IT suppliers struggle to meet customers' cloud expectations

IT suppliers are struggling to transform their business models to meet customers' expectations of cloud

IT suppliers are struggling to meet customers' cloud expectations.

A survey of 30 IT suppliers, carried out by Accenture, revealed many senior executives lack understanding of how new business models will affect their business.

While cloud computing is transforming how businesses operate, through providing flexible on-demand access to the latest technology on a pay-per-use basis, suppliers are wrestling with their business models.

“Growing cloud-based business models is highly strategic and an immense undertaking for high-tech companies,” said Mitch Cline, global managing director in Accenture’s electronics and high-tech group.

 “Companies face enormous operational challenges in determining how to support these new models and deliver the world-class experience demanded by enterprise customers, in particular. Companies aren't prepared today strategically or operationally to cope with the magnitude of disruption they’re facing.”

Selling products as cloud services introduces new ways of being paid, with small regular payments rather than large one-off payments, as well as new delivery mechanisms.

“Delivering to customers using a service business model is so fundamentally different from using a product business model that nearly all business operations need to be re-thought,” said Cline. 

"As a result, high-tech companies need a coherent blueprint to make a successful shift to a services-centric business and to compete more nimbly with new cloud competitors.”

He said COOs at suppliers should take a leading role in transforming the business to one that can cater for cloud delivery.

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