Buyers: Cloud has an Offering Issue!
Over the weekend I was reading some articles on the cloud. And there was not only one graphic showing a huge number of cloud service provider logos with an as huge number of offerings – almost all of them did. These graphics grow and grow over the years, so we move into a great world of huge choice. Do we? Well, I guess not so soon. Because what I also did over the weekend was summarizing the results of two cloud workshops I did with buyers at our US and Brazil summits (Topic: How to calculate a cloud business case). One part of those workshops was a quick reality check survey, and that reality check showed me that the number of cloud offering is not at all at a satisfactory level today:
The cloud provider market still needs to evolve a lot. The only number above 6 was the SaaS number in Brazil, saying that 7 out of 10 buyers are satisfied with the number of offerings out there. But in some categories not even half of the buyers are happy with what the market provides. The market needs more choice – buyers fear lock-in and the ability to benchmark and negotiate.
60% of the workshop participants in both regions buy cloud services because they provide better functionality compared to their current solution (50% list cost as a key driver). This means that buyers appreciate the innovation coming from the cloud. And while innovation in tradition outsourcing relationships is mostly something buyers need to demand and push for, it is a “by design” thing in the cloud. Competition in the highly industrialized world is requiring providers to innovate – that is why choice (competition) is important for buyers of cloud services.
Beware the too positive messages – there is a way to go!