Discussion topics on engaging enterprise companies are often a daily task for me these days. As the economy climate start to settle, many ISV’s face great opportunities and requests from larger organisations, and consuming cloud applications is on many CIO’s and CTO’s strategy plans the next couple of years.
Previously I have discussed a opinion of mine, that Identity is the tipping point for the cloud. I would like to connect this back to the CIOs, CTSs and IT business decision makers in modern companies. Selecting a vendor, provider or hosted that cannot help you establish single sign-on and enterprise identity life-cycle management (EILM) will not bring success to any cloud enablement. Also for ISV’s – if you do not offer, and I repeat, do not offer and identity solution to bridge internal identities with your application, your application will never be consumed in an enterprise state.
Microsoft is facilitating the TechEd 2010 in New Orleans, and among many new and broad insight, I seems like Microsoft finally started to push back on their strategy for hosters. For a long time, hosting partners and Microsoft has collided as Microsoft launched BPOS and later Azure. Whether or not the parts see themselves as competitors or not, many hosting partners are facing a hard time on cost-pressure commodity services, and failing to recap their business strategy to go up the stack. Seeing Azure and BPOS as a competitive solution are fare from the truth, and I would like to use Bob Muglia’s statements from TechEd 2010:
“Microsoft sees hosting partners becoming more important as the cloud becomes more predominant. The partner piece of this is incredibly important.”
Muglia said – CRN http://www.crn.com/software/225402105
“If a business wants to go outside the firewall in a cloud environment, Muglia notes, the main difference between using Microsoft and one of its hosting partners is that a partner’s cloud can be customized better to your environment.”
Also Bob Muglia touched upon the statement of building Windows Azure together with hosting offerings, maybe bundling BPOS for other services. This has been the voice of Microsoft for many months, but I yet still see a lot of hosters, neglecting to recap their business strategy and start building dynamic data centers to support higher margin services and outsourcing opportunities.
- SMB customers WISH to outsource their IT these day.
- SMB customers WISH to rent commodities at a very low price
- SMB customers NEED fanatically good support
- SMB customers SEE service providers as their future IT support
Even Enterprise customers wish to asses their opportunities: http://advice.cio.com/vanessa_alvarez/10108/look_beyond_cloud_labels_prepare_for_hybrid_journey
Face your fears and change your business model. Turn into a service provider to facilitate services and sell more premium support packages on top of BPOS. It does not sell itself, and the term, just of using a credit card does not compete with a hosters telesales organization!!! Turn into a hoster to transform business from internal IT management to outsource IT management with a combination of dynamic data centers and commodity services. As Bob Muglia shows, Windows AppFabric may be the piece to tie it all together, so partner up with SI’s or software vendors to make the solutions stick. Microsoft ForeFront 2010 offers extensive identity integration capabilities, giving an established hoster or service provider, many many new channels of revenue.
Independent Software Vendors often launch Partner Programs and form partnerships for extend their channel and reach of revenue. Some of these revenue stream are traditional hosting providers (often referred as Technology Partners or Hosting Partners) – providers of static non-dynamic / non-optimized hosting. Within the next 3-5 years, many ISV’s will be forced to break this relationship to persue new opportunities of self-control and service delivery.
With the launch of Windows Azure, Google Cloud and enterprise cloud solutions like CloudRig and vCloud, ISV’s are able to manage and control their own relationship of hosting – and managed those required resources. Many ISV’s still have legacy offerings and despite Microsoft’s push on Azure, many ISV’s will still not launch service on that platform. Hosting providers have to find new ways of adding value to the ISV’s, but my belief is a certain few cloud vendors will have knowhow to persue the opportunity to bundle the right services and products to prove a gardened relationship to the ISV’s.
The revenue channels and business model for SaaS formes nicely around Independent Software Vendors these days; their opportunity is enormous and only the right focus can help ISV’s pick the right cloud strategy. A resent survey I made with 130 ISV’s in Scandinavia 82% considered SaaS a great opportunity and 67% would invest in this opportunity within the next two years. 16% consider Azure as a platform, while 54% would rather have their legacy application prove their business case for Cloud Computing. Interesting number, but also interesting to follow these ISV’s.