(I’ve had the chance to meet with quite a few customers, partners and industry pundits over the past several months, and this is the first in an ongoing series where I’ll share some of what I’ve learned — along with a few of my own observations.)
Fact: cloud computing and on demand solutions are here to stay and will only grow in importance. There is no disputing the growing relevance and value customers are deriving today and will realize tomorrow.
25+% compound growth — and growing according to IDC, Gartner and other analyst firms
The ability to leverage commercial cloud infrastructure to significantly reduce operating costs by virtualizing on-premise systems
Solutions that are easier to buy, deploy and use – a fundamental and welcome shift for the software and IT services industries
The ability to help people work much more effectively together to drive specific business outcomes
As importantly, the onus is on vendors to manage the customer and solution lifecycle. It’s about time that we’re on the hook to monitor, manage and administer these systems. This time, we’re responsible for lifecycle management, and this is driving a great deal of innovation that ultimately reduce the cost of provisioning and managing these systems. That’s good for everyone… including customers who will inevitably continue to deploy and manage or have a service partner host their own packaged applications.
But is this a panacea? Is software really dead? Most of the customers I talk to don’t think so.
One thing I have learned from working with hundreds of small and midsize companies is that one size or approach doesn’t fit all. This is even more evident when I talk to CIO’s of larger firms. There are real and fundamental reasons why companies continue to purchase, deploy, and even customize packaged software on-premise or via hosting partners, including uniqueness in their value chains, specific requirements in their industry, or a myriad of complex regulations across multiple countries.
Will on demand and cloud computing represent the only means for customers to consume software and services? I’m convinced the answer is an emphatic no. That said, this is a fundamental shift in the market and a key part of the future of this industry and how we deliver value to all types of organizations and the people who run them. I’m betting my career on it.