The last few weeks, diginomica team members have been undertaking a series of new vendor briefings, many with the topic ‘cloud’ somewhere in the discussion. In all those briefings, we always ask the same question: ‘What is your biggest challenge in closing deals?’
That might seem an odd question given the string of double digit growth results we’ve seen in the last reporting quarter. Even the incumbent behemoths have reported outstanding growth in this segment of their business.
The reason for asking this question is to test the competitive environment and to assess how well the vendor is communicating their value proposition back to prospective customers. It’s an important check box item with ramifications across multiple dimensions.
The answer is almost always the same and may come as a surprise: ‘No decision.’ I’ve yet to hear something like: ‘X vendor is kicking our butt and we need to solve that.’ The market is too immature for that to be the case in most segments.
In other words, the final decision to not opt for vendor A or B is rarely down to the results of a feature/function shootout (although that does figure in choices made) or even the field reports from customers already in flight with a comparable solution. It’s down to inertia.
If you lump mobile into cloud – as many are doing today rather than seeing it as something that is technically discrete – the picture is a little more murky but I sense that the results of a recent ASUG survey among its members gives a flavor of what’s happening in the field:
When asked about his perception of SAP’s mobility strategy, an ASUG member and SAP customer said: “I don’t know if it’s going to be the smoothest ride. But I am confident we’ll be able to stay with SAP and get there.”
This to me is a horrifying admission but one I’ve frequently heard in different guises and via different vendors in recent times.
When you dig beneath the surface of these kinds of statement it boils down to something like this: ‘For all the warts and all we have to put up with (name your vendor here), we aren’t going to seriously consider alternatives because our relationship with (name your vendor here) is such that we’ll get there – in the end. We may (and probably are not) ready to make a decision anyway.’ Really? Then why did you evaluate in the first place?
There is another factor in play here which is amply illustrated from a briefing I had in Detroit this week.
I along with colleagues spent quality time with Plex Systems (disclosure: consulting and content client.) There are many reasons to like the company and I’ll get to those in a future discussion but again, we asked the same question with much the same response. What was much more interesting though was a follow on discussion that had three parts to it.
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First, a marquee customer, which moved away from SAP to Plex some years ago, talked about how users drove their initial buy decision when the CIO was ‘somewhat skeptical’ about taking on Plex.
Today he says the company could not live without their solution because the plant floor is the hub of the business and where money is made and lost. Plex plays very well there.
Second, one of my colleagues brought up his favorite topic – sensor technology – wondering whether Plex has examples in that area. The answer from Plex was short, sharp and to the point:
‘Right here in the middle of the Rust Belt I can take you to maybe 20 examples where companies are making advanced use of sensor technology to get real time information in ways you couldn’t imagine just a few years ago. Many of these companies are on the bleeding edge of sensor usage.’
Third, and later in the day we saw a realistic mock up of a plant floor where a combination of sensors, barcoding and realtime reporting was brought together in software to control components and materials at a highly granular level to ensure complex and complete track and trace auditability from components into finished goods delivered. The solution is delivered on any device.
We asked about the possible inclusion of web services from FedEx or UPS as part of delivery tracing for invoicing or GRN tracing, we asked about peering through into supplier and customer systems. It’s all possible, even in complex supply chains.
Missing a trick?
So as we ended our day of discussions it occurred to me that what vendors really need to do is find those outcomes that matter to their intended customer. Show them what is possible in the context of things that make sense to them. If as is often the case in ERP, you’re looking at a rip and replacement, then vendors need to ensure that customers can see beyond the cost savings or whatever is initially driving the decision. They need to envision a future where over time, benefits continue to accrue from their original investments.
Buyers reading this will likely roll their eyes and sigh, muttering that they’ve heard it all before. And there is a great deal of truth in that. But the cloud model does something that few are aware of. It forces the vendor upon a path of continuing innovation, precisely because the subscription model demands they deliver more each day.
While many past cloud related conversations talked about security and the need for flawless uptime, those same conversations have moved forward. Now is the time to show those great customer stories and seek out the sex and sizzle that both capture the imagination yet are deliverable.
This is not entirely restricted to cloud. We saw this in the interest our Molson Coors story has held since it was first published and which continues to attract attention. It’s all about those nuggets that buyers crave to discover.
In the meantime, I see inertia, a hanging around for something to magically emerge or happen, as being an innovation killer. I am not sure that any company can afford to take that position and expect to compete effectively in the current competitive environment, regardless of technology choice. It just doesn’t compute.
Disclosure: Both Plex and SAP are premier partners at time of writing
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