The New Decision-Makers

An IPED 2012 survey finds that when cloud service is an application like Salesforce.com, new buyers are primary decision-makers.

Further, there was no surprise in the findings that indicate sales to small business or lower mid-market customers may actually be accelerated. The accelerated sales cycle is a function of the customer with little or no IT staff who finds the lower total cost of ownership (TCO) attractive and is eager to pass on service-level responsibilities to a third party in an effort to dedicate resources to operations, or other competitive advantage.

What we did find interesting was insight into the enterprise customer, where the decision process has changed the most. In the enterprise, when the cloud or managed services solution sold involves infrastructure components including servers, storage or systems management software, new decision trends are visible. The trends present a training need for IT vendor and partner sales teams alike.

In the enterprise Infrastructure-as-a-Service sales pursuit, the average duration of the sales cycle has become longer and involves more decision-makers. The additional decision-makers include the chief security officer, who surfaced requirements to inspect the service provider or hoster’s security breach record. The CFO, who in the enterprise has traditionally been a decision-maker or influencer, is still involved, but has surfaced new decision criteria, in addition to standard return on investment and total cost of ownership requirements.

Up-front deposits, the portion of the transaction to be accounted for as operating expense and the portion accounted for as capital expense, show up as additional information required by the CFO to support the proposed infrastructure services decision. The CEO, who may or may not participate as a traditional decision-maker, emerges in a new role as orchestrator of a new decision process. This new decision process results from the shift of the IT infrastructure service-level burden from the CIO to an external service provider or hoster. As newer IT service providers emerge as vendors of these critical infrastructure services, new and nontraditional decision criteria, including a minimum service-level history demonstrated by the service provider’s history of service reliability, is then introduced to the sales process. As a result, a committee consisting of direct-reporting executives to the CEO emerges, replacing the traditional CIO decision-maker supported by CFO and CEO decision sign-off.

These new sales and decision criteria comprise the new enterprise managed or cloud services sales cycle. New or modified sales training curriculum, marketing messages and references specific to the decision-maker or influencer role are required. My request to IT infrastructure service providers: Help your resellers or white labelers by providing these materials as part of your partner program; it will help speed the sales process.

If you’re yearning for the good old days of a simple VAR transaction, stick with private cloud. Customers indicated private cloud solutions located in their data center look like standard IT procurement. Fifty-two percent indicated a desire to buy from their hardware vendor with 46 percent indicating they would also buy from their trusted solution provider.

BACKTALK: Contact SVP, IPED MarketBridge Alliance Rauline Ochs via e-mail at [email protected].