Your Value Proposition Should Be Obvious

So many IT-as-a-service providers seem to be intimidated by approaching enterprise IT organizations with their value propositions.

They seem to be concerned about being cheaper, or competing with the established IT organization.

Well, let me offer you a different perspective ...

My Usual Day Job

I've been at EMC for 15 years.  Because of who I am, I am always having a *lot* of customer discussions.

I get to meet the enterprise IT organizations that many SPs want to sell to.  Literally several hundreds over the last few years.  Perhaps several thousand over the course of my career here.

Sometimes it's with the storage guys, or other technology disciplines.  Not infrequently, more senior people involved with overall infrastructure or operations.  And occasionally, CIOs and their direct reports.

So many interactions, in fact, that I can safely draw conclusions about the state of enterprise IT today, and what sort of propositions they might be interested in.

So, What Am I Seeing?

To start with, I meet many smart, well-organized and proficient IT organizations on a regular basis.  Simply put, they have their challenges, but they've got a good thing going.  They are as proficient as anyone in the industry. 

They will likely be slow to adopt external IT services, simply because they are so good at what they do.  Or, if they do, they will be very judicious in how and where they use external services.

The real opportunity is in the other part of enterprise IT. 

These are the good IT people who struggle to keep up and do the right thing.  But they're falling further and further behind.  Whether it's too much work, not enough resources, not enough critical mass of skills, questionable leadership, multiple technology and industry transitions in play, etc. -- the root causes doesn't really matter.    The picture isn't good for them, and it's unlikely to get better.

Despite everyone's best efforts, they're not keeping up with the business.  Sooner or later, something is going to have to change for them.  And we're not talking about some quick tactical fix, either.

They're going to have to completely re-evaluate how IT services get delivered.  The old model isn't working.  And there's not enough incentive or motivation to make the internal structural investments needed. 

Proportionally, I see more and more IT organizations falling out of the first category into the second category -- and the pace seems to have accelerated as of late.

Changes In Perception

When there was a skills gap in IT a while go, we saw the rise of professional IT staffing firms.  Wipro, for example, did very well here -- use contractors to augment full-time IT staff.  Indeed, it's not unusual to find more contractors working in an enterprise IT organization these days than full-time staff.

Originally, I saw a lot of resistance to the idea that external resources should be used to complement internal ones.  I'm sure there was a lot of talk about "saving money" at the time, but -- ultimately -- it proved to be a far better way to source critical skills than the old way of doing things. 

These contractors are usually very good at what they do -- otherwise, they're gone.  Career Darwinism at work ... :-)

Well, guess what?

Many of these challenged organizations are showing more receptivity to external IT services from service providers than I've ever seen before.  And, like before, there's strong resistance to the idea that external resources should be used to complement internal ones.

And, as before, there's a lot of talk about "saving money", but -- ultimately -- it's going to prove to be a better way to source critical IT services than the old way of doing things.

These service providers will have to be very good at what they do -- otherwise, they're gone.  Service Provider Darwinism at work, don't you know?

The Bottom Line For SPs

Folks, I firmly believe that the IT-as-a-service proposition -- be it IaaS, PaaS, SaaS or XaaS -- is not about cheaper IT, it's about better IT.

The new generation of service providers can offer a wide range of IT services that are far better -- in multiple regards -- than anything that can be done internally.  And I see this is true for an ever-growing population of stressed IT organizations.

So when will SPs recognize this, and learn to market themselves as 'better' rather than merely 'cheaper'?