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05.15.2011

Tale of 2 Panels- The Cloudy Future Of Enterprise Tech Sales

A couple of weeks ago, I had the privilege of attending the Goldman Sachs Cloud Computing conference in Menlo Park, Ca. Goldman put an amazing group of companies and execs on stage. Particularly interesting to me was the conflict in opinion between the “Selling SaaS to the Enterprise” and the “Empowering the Clouds” panels when it came to the topic of the Enterprise sale cycle and process.

The first panel had execs from Workday, Apptio, Appirio and Zuora. The execs from the first 3, took the position that SaaS has NOT fundamentally changed enterprise sales. I am not a reporter, but the net of their position was, “We are still doing large deals, the cycle is still 6 to 9 months, nothing has changed”

The second panel had execs from PaaS providers Engine Yard and Joyent, and automation PaaS provider RightScale. Not surprisingly, these folks, who tend to target developers, saw that the dynamics have and are changing to shorter, trial and experience driven selling cycles. They see developers log in, code and deploy, and boom, there’s a sale. Short, sweet and fast. John Dillon, CEO of Engine Yard was emphatic in declaring that the enterprise sale was coming to an end.

I have blogged recently about the transition from evaluation to experience go to market, and so I definitely lean toward the second panel’s view. Successful SaaS and PaaS and IaaS providers understand the power of experience to start, accelerate and end a sales cycle.

Now certainly, many of the SaaS providers on the first panel, rightfully point out that successfully implementing a ERP or CRM or IT Portfolio management Service requires more change within the organization, which is really NOT related to SaaS vs. Software. Change in large orgs comes slowly and with pain. However, Chris Barbin of Appirio did agree that SaaS has shortened the time and cost of prof services in support of these implementations, and in fact is building his business on these types of $100K range projects vs. the old Accenture/EDS style $Ms of dollars projects.

We are in the 5-6 yr of the cloud computing transformation, the early SaaS successes (eg. Salesforce.com, Netsuite, Workday and Successfactors…) took the enterprise sales model and replicated it with SaaS Services.

However, next generation successes like Box.net, DropBox, and those we haven’t seen yet, will likely disrupt these first generation successes with new sales and marketing models that fully leverage the power of experience. This, I believe is the future of Enterprise technology sales.

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