Cloud Service Pitches: Frequently All Talk, No PO

While cloud services are considered by many to be the next logical step of information technology, a number of channel representatives attending this week's HP Global Partner Conference in Las Vegas say that getting signatures at the bottom of the contracts can often be problematic.

A move to the cloud may be controversial within any given organization. Executives involved with accounting aspects may be drawn to the cloud's potential to trim the expense line. IT staff, on the other hand, may see the cloud as a threat to their jobs.

"You will find that different people within the organization have different agendas," said Al Chien, vice president of sales and marketing at Dasher Technologies, a Campbell, Calif.-based HP channel partner. "The discussion usually initiates in a CXO's office. If the CIO has given the direction, then the conversation evolves differently than it would if it came from elsewhere within the organization. Once that mandate is given, things seem to become more focused. This is particularly true at the enterprise level, which has been a lot slower to adopt."

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The conventional wisdom around job displacement is that the cloud will free them up from mundane tasks so that IT personnel can focus on more strategic and valuable initiatives. "This argument is more accepted in some cases than in others," added Chien. "There are always individuals who feel threatened by the cloud, but a lot of times, moving to the cloud makes a lot of sense. It's definitely a learning process, and we need to spend time educating the client and helping to alleviate their concerns."

Most partners agree that getting the customer comfortable with cloud services tends to be job one from a sales point of view, as soon as the idea is brought to the customers.

"It is about understanding customer biases and either helping them to adjust or evolving with those biases," said Linda Delario, vice president of Premier Systems, Ltd., a Philadelphia-based partner. "You take the vendor message back to the customer, and then apply it to their business situation to build a solution that enhances performance, reduces cost, or whatever the end result might be. In most cases we see a hybrid model in which customers want to move some things to the cloud and the other things on the premises."

As such, many vendors, distributors and other players in the IT industry have been developing channel enablement programs and similar initiatives aimed at attracting channel partners to sell their offering and generally view the potential of cloud in ways compatible to their own.

"HP is focusing on support, training, go-to-market assistance, cloud access, proof of concept, technical support, and similar forms of assistance for their channel partners," said Dan Baigent, senior director of business development for HP's cloud services. "A lot of them are still unsure of how to enter this market and how to adjust their strategies and back-end systems. So we are helping them learn to manage their annuity streams and helping them to develop the systems to support that."

Baigent added that the initial inquiries are often the most critical part of the discussion. "The partner needs to take the temperature of the customer organization," he explained. "They need to find out who is in favor of cloud services and who is not in favor of cloud services and how to align the value proposition with the needs of various groups."

NEXT: Augmenting The Transition

As is the case for most vendors, HP's channel enablement efforts in the cloud are aimed at gathering support among third parties that can help validate their messages to end users.

"Most channel partners are fairly vendor neutral," HP's Baigent said. "If we succeed in educating them, we will help them not only develop their business, they can re-tell our story and bring forth third-party credibility."

Bell Canada is another company that works with channel partners to sell cloud services. According to Sales Director Benji Germain, Bell Canada's marketing strategy also includes a great deal of customer outreach aimed at helping prospects become comfortable with the idea of leveraging the cloud.

"Customers are frequently confused about how to start the transition," he said. "So we do workshops and cloud readiness assessments and help them build a plan around are prioritized needs. Many times, we find ourselves in situations where we're doing a lot of talking and the customer is not taking any action. Usually this is because of some sort of internal disagreements on whether to adopt cloud or the extent to which they should adopt cloud. So, we try to break down those barriers as much as possible, but it is an ongoing challenge."

These challenges are not limited to the U.S. and Canada. A variety of other regions, including South America, are noting similar experiences.

We are pioneering a cloud service in Colombia, but [the uptake] is slow," said Francisco Galvis, president of Compufacil, S.A., a Colombia-based channel partner. "Customers want to talk about it, but it can take a long time to get the decision. We typically need to get approval from a lot of different people within the organizations, some of whom may not be particularly interested in moving towards the cloud."

Although the IT world may become increasingly cloud-oriented in the future, the channel, as well as the variety of vendors and other industry players pursuing cloud strategies, have a lot of evangelizing to do in order to reduce sales cycles and strengthen customer acceptance.

"Moving to cloud requires a change in mindset," summarized Chien from Dasher Technologies. "Right now, a lot of people want to talk about it and some of them have budget for it, but most of them are very unsure of what they want to do. We are seeing a lot of tire kicking right now."