Cloud Buyers Beware as Suppliers Struggle

J. Caron

J. Caron

Summary Bullets:

  • Service providers and technology companies are often criticized for being slow to market with cloud services.
  • The cloud is as transformative for suppliers as it could be for IT, so gain assurances of stability before buying.

It is sometimes too easy to be critical of large service providers and technology companies as they grapple with the latest whims and fancies of enterprise IT taste.  The current phenomenon of cloud-based service models is a striking case in point.  As demand – or perceived demand, at least – grows for cloud infrastructure and applications, it has become quite clear that traditional suppliers are being forced to engage in all sorts of organizational gymnastics to cobble together, sell and support the services.  You have to pity them, really.  The transition from selling boxes and software to selling a pay-per-drink service is pretty complicated.  How will the service be built?  On what network will it run – theirs or somebody else’s?  How do they bill?  How do they provide support?  What about the resellers and distributors?  How much will existing revenue be cannibalized? With whom do they partner?

Those are just a few of the questions, really.  So it is no wonder some service providers and technology companies have been slapped around as ‘slow to market’ as Amazon and the like make money on cloud services.  Hewlett-Packard, which unveiled a new, improved cloud strategy last week, is a good example.  The venerable HP has been coming in for some bashing for a number of reasons over the past year, one of which was a less-than-clear cloud vision from a server and software powerhouse.  To get where it is today (a much more coherent approach, according to our own Principal Analyst Michal Halama: see HP Gets Its Act Together with Solid Converged Cloud Strategy), HP had to marshal the right forces from five different areas of the company, all with different starting points and corresponding agendas.  Now that it has its own story straight, it has to go about wooing and pursuing partners.

HP is just an example, and it is by no means alone.  Cisco has admitted that it lacked a strategy for a while, and only recently created a combined business unit that handles all aspects of collaboration, hosted or otherwise.  Avaya did nothing about cloud services for years, only recently stepping up with some thoughts.  IBM has been shouting about the cloud for a long time, but is criticized for really only delivering private cloud solutions. Global service providers such as AT&T, Verizon, BT and Telefonica are under constant pressure to demonstrate faster progress on their cloud initiatives.

Cloud-based computing and applications promise a transformation in the way enterprises structure IT, and the prospect is forcing suppliers to transform themselves as well.  With this in mind, when engaging service providers and technology suppliers on cloud services, be sure to grill them on how well they have their houses in order.  There is likely to be a lot of maneuvering going on behind the scenes, so get assurances you are a real customer, and not a guinea pig.

About Jeremiah Caron
Jeremiah Caron brings more than 24 years of experience to Current Analysis as a market watcher and influential voice in the telecommunications and information technology industries. As Senior Vice President, Analysis, Jeremiah is responsible for overall management and content direction for the company’s CurrentCompete services, and is part of the corporation’s executive management team. Jeremiah is responsible for monitoring and evaluating activities in consumer services, enterprise technology and software; network and IT services; and service provider infrastructure markets, focusing on the strategies and product development work of service providers, technology suppliers and solution providers.

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