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In the old days there were four stages in the life cycle of an IT system. Sell the sizzle, deliver the sausage, wait for everyone get food poisoning, then sell the life saving antidote. It was the Tragic Circle.
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Then along came the cloud and disrupted that model. It’s much easier to buy software now because it comes in small doses and someone else manages it all for you, as a service. At last, when you want to join up two disparate territories, you can cross the bridge without having to pay the people in the IT department.
The cloud is healthier for the channel too. Instead of binge invoicing every quarter, your ingestion of income comes in the museli of small but much more regular streams. Not as exciting perhaps but a more sober and sociable way of doing business as you are constantly in touch with your clients, adding service and getting feedback.
The cloud creates a much more civilised business culture doesn’t it?
And yet, and yet.
A new report from Crayon suggests that many big corporations are facing massive problems of over consumption. Someone’s eyes were bigger than their budget and now there are massive licensing time bombs in many enterprises. If they were audited tomorrow, they’d get a rude surprise in the form of a massive backdated invoice and suddenly the entire corporation would grind to a halt while everyone blames each other. That’s one thing nobody mentioned about the cloud and virtualisation. When you break all the heirarchical structures, it’s much harder to apportion blame because there are 96 AASes to kick.
IT consultancy and software asset management player Crayon commissioned researcher Vanson Bourne to quiz 575 IT decision makers across Europe and the US. The resulting report, Software Asset Management, Cloud Transformation and the Cost of Compliance in 2016 predicts that many enterprises are going to get the equivalent of food poisoning. They’ll be paralysed by a painful audit which could set them back millions of pounds. This will be followed by a period when the enterprise’s own defence mechanisms (the finance, compliance and the legal departments) all turn in on the body of the company and start digesting each other.
This would be followed by a nasty loss of liquidity and the ejection of a few hapless employees. It’ll be ugly.
The problem is that companies with over 500 people are running an average of three software publishers’ products in their IT environments, because it’s so easy to do. But you purchase in haste and repent at leisure. The downside of these easy deployments is that the average enterprise in the study now risks being audited three times a year and exposed to fines starting at £1.6m.
Only a third (32%) of those polled said they even tried to lower the risk of getting caught out. And yet, they’re all (well 96% of them) moving or planning to move software and infrastructure to the Cloud.
This creates a no-brainer of a sales opportunity for service providers, according to Rune Syversen, Crayon Group’s CEO, who was in London earlier this week on a channel partner recruitment drvie at The Shard.
Businesses appear to be significantly struggling with the so-called panacea of the hybrid cloud, said Syverson. Anyone who can sort this problem out can show potential clients a provable return on investment.
However, these Project Fear type sales tactics don’t have the same potency they once had.
This is a problem that Crayon country manager Richard Lockey understands. Crayon has started to include more subtle persuasive tactics in its marketing arsenal. They are even using humour to engage with clients. They made a funny video that warned about the drawback of the cloud and there’s some amusing blogs on the subject on its web site. Even the CEO is in on the act, with some obervational humour about the IT industry that was too edgy to be repeated here. I love that sort of plain speaking, but I’m not going to risk quoting him. You’ll have to go and see his act live.
This seems to engage people at least. “Since we started our policy of social selling in the last six months we’ve seen a big increase in the number of inquires we get,” says Richard Lockey, Crayon’s country manager.
So selling services doesn’t have to be about gloomy predictions about dark clouds. Which would be a refreshing change from the rest of the industry.