Roughly two-thirds of small businesses have never heard of cloud hosting, according to a survey conducted by Rackspace. Frankly, I think the data is a bit misleading. And James Urquhart, market manager for Cisco’s Data Center 3.0 strategy, has a few opinions on the survey as well. Here are some perspectives.
In a blog posting on CNet, Urquhart offers the following observation:
“…what this survey shows is not that small businesses have failed to grasp cloud computing, but that “cloud hosting” providers have done a terrible job of marketing to that segment.”
I agree fully. Small business owners are not familiar with all of our industry jargon: Managed services, cloud computing, SaaS, virtualization, and so on. Most small business owners simply know they need a partner to host their Web site, host their email, potentially host their CRM and so forth.
Translation: Small businesses know they want an off-site partner to host their systems. But they may not connect the dots between a traditional hosting provider and new jargon like cloud hosting.
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Posted In: Software as a Service and Hardware as a Service
Tags: Cisco Systems | cloud hosting services | Hosted cloud services | James Urquhart | Rackspace
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Joe,
I have slightly different take on this. I actually see it as evidence to our thesis that most small businesses have to be serviced by a local IT Solution provider (an MSP). I do not think small business care about how these IT services are delivered. They just want to leverage IT as much as possible to run their business and as cost effectively as possible. I do not see any reason for a small legal firm or an accounting firm etc. to even try and understand what is the latest in IT. They neither care nor they will have the time to care. That is where the local IT solution provider (MSP) comes into the picture. These people have to act as their trusted IT adviser. That is the reason the MSP has to understand the client’s business and the requirements etc. and propose the best solution for them. It is the MSP who decides if using a cloud to deliver the solution is the most efficient thing to do. It is the MSP’s job to stay on top of the technology and improve her competitiveness providing better value for the money for her clients.
Needless to say marketing to this IT solution providers has been the strategy at our firm (www.vembu.com). I see it as somewhat futile to try and market to this two thirds majority who could not care less about what is the latest in IT.
Sekar.
Sekar,
I fully agree that small business customers don’t need to master IT jargon. But I do think it’s time for solutions providers to educate their customers using simplified, business-driven messaging.
I still receive dozens of marketing postcards per month from VARs who are pitching online storage pricing instead of the value of their SaaS/cloud services.
If you can share examples of Vembu partners that have really nailed their branding and go-to-market messaging, I’d love to hear more.
I agree that educating a customer, from a business perspective, not IT, is a fundamental role of a ‘trusted advisor’. Our clients don’t know what cloud computing is, not do they care, but they use it every day, thanks to us and our choice to provide them with hosted services.
The pricing enables more small/micro-businesses to take advantage of what we have to offer, but the value of SaaS is that the application maintenance becomes the responsibility of the host, and is centralized, and that the user gets the ‘latest and greatest’ version over a highly secure link.
While we’ve been able to offer a lower-priced/scaled-down version of our bundle, we still focus on the value of the offer, rather than the price….
Jim Van
Logicomm, Inc.
http://www.logicomm-inc.com
Jim: I’m down in Puerto Rico at the Kaspersky Partner Summit and your point — focusing on value rather than price — is a key theme her at the event. Any MSP that leads with price will wind up offering a commodity service… …