The appearance of disruptive cloud solutions has evoked a paradigm shift in terms of how software is purchased and consumed. Previously, the IT department purchased infrastructure and solutions and the business was forced to use it as provided. Today, businesses select cloud solutions according to their needs and often rent them without consulting the IT department. Such a change in buying behavior requires rethinking how software is sold and delivered.
To evaluate the changes that have an impact on the transition from selling on-premise to cloud solutions, Zdravka Stoeva conducted a qualitative study over the course of her master’s thesis. This article presents a summary of the views of ten professionals who have both bought and sold cloud solutions.
From the IT department to the line of business
Cloud computing technology has improved significantly over the past 5 years, an occurrence which has raised the competition between IT solutions to new heights. As a result, economic factors have become more important than technical ones in the purchasing process, which helps explain why lines of business have increased in importance. Since line of business buyers are more familiar with their businesses than they are with technology, the sales pitch needs to focus on the value a solution will bring to the customer business model. Another reason for the increased sales focus on line of business buyers is the fact that cloud solutions are paid for in a fundamentally different way. While large upfront payments for on-premise solutions are recorded on the balance sheets as capital expenditures (CAPEX), subscription service costs come out of the operational expenditures budgets (OPEX). This facet of corporate accounting allows line of business heads to bypass other decision-makers, in particular the CIO, when making major purchasing decisions for cloud solutions.
From powerful sellers to educated customers
With widespread access to the internet today, the balance of power between buyers and sellers has shifted dramatically. Customers do enormous amounts of online research to determine exactly what their businesses need and then compare offerings. As a result of these online searches customers enter the buying process much more informed than they used to—and vendors have fewer opportunities to meet with customers face-to-face. Companies therefore need to leverage marketing automation and analytics tools to get to know customers rather than relying on personal conversations. A variety of tasks originally allocated to sales employees are either fading into the background or have disappeared entirely. In order to develop and leverage personal relationships, sales people need to build up their individual online presences on social network platforms such as LinkedIn and reach out to potential customers online in addition to conventional personal communication.
From marketing fluff to fact-based content
Maintaining a strong online presence and providing educational materials are essential for succeeding in online sales. Vendors need to demonstrate how they will benefit the customer’s business with convincing facts and figures and provide insights into trends in the customer’s own industry. Suitable formats for this content include whitepapers, customer success stories, case studies and blogs. The online presence of a solution provider serves as a sort of digital sales representative; it provides the first impression of the solution provider and is always there to provide useful information. In addition to social media accounts and webpages that customers can interact with, web analytics tools in the form of IP tracking, user opt-ins and shared cookies afford a great opportunity to learn about customers. Every time customers search the internet, they leave behind highly valuable clues that can be pieced together to gain insights, including whether or not they are ready to make a purchase.
From on-site demos to free trial versions
Back when on-premise was the only option, on-site demos provided the only way of familiarizing customers with solutions. Sales people had to invest extensive amounts of time customizing and preparing demos. Today, in the era of cloud, customers prefer to use trial versions of the software in order to learn more about it, often experimenting with more than one solution at a time. With familiarization now in the customer’s hands, direct communication with the vendor has faded into the background. Free online trial versions also simplify buying processes that include several decision-makers. By ensuring that each decision-maker has individual access to the cloud solution, different features that are relevant to specific roles can be more thoroughly explored. Having the ability to test and discuss a solution’s properties in-depth as they relate to individual responsibilities, helps buying centers to make more informed decisions that result in higher customer satisfaction.
From technology-heavy customization to infinite scalability and automation
As opposed to traditional on-premise technologies that merely support businesses, cloud solutions act as business enablers. Rather than focusing on the technical aspects of the software, cloud providers focus on the business needs of the customer in order to demonstrate the value of their solutions. The sales, marketing and value delivery processes of the customer’s business are paramount to the cloud solution provider’s success. And with customers demanding solutions that can grow according to their needs and pricing models that reflect their usage, cloud solutions allow for almost infinite scalability and flexibility.
In summary, to succeed in the sale of cloud solutions providers need to educate lines of business heads with fact-based content marketing. Other decisive factors include free trial versions and cloud solutions with a high degree of scalability and automation. IT solution providers who focus their efforts on maximizing business value for their customers will also maximize the value of their own businesses.
This article was written by Zdravka Stoeva, Magdalena Pfurtscheller and Dietmar Kilian.
Zdravka Stoeva, MA has a master’s degree in management, communication and IT. She is passionate about emerging technologies and is a sales representative for Barracuda Networks where she works on cloud solutions, application delivery and security services.
Magdalena Pfurtscheller, MBA, MA is a business analyst at PDAgroup GmbH. Since completing her MBA in the United States her consulting focus has been on the digital transformation of businesses and in particular the transition of IT providers from selling on-premise to cloud solutions.
Prof. Dr. Dietmar Kilian is a professor of Business Process Management and Networks at the Management Center Innsbruck. He is also the managing partner of PDAgroup GmbH and chairman of the supervisory board of Academy Cube gGmbH.