It was reported today by the BBC, that Google has signed up Spanish Bank BBVA to a corporate-wide deal whereby the bank will transfer to Google all of its software use for internal communication, collaboration, and various organizational applications.

The move to the cloud by a commercial bank is a watershed moment in cloud adoption in terms of security.  But the motivation underlying BBVA’s move is equally important - the move to cloud is a migration to value.

The Cloud is Secure

BBVA made it abundantly clear that they are not moving any client data to the cloud, but limiting the use of the cloud to purely internal purposes.  Across their 110,000 staff in 26 countries, they will be using GMail, Google Docs, Google Calendar, Chat, Video Conferencing, etc.  If we think about this for a second, and consider the approach BBVA would have taken to moving their internal processes to the cloud, there would have been two fundamental conclusions BBVA’s IT team and executive management came to:

1. Security is not an issue.  The Cloud is secure.  We know it, we’ve tested it, and it’s secure.  We should move forward.
2. Our customers don’t understand the cloud and don’t 100% know if it’s secure or not.  We have to draw a line with our client data until that public perception issue is solved….because we’re not going to resolve it.

Cloud for Cultural Change and Value - Not Price

From the beginning, most vendors in the Infrastructure as a Service (IaaS) segment of the cloud stack have been promoting the idea that a move to the cloud is essentially about price - lower IT costs, scale compute on demand, migrate capital expenditure to operational expense, etc.  This has always been a risky strategy in my mind as you play the cloud industry out over the long term.  It’s essentially commoditization from birth.  Companies like IBM and HP coming into the space will hopefully begin to create a value-based tier in the market, but I don’t think we started in the right place.

This is why ABVV’s motivation is so important.  According to Carmen Herranz (Director of Innovation….great title to have within a bank!), the reason they’re making this move is to initiate “a cultural change within the company” to get “the whole company working together”.  Specifically, the goal is to “promote innovation” and “increase productivity” across the entire organization.

The bottom line is not the “bottom line” - it’s the top line.

Class Structure with the Cloud Stack?

Another way to look at this proclamation by a serious enterprise user is to consider that a “class structure” is developing within the cloud stack.  It shouldn’t be a surprise really.  The model is not a new one.  Consider the market capitalization of ARM, developer of the processor IP (essentially software used by chip manufacturers) that goes into all (pretty much) of our smartphones, at $12.11B; Intel, manufacturer of processors that go into the servers that power the cloud, at $135B; Rackspace (although not the #1 player in IaaS, Amazon does not break out AWS numbers from their annual report, and so the market cannot decide the value of that business in isolation) at $5.53B; Apple (we all know who they are), at $390.10B; and Google (ditto) at $201.88B.

It’s a simplistic analysis, but essentially the higher up the stack you go the greater the perception by the market of the delivery of value.

The reason so many of us have been working diligently to bring the cloud to reality is because we have always seen the value of the cloud.  Unfortunately, too many have been selling on price.  Hopefully this equation will start to become more nuanced as we move forward in this exciting space.

Posted under cloud

There’s a very thought provoking post by Bruce Wedderburn (EVP Channel & Enablement, Huthwaite Inc.) and re-posted by Donal Daly about how rock star sales people will best perform in 2012 within the rapidly evolving online environment.

The traditional method of sales engagement (and as Donal puts it) followed these steps:

1. Diagnose the customer’s pain
2. Uncover their needs
3. Craft a targeted solution that meets the customer’s stated needs

Traditionally there was a good chance that a sales person would engage with the prospect very close to the beginning of the buying process - or ideally initiate it. This was especially the case when the customer was somewhat isolated and got a great deal of their information from trade shows and their trusted vendor sales reps. When this was the case, the conversation would start from the beginning of the investigation and the sales person could move the prospect through the process by asking really good questions and engaging.

As the business environment accelerated, and the proliferation of information on the web went through the roof, the timing of the engagement and the model for engagement has shifted tremendously. Although I couldn’t find the original report that Daly quotes, there was a study done by the Marketing Leadership Council that found that of the 1,460 respondents in their survey, vendors first contacted the prospect when they were already 57% of the way through the purchase decision making process. At this point of the engagement, the traditional sales person is in a bad position looking to explain features and essentially offer discounts.

Merging the Disciplines of Marketing and Sales

What this calls for is what we’ve already seen emerging in a number of companies and industries out there - a closer integration between marketing and sales, and a merging of the two disciplines within the sales process.

As the prospect is already gathering information and evaluating solutions on the web, marketing needs to be creating materials and making available opportunities for engagement where the customers are. This falls into two modern disciplines of Social Media Marketing and Content Marketing.

This evolution takes the marketing person beyond the role of branding, awareness creation, and lead generation, and well into the space of lead qualification and education. In effect, the marketing person is doing far more “selling” than they used to. To put it another way, the role of marketing is evolving into what has been traditionally been referred to as “inside sales”.

The Impact on Software Sales

The impact of this trend on software sales is profound. For those companies that still organize their marketing efforts around tradeshows and press releases and only dabble in social media, a huge hole in the sales process opens up. Fewer leads are generated and the sales person is constantly in “discount” mode as they try to “sell” a prospect that’s highly educated and has not been engaged until late in the process.

Counter intuitively, a trend that was prolific in the first decade of the century could also be having a detrimental effect on the process - the free evaluation download.

Once thought to be a great lead generator, this vehicle has not been the silver bullet everyone had hoped.

• IT departments of customers often don’t allow downloads
• Large applications take literally hours to download
• Self-guided installation and setup is rife with problems damaging the prospect of a sale
• After the download, the software vendor has zero visibility into how the prospect is using the software or if they’re using it at all
• The use of dummy email addresses and phone numbers with automatic downloads leaves the vendor with no visibility and no lead to follow up on

In the best case scenario, the prospect has downloaded the software, tried it out and formed an opinion before the sales rep even calls on them and engages in a discussion.

The Cloud as an Engagement Platform

By enabling prospects to securely access and use software installed on the cloud in a self-serve fashion the marketing team will have the engagement platform to efficiently perform the enhanced role of inside sales.

Marketing people will have a self-serve environment where newly created content can be placed alongside the latest version of their software.  They will have a single destination to which they can drive prospects as they engage with them on Twitter, LinkedIn, Facebook and blogs.  As prospects take themselves through the education (sales!) process, the newly minted Inside Marketeer/Sales Person will have visibility into how the prospect uses the software, analytics by which to qualify them, and communication tools by which to engage them in realtime.

Key attributes of the cloud platform are:

• No downloads, so IT’s happy and so is your customer
• No installation, so your customer has a good experience crafted by you
• Detailed analytics and automated analysis of activity and software use to automate the inside sales process
• Configurable degrees of screening to ensure every lead is validated against a list of prospects

(Not by coincidence, these are primary features of the Xuropa Software Sales Platform with integrated Intelligent Sales Engine™.)

How have you seen your customer engagement model evolve? How has this impacted your organization and your hiring practices? There’s a lot to consider in this very real trend in the evolution of sales.

Posted under CRM, Sales Automation, Social Media Marketing, cloud, software