Cloud – understand your perspective

It has been 13 years since I heard the cloud term the first time. 10 years since I saw the first real cloud business model evolve. You would have to expect cloud was a defacto in the IT industry.

However, in working with various people in my line of work, I still face a lot of people who believe cloud “is just a delivery model”. I understand their reasons for this view – but I am surprised on the lack of insight to the financial elements of the cloud business models.

The cloud is a business model. Period.

Why? Because the distribution channel, the financial model and the supply chain changes rapidly. Above all – the organization changes. Existing vendors, practices and partners often hand on to the old form of IT distribution models. Moving your practice to a customer experience economy is though. It requires significant investments, and a new organization.

To understand that the cloud is, I would urge that you look at the following perspective:

  • C. Customer. Everything in cloud is about the customer, and the customer experience. For any process, design, product, offering, role, person, investment – consider where the customer interface exist. Cloud is not a delivery model.
  • L. Learn. Legacy. It is easy to built a new cloud business. You start from a clean slate – and you do not have to change any organization, change culture and adopt to the required innovation. Yet – 80% of the IT market is still established companies. Your second task as moving to the cloud, is to “re-learn” and “re-educate” yourself on the organization, on your customer base and channel partners and vendors. My recommendation; interview them. It is a great experience to meet clients and explain you wish to learn from them on how you can improve.
  • O. Opportunity. Organization. when I consult business’ on the cloud opportunity, and follow them over years, one thing always happen. A small spike of light turn into a fire. Once people open the chapter of the cloud book, the organization change and start to form differently. People automatically start innovating the offerings, products and processes. The cloud is about the opportunity, organization and innovation. As a leader you will need to instill this behavior in the culture and the DNA.
  • U. Understand. Uniform. Understand the gaps, issues, constraints and problems that pop up. Anything that presents itself as a problem can be turned into an opportunity. Trust me. If anything seems difficult – consider how you differentiate against your industry peers.
  • D. Delivery. Yes. Cloud is a different delivery model. Very different. However as you start your cloud journey, do not start with the delivery model. You need to align the customer into the context, and you need to learn the difference about the delivery model in the cloud space. Driving public or private cloud offerings, you still need to supply billing, support, transaction, deployment and adoption services. The experience of any customer in these 5 areas is crucial. Consider wisely what should be self service capabilities, what should be high touch people handled – or what gaps you have in your existing organization or business process map. Customers will pick up on this, if not optimal.

In summary – cloud begins with the customer and ends with the delivery model. I hope this serve to your inspiration how to get going.

42 – Strange Week of Change for Microsoft

Mark my words – this week will be remembered as the moment of change for Microsoft. And 42 is again the answer.

Throughout the last five weeks, Microsoft have been on a wave of great announcements with Microsoft Dynamics CRM 2011, Windows Phone 7 and the launch of new initiatives. But Microsoft also suffered a loss when president of Microsoft  Business Division – Stephen Elop moved to Nokia.

Coincidence or planned? Is Microsoft rattling the crate to stir up new roles and transition the company management?

All though the weeks have been exciting, this week of 42 2010 have been a tipping point for Microsoft. The week started as Ray Ozzie, CTO for Microsoft, announced his retirement from the company he made a change for. Microsoft lost a great asset i Ray, and the solutions invented under his management will set the stage for Microsoft the next 10 year. Starting low – Microsoft made its comeback with the announcement of Office 365. Finally a clear indication of “all in”. And what a statement. I believe it is the right model, I believe it is the only model for Microsoft. Unfortunately I do not believe in the execution of the model, as too many partners of Microsoft are trying to cope, and find their balance in the act. It is hard times with margins targeting zero – and customers declining professional services.

The IT market is undergoing a dramatic change and, this week have marked the transformation of Microsoft. Personally I do believe that the change in management is planned. I do believe that Microsoft is seeking new innovative and smart people to continue the path of cloud computing. For the thousands of partners this means new faces, new models and new business development.

But it also mean hard time for cash and collect, and I do believe that partners should recap their business model, and start changing. I follow many independent software vendors every day – and yet these companies have the best opportunity and model to fit for cloud computing, they still act as yesterday.

Ray Ozzie, Stephen Elop and Office 365 are marks of change. Consider your change today!