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Moving from a Bacchanalian feast to a Cloud of Plenty
Dec 1 2016
Guest blogger Nick Booth explores the culture change from ISV to service operator
Whatever industry you work in, whether you sell property or proper tea, people will always talk fondly of a bygone "Golden Age."
Things were always better in the past. This is especially true of the IT business. By all accounts, IT was a bacchanalian feast just before I joined, and the IT suppliers were on the top table.
I think I said the same to people coming in after me. Looking back, if I knew I was living in a golden age, I can’t understand why I wasn’t happier!
Maybe it’s that same nostalgic mentality that makes today’s independent software vendors (ISVs) reluctant to adopt new ways of working. There must be some explanation, because logically they’d be far better off as suppliers of Software as a Service (SaaS).
Perhaps it’s fear of the unknown. Certainly, the cloud has created a few perception problems, with a sliding scale of incomprehension as you move along the spectrum from consumers to corporate CEOs. This gives rise to the misgivings and misunderstandings that have caused a breakdown in the relationship between trusted suppliers and their clients.
Software companies are case in point. The old relationship has changed. I can see why certain people liked it. The sales cycle was more gung ho in the old days. There was the thrill of the chase, as the ISV sent its best people out to pitch for business. There would be the adrenalin rush of being part of the pack (AKA the shortlist of preferred suppliers) and then the exciting climax of clinching the business.
In retrospect, it seems odd that companies would break out the champagne as soon as they won the client, because they hadn’t really delivered any product yet.
Maybe that assumption was a telling symptom of malaise. They hadn’t actually earned the money yet, but they acted like they had. After that, everything that followed must have seemed like an anti-climax. Sure, there’d be a honeymoon period, in which the ISV would send people to be with the client, installing, tweaking and hand-holding. Not the attractive smooth talkers who initially impressed the client, mind you. They would be busy making conquests in new territories.
After a few months, the project would be over, and the rest of the money would be collected, and the relationship fizzled out. The ISV would walk out the door and might never be seen again!
My friend was a "top salesman" (his words) for an Oracle partner, and he was constantly having long celebratory lunches, golfing trips and expensive car accidents. Glory days indeed.
You can’t help feeling this was a bit rough on the customers though. For many, the honeymoon period when the ISV was attentive was followed by a walkout that was more akin to an ugly divorce. Corporate lawyers would be called in and, once that happens, nobody wins except the attorneys.
In the settlement, the customer kept the database, and the ISV would walk away with some money. It’s the application that suffers most in these disputes.
The cloud has given the purchasers of business software more clout. But they still want a partner to hold their hand. Besides, they need that constant support if their database is to flourish and have healthy relationships with all departments.
For goodness sake, won’t someone think of the software?
The cloud model is best for both parties. It offers the ISV more stability. Gone are those crazy mood swings between feast and famine. Revenue is a continuous stream which offers both stability and higher income.
However, the SaaS provider has to work on the relationship. They have to be a good listener and responsive. This new consultative approach is much less antagonistic, which saves you from all kinds of wastage caused by misunderstandings. Assumption, as they say in counseling, is the mother of all calamities.
The modern SaaS provider is more like a marriage counselor, constantly fine-tuning the relationship between the client and their software. In order to adapt to this modern SaaS culture, you might need different types of staff. People who enjoy listening and thrive on good organization. The culture will change because there are smaller, more constant revenue streams.
Niko Mykkanen, head of partner channel strategy at Amazon Web Services, told Computer Weekly that in 10 years AWS has helped ISV partners of all sizes generate lucrative revenue streams in the cloud, with many winning large customer accounts from incumbent, old world, vendors.
In other words, as your rivals enter a divorce, you get to move in. Clients are often older and wiser when they start a new relationship on the rebound. They have revised their expectations from partners and realize the importance of communicating. They’re also a bit more proactive about monitoring, automation and management of their customer’s environments. You can’t afford to assume anything about your relationship. It’s a work in progress.
Better still, a SaaS relationship means there is no chance of the vendor muscling in and taking over.
Mind you, some people in relationships take diabolical liberties. You want to avoid sliding into a one-sided partnership where your unconditional loyalty and support gets taken for granted. But that’s the stuff of another article.
Nick is a freelance tech writer who wrestled with IT in the health service, financial services and the police (and saw the best and worst of its effects) before he moved into journalism. He still has nightmares about bringing the Metropolitan Police’s traffic system to a standstill, because his boss said he ought to teach myself about IT through trial and error. He is a freelance technology writer for publications such as Daily Mail, The Guardian, Data Center Dynamics, Microscope, and Computer Weekly.
Nick can be found on Twitter @ohthisbloodypc