Tuesday, December 7, 2010

Cloud vs. Licenses

Been debating this for quite some time but it comes up quite often.
On one hand, some IBMers get paid on selling licenses, others get paid on Cloud initiatives.
On the other hand, as an example, Lotus Connections IBMers would prefer if clients bought licenses instead of LL Engage.
This short lived cannibalization of sales and internal posturing is not unique to IBM. Microsoft has similar issues, especially when confronted with losing major money from their #1 money maker, Office.
So what is a Business Partner to do? Naturally offer clients the best of what is available and make the proper choice. Not just select the one that pays more commission. And on that note, Cloud options pay much less, as if there was any doubt.

So what can the mothership do to resolve this dilemma?

One thing to do is compensate everyone, internally and externally, equally for the products. Really, what benefit does it serve to have it any other way?

Another option is to provide equality to all products and let the PC side be equal to the Cloud side. If someone owns one license, they should get one Cloud account for free. I understand this may reduce revenue, but this also provides an excellent way to work in the interim while companies try to decide their future directions, or more importantly when they will make the leap, if ever. Charging twice is just not a nice option.

Lastly, applications are needed. No offense to the great marketers out there, but just going to the cloud, without a real application, I do not consider social media or Office related tools as applications, doesn't have enough excitement by itself.

What would be exciting? Let your imagination run wild.


  1. Good to see that you have also observed the insanity that has evolved from a disjointed strategy coming out of a mega-corporation. There in lies the problem. IBM Chase opportunities without thinking through the ramification. Part of the solution would be to streamline their catalogue. Too many solutions and no sensibly co-ordinate way for it to play nicely together. As a result the customer is getting a mixed message and looking elsewhere.

    Bundling solutions together like getting cloud for free is one way to start simplifying the options you can present to a client. Right now I am seeing MS and associated BP's sell exchange + sharepoint as the lotus notes replacement into some large sites. We all know this offering as a notes replacement to be a complete fallacy. But it says a few things.

    1. MS solution is presented as something simple enough for Organisations to understand.

    2. It also demonstrates that clients don't know what they have nor know what they are getting into.

    3. Applications form part of the solution offered by the comp to migrate. IBM has no such offering for clients to stay. Just mail/chat/conference.

    The last point is what gets under my skin. It just borders on the realm of gross stupidity to ignore applications in their marketing. Or IBM has thrown up the white flag and just given up on the rapid application space and ignored the work going on with xpages. I know these are Gnarky comments, but this is the elephant carcass rotting in the room that no one seems to want to challenge out of fear of being ostracised. I would prefer to see a fit and proper discussion about it or at least someone debunk the perception.

  2. Giuliio,
    The problem is not just IBM, Microsoft, Oracle as well have similar issues.
    What to drop, what to go Cloud, what to comp people on and how.
    No one will sell what doesn't pay the bills.
    Organizations understand IBM/Lotus but they feel compelled to buy Microsoft, still, because they see everyone else as doing so.
    Customers usually have no control over what is bought because executive management makes a decision, end of story usually.
    The rest are CYA and their jobs.

    To be fair, neither Microsoft or IBM does very well at promoting add on applications or giving a reason to use version x over version y.

    They both have catalogs and links to apps, but if BPs don't care or leverage them or even have a discussion around applications then there is nothing to be gained.