I’ve heard a lot of buzz lately saying that 2009 is Cloud Computing’s year but have yet to see any direct indications of it myself. Don’t get me wrong, I’m a Cloud fan but 2009 is going to be a tough year for Cloud Vendors with businesses sorting out how much money they really have to spend for new technology purchases and support. Alternatively, businesses could realize that Cloud Computing will save significant amounts of money and flock to the Cloud for refuge. But who’ll rise to the top of the charts and how will they do it?
As we head in to 2009, vendors will feel the brunt of the economic downturn and begin to drop prices as competition heightens for a limited number of solvent customers. I’ve often said that if your only sales technique is to use price as a negotiating tool, then you’re not selling. To prevent a price war, vendors will have to differentiate themselves and their offerings from those of their closest competitors.
Separate yourself from the pack so that you can stand firm on your pricing model.
Vendors who wish to survive will pump up their advertising volume and allocate much of their profits to strutting their stuff in print, through online, and media ads. If you aren’t visible (or audible), then your potential customers won’t know you exist and may not trust someone with whom they aren’t familiar. Repitition often creates more hits than clever lyrics or fancy beats.
Create and maintain your presence in the marketplace by finding out where your customers are and putting yourself in front of them.
Vendors will discover through a tough educational process that there is a limited number of “big fish” in the potential customer pool. A focused effort on solving the problems encountered by small businesses is a very lucrative business market. Small businesses need innovative ways to pare expenses, operate more efficiently, and concentrate on the thrust of their own business. This is the opportunity for vendors to swoop in and offer themselves as business “saviors.” For their own survival, vendors need to focus more on small businesses and getting them to use Cloud services.
Focus on solving problems for potential small business customers and not just selling them your “beat to fit, paint to match” packages.
2009 will see its share of vendor consolidations. Cloud vendors who have something to offer but no clear business model or customer focus will see themselves gobbled up by larger vendors with less innovation but more cash. Consolidation doesn’t have to be a four-letter word — it often has positive consequences for shareholders and customers alike.
Keep your eyes and ears open for companies ripe for assimilation — it could mean big investment profits and a significant service boost to customers.
My Cloud Computing Vendor Predictions for 2009
The Primary Selling Point Will Be Price
Advertising Budgets Will Consume Most of the Profit
More Focus on Small Business
New Players Enter the Fray
Cloud vendors seeking strategic partnerships will find themselves plenty of fodder for such collaborations in 2009. As profits shrink and competition stiffens, you’ll see more announcements of vendor team-ups and customer sharing. The big winners will be the customers who’ll benefit from the added expertise and boost in service level. Don’t expect those added efforts to be free though — cheap maybe but not free.
Partnerships are a clever business strategy but keep tabs on your tab.
As the demand grows for Cloud-based services, so will the number of solutions from which to pick. Startups will spring up from every corner of the planet to try to cash in on the Cloud-Computing fray. Most of them will assimilate themselves into larger companies, some will remain defiantly independent, and a few will shutter their virtual doors completely. Expect new and surprising innovations next year from these startups.
Watch for innovative new companies to pop-up and offer the moon for a song.
Keep an eye to the sky in 2009 where you’ll see frenzied activity in the Cloud Computing space where new services, new companies, lower prices, and beneficial partnerships await you. There’ll be new companies worthy of your investment in both time and money — watch for their ads.
When considering a Cloud vendor for your own services and infrastructure, remember to negotiate for what you need and not what they want you to have. Playing the same old song and dance just won’t cut it in 2009. Finally, don’t be afraid to consider multiple vendors for your services and to fully enjoy what the Cloud has to offer you and your users.