It's Time To Involve Integrators In Planning On-Demand Deployment

This industry has always been driven by major trends. In the early days, it was merely automating basic work functions through deployment of word processors and spreadsheets. We moved on to basic networking, driven at first by its ability to share peripherals. Client/server computing came along later on.

But there also have been concepts proposed by very powerful companies that did not take hold either because those companies couldn't deliver quickly enough on the concept or there wasn't enough value in its deployment. The network computer touted by IBM and Oracle as an alternative to the PC is one example.

We are in the very early stages of a paradigm shift in how we sell, deploy and pay for computing power. IBM's Sam Palmisano spelled out the concept last October, and since then the on-demand computing model has become the trend to glom onto.

But now it's time to begin the discussion regarding how some of the details will take hold. If you sit back and assume that this movement is real and some day we will all have access to scalable power at will, then a major differentiator is going to be the pricing model.

We all assume that whatever telephone company we choose today will be able to provide the service we require. The choice comes down to value for the price.

But access to computing power in an on-demand fashion is never going to be as seamless as buying electricity or telephone service. If we need more electricity, we simply plug in a new device. If we require additional phone service features, one call generally results in a simple install.

When it comes to on-demand computing, it's hard to imagine the ability to add a CRM package just as easily, for instance. There are too many compatibility, training, deployment and other issues to make it an easy add,at least right now.

But pricing is, nonetheless, ultimately going to be a differentiator over the short term, in my opinion. The early adopters of on-demand computing will do so because it makes economic and time-to-market sense. Businesses that have computing needs that spike during seasonal times, for instance, are natural customers because they can avoid the need to purchase computing power that will sit idle for months at a time. But the decision to make the shift has to make economic sense.

The channel has always been closest to pricing issues, given its role in integrating and deploying technology for customers. It's time for vendors and integrators to begin the discussion regarding how to structure pricing schemes to make them attractive to customers and profitable for vendors and integrators.

Pricing is always a difficult issue. The right pricing can speed adoption of on-demand. The wrong pricing could stall it for years. And once pricing is rolled out, it is difficult to change it. Just take a look at Microsoft's licensing issues over the past year.

The channel's experience and expertise in pricing are assets that vendors ought to take advantage of as they model their go-to-market strategies. Clearly there are going to be a number of options for customers in the on-demand space, and because the end user will be more distanced from the computing power than in today's world, pricing is going to be a critical and tangible factor for comparison.

Getting technology integrators involved early on in taking this to market can only increase vendors' chances of success.

Make something happen. I can be reached at (516) 562-7812 or via e-mail at [email protected].