A Cloud Product Strategy Is not Enough

More than SaaSWhile the promise of new and large revenue streams for business software vendors is driving huge investment into developing cloud strategies it seems that there is much being overlooked in the process.

Building the cloud product strategy is just the starting point with a number of areas being sorely neglected and which will come back to haunt technology executives in the near term

As a part of a comprehensive roll-out, the following represents some of the items that should be addressed …

Most vendors will have existing legacy customers that will take time to cross over to cloud and there will still be a substantial demand from new customers that wish to stay with on-premise solutions.

The challenge here is how to build a hybrid sales channel that caters for both cloud and on-premise customers and where the customer can engage in an individualistic way.

For example a customer may want to review, test and purchase an on-premise solution through the web whereas another may want the same solution but wishes to engage a channel partner from the outset. The end result is the same but the path to the result is substantially different and needs to be catered for in the sales model.

For a cloud solution to gain substantial traction, the solutions available need to be comparable to those which are available in the legacy on-premise solutions. These solutions are made up of both the products from the vendor as well as complimentary products from their ISV partners.

If the ISV products are not made available in the cloud offering, it is likely that the customer will be unable to construct a solution to meet his requirements and thereby the vendor would risk losing the client and will not be able to convert existing customers to their cloud offering.

To achieve this, the vendor must provide the tools necessary to help the ISV integrate and deploy their products together with providing the relevant ecommerce solutions to promote, sell, invoice and collect payment for the ISV products.

While the vendor website in the past was adequate being an information delivery tool, moving to cloud products creates the demand for the website to now also provide ecommerce capability for the consumption and management of the products and ecosystem.

These ecommerce solutions are not the typical B2B or B2C type web-store solutions as they need functionality that will provide a solution to functions such as subscription billing, system provisioning, license management, multi-party transaction splits (e.g. commissions for channel partners), multiple sales channels, multiple deployment methods and more.

The ecommerce solution would also need to provide the ability to list and sell both the vendor core products as well as the ISV complimentary products to afford the customer the ability to build their perfect solution … much like an advanced AppStore.

At the same time, the cloud introduces an environment which puts distance between the customer and the traditional channel however the services provided by the channel are essential to the successful implementation of solutions for the vendor’s customers and unless the channel is engaged, the vendor will need to set up their own service resources which at the end of the day is very likely to set off any benefit derived from offering cloud products.

So while the topics covered here are not exhaustive, they illustrate the issues that need to be considered in conjunction with any cloud product strategy.

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