a stranger and at this point without a connection to the speakers.
What do I do now?
I create a Xeesm Flight. I call the Flight Online Retailing Conference, and add objectives. The ultimate objective is to have a constructive meeting and in that one meeting engage strongly. You can see in the image that Xeesm allows you up to 5 goals:
I start by listening and gauging how active my speakers-of-interest are in the social media;
Then for those that are active I move on to "Contributing" to their conversations;
Then I move on to "Refining My Engagement Objective" for the meeting at the conference according to what I find are their issues and concerns and expertise; and,
Then I start testing my ideas about topics and engagement by testing if I can arouse participation in those topics and issues in their social media; and,
Finally I have the objective of contacting them to arrange a meeting, on the basis that they have some idea who I am through the social business interactions.
That's the process, and all managed through the Flight.
Selecting your Flight passengers
Of course I have to add people to my flight in order to execute the daily routine of visits. Choosing the people is not rocket science - just match to your objectives. I'm not wanting to engage with speakers from Agencies, nor in general tools suppliers for this Flight. I do want to meet those from businesses, such as the IBM speaker, the speaker from Boots.com, Zazzle, Best Buy, Motorcycle Superstore, and also the people from Bazaarvoice as their customers in Australia could be my potential customers also.
The mechanics of doing that are easy:
I highlight the name and firm, right-click, and "Google search";
I also search the current Xeesm database for the same person, which in the case of Craig Stevenson (IBM) drew a blank;
In the case of no current entry add the person to your Contacts, and then to your Flight. You use the Google information to enter their social sites, and because Xeesm requires an email address if you don't know it you best guess.
In this way you end up with your people in your Flight, and some of their network places, at least the ones which come up high in Google. You can make it more personal for yourself by grabbing their Twitter or Linkedin photo and adding it to their contact profile.
Uploading your contacts
Now I'm not going to mislead you here, when you begin in this process it takes a bit of time uploading the people, but you get better and faster as you do it. For 10 people I would allow 30 minutes of concentrated work.
This may seem like a while, and it is, but your relationship isn't going to stop at the conference, and forever more they are in your Xeesm system, and in the global Xeesm database. By the way this is not wasted time as while researching and loading your people you are learning about their social media level of activity.
Daily Process
You have your people in your flights, you have their social places and spaces which you need for the moment, what do you do? Here's the program:
Start at least 2 to 3 weeks before the event, perhaps more;
Each day do the rounds of visits to each person in your Flight and their social media places;
Scan in relation to your goals, if you can jump ahead well and good;
Allow 2 to 3 days for each goal achievement, meaning you tick it "complete" after those 2 or 3 days.
Keep visiting, scanning, acting according to your goal, for example if you are up to the Participation goal, goal #4, then you should be achieving participation and shaping your request and agenda for the meeting request.
By day 10 to 15 you will have succeeded in getting a meeting, to discuss a topic of relevance to you and each of your targets, and the prework can continue by using your Flight up until the conference.
Conclusion
What I have described is a very directed, A to B, way of efficiently using your time to arrange relevant meeting with key people at a forthcoming conference. I think it's very apparent that the results, using Xeesm/Flight!, are going to be much better than other methods which you may have employed in the past - both for you and the people you plan to meet.
Have you used Xeesm/Flights for this purpose and how did it work for you?
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