Why Service — Not Technology — Is the Most Important Thing Your Cloud-based Company Can Deliver

March 28, 2012

I cringe a little bit when I hear people describe cloud-based technology and services as revolutionary.

What’s really revolutionary about it? As Jerome Lecat wrote in this VentureBeat article last November, cloud computing services first came about almost 50 years ago, and continued to evolve in the 80s, 90s, and 2000s with ASP and SaaS models. The modern cloud, quite simply, is just another metamorphosis of those concepts.

So, really, if the cloud is anything today, it’s evolutionary  —not revolutionary. More specifically, it’s created a major change in the way consumers view technology and service, and how companies deliver those things.

For example, if I wanted to install a CRM system in the 90s, I needed to provision the hardware, the operating system for that hardware, and the actual CRM software. But that wasn’t all. I’d also have to deploy it and customize it to my particular needs.

In that way, the technology was hugely important. It was the key differentiator that separated two similar offerings.

Today, the game has changed. If I want to install a CRM now, I can go online, register for a service, immediately access the CRM tool via the Web, and customize the interface to suit my needs. And I can do all that in minutes, not months.

That’s where the evolution — or what some call a revolution — has occurred.

Customers no longer care about the hardware, the technology, or the underlying software that makes it work, because they never see any of them. They don’t care about the database or the infrastructure, or how the technology is hosted, managed, or maintained. They care about one thing: Whether the company they sign up with can deliver a service that resolves their pain and meets their desire ‑ all with round-the-clock availability, outstanding support, and an easily customizable user experience.

In that way, your solution is no longer differentiated by its technology. Differentiation today is all about the service you provide.  To take that point a step further, differentiation today is all about the user experience you provide.  By user, I mean the buyer, administrator, actual user of your product.

On Thursday, March 29th, I delivered the keynote speech for the Mass Technology Leadership Council’s breakfast seminar titled: “Finding the Right Way to the Cloud: Measure, Manage and Monetize for Success.” As you might guess, I dove  into this topic a little bit deeper.

More specifically, I focused on why cloud service providers can’t efficiently manage, measure, and monetize their solution by trying to sell it horizontally to every kind of customer. Instead, they need to sharply focus on a particular customer need, fulfilling only those customers’ requirements (outstanding service, support, customization, and availability).

In other words, as a cloud service provider, you have to segment.

Market segmentation has become one of the most important criteria of success for cloud-based providers. By honing in on specific types of customers with common pain points, desires, or needs, you can shape your service to suit them, without having to reinvent it entirely. The best cloud companies today are able to do that.

The best cloud companies are also sharply focused on their distribution economics, optimizing the relationship between customer acquisition, onboarding, support, retention, and upsell. Additionally, the best of the best understand the key metrics that allow them to gauge their performance against distribution economics, and use content marketing to drive awareness and lower the cost of customer acquisition.

Of course, the key to doing all of those things well is first acknowledging that the cloud has quickly evolved away from technology and toward service. Once you do that, you can focus your resources on the things that really matter (Hint: As I mentioned above, it’s not your hardware, software, or elaborate database).

How are you adapting to the “new” cloud environment? What are you doing to deliver the kind of superb service that your customers expect?

The Chief Executive Officer

Firas was previously a venture capitalist at Openview. He has returned to his operational roots and now works as The Chief Executive Officer of Everteam and is also the Founder of <a href="http://nsquaredadvisory.com/">nsquared advisory</a>. Previously, he helped launch a VC fund, start and grow a successful software company and also served time as an obscenely expensive consultant, where he helped multi-billion-dollar companies get their operations back on track.