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Now another turning point is coming. The marketplace is shifting into what Nichols calls "cloud sourcing" -- moving all IT to the cloud or, more simply, outsourcing using the cloud. While that transition isn't for everyone, Nichols said Appirio has already eaten its own dog food, running all of its IT in the cloud with Salesforce, Google and Workday.
Appirio is applying the same forward thinking that made it a cloud tour de force as the era of cloud sourcing looms. Like with past successes, Appirio is on the crest of a new wave before its competition.
And a recent Gartner study confirms that Appirio is on the right track. According to Gartner, 20 percent of businesses will have no IT assets in two years. That means one in five companies will utilize cloud-enabled services and solutions. The forecast signals a massive shift and opens the door for VARs and solution providers to find increasing success with cloud computing solutions and cloud sourcing offerings.
"IT today is saddled with an architecture that forces it to say no to a lot of what the business wants to do," he said.
Nichols said Appirio sees customers getting more aggressive about the cloud, and Appirio is there to help make the leap. That's opened the door for deeper relationships with customers as more applications are being moved into cloud platforms. Now Appirio can manage cloud platforms and get longer-term commitments from customers. Appirio also shares the same risk and reward in the cloud that its customers do, making the company a trusted partner and adviser, Nichols said.
Appirio's success, coupled with customer uncertainty, prompted Appirio to launch a Cloud Strategy practice late last year. The practice is designed to help CIOs build a case for moving to the cloud and a strategy to do so.
"CIOs are starting to understand they need to have a cloud strategy," Nichols said. "Companies have to focus on how they can use IT and not how to manufacture it."
That means VARs and solution providers must change too.
When Appirio got into the cloud game it didn't have a legacy hardware business. Other solution providers, however, face the challenge of letting go of their hardware pasts and adjusting to the new era of recurring revenue vs. an up-front capital expenditure.
"It causes everybody to step up their game one level," Nichols said. "There are a lot of new roles for partners."
The easily demonstrable TCO that SaaS and the cloud offer -- a 30 percent to 50 percent run rate savings is common -- helps sell the cloud computing vision, driving revenue, Nichols said. In addition, Nichols said Appirio has flagged business agility as the No. 1 reason for moving to the cloud. That focus requires both clients and solution providers to understand that it's no longer all about the technology -- it's about business processes as well.
"The fact is it's cheaper, there's a faster time to value and it's scalable," Nichols said. "You don't have to write huge checks to get started. But it's not just cheaper and faster, it's a better platform on which to build your business."
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