Public Clouds make marketing internal IT to line-of-business a must do item
A couple of weeks ago I posted the first in a series of blogs on big things that IT teams need do to ensure that they remain relevant to their end users. In that blog, I introduced a list of seven things that IT teams should do to be successful. I also covered the first item which was providing self-service to end users for infrastructure and application services. Today I’ll pick up from where I left off and talk about marketing internal IT to line-of-business and the need to add marketing to the list of functions that should exist in every IT organization.
For reference, the list I discussed in my first blog is below:
- Implement Self Service for Resource Requests
- Market IT Services to your End Users
- Enable Infrastructure as Code
- Become an IT Developer
- Begin to Think about Multi-Cloud Networking
- Go Beyond Infrastructure and Deliver Complete Stacks
- Help App Dev Teams Move Containers to Production
Public Cloud Providers Want Your Companies IT Budget
Contrary to the way IT teams have operated for decades and the idea popularized by the movie “Field of Dreams “if you build it they will come” isn’t the way IT works – at least not anymore. The main reason for this is that when it comes to the delivery of infrastructure and application services, your end users have more options than they did in the past given the rise of public cloud service providers such as AWS or Microsoft.
These public cloud providers are not just offering services. They are spending money on marketing as well. And that money is directed at getting the attention of your line-of-business users. Exactly how much money they are spending is hard to say but according to this recent article in the Wall Street Journal, all companies on average spend around 7.5% of revenue on marketing. That’s the average of a lot of companies so let’s just focus on AWS and Azure.
AWS revenues were $12.2B in 2016 but since Amazon doesn’t break out marketing spend for AWS it’s not publicly known what their marketing spend was. However, Amazon marketing spend overall was 5% of total revenue. Thinking about AWS marketing, this percentage is probably light given that the average marketing spend for Tech Companies is around 15% of revenue (same WSJ article). But even at 5% that’s a healthy chunk of change targeting your company’s end users. Azure revenues are about a ¼ of AWS (best estimate since Microsoft doesn’t disclose these) so less to worry about here but still more marketing dollars aimed at getting the attention of your end users.
There are many differences of course between what a third-party vendor and what an internal IT team needs to think about when it comes to marketing. First AWS and Microsoft are targeting thousands of organizations – internal IT is likely targeting one. Second, internal IT has a bit of a “captive audience” advantage that AWS and Microsoft don’t enjoy.
Finally, if you step back and think about it, internal IT shouldn’t really be thinking of public cloud providers as competition at all since if they are doing things right these vendors are simply part of the services portfolio that the internal IT brings to the table for their line-of-business user. But this last reason presumes that internal IT has mastered the idea of being a broker of services and I know from first-hand experience that most organizations just are not there yet.
Even given these differences, whichever way you look at things, if internal IT teams want to be successful at positioning their services in a world where public cloud providers exist, IT teams are going to have to invest some percentage of their time and money on the function of marketing. Given this, it’s a good idea to look at what marketing is and what it means to do marketing as an internal IT provider.
Marketing and Internal IT Teams
If you Google the words “What is Marketing”, you’ll get loads of articles, videos etc. Most explanations of marketing will eventually get around to talking about the four “P”s – Product, Place, Price and Promotion. For our purposes, we are mostly concerned with the issue of Promotion. Specifically, “What is the best way for internal IT to promote the IT services they offer to their end users?
Since the competition is to a large extent AWS and Azure, let’s look at what they do first. Both have a web presence that makes it easy for their target buyer to understand what they offer; what problems their services solve; the process to purchase their services; and what their services cost. There web presence is also chockablock full of other useful things like videos, data-sheets, and white papers. So, with this as a starting point, ask yourself how good of a job does your IT Team do with its internal web presence?
I have to admit that my own company’s IT team does a really good job on this as it relates to infrastructure and application services. They identify the services they offer in very digestible language. Language that their end users can easily understand. They articulate what each service is and they provide the prices for the services they offer.
In some ways, they actually do a better job than AWS and Azure because they post on the site, not only the costs of the services they offer but also a cost comparison for equivalent services from AWS and Azure. That kind of data is extremely helpful to end users that are looking to solve a specific problem but are also want to be cost effective in the choices they make as well.
Another thing that all vendors strive to do is serve up a generous portion of customer case studies. Few things are as powerful from a marketing perspective as an end user raving about how great your services are and how they helped them achieve something fantastic for their own customers.
Internal IT teams need to the same. Bonus points awarded if the IT team can figure out how to tie customer case studies directly into their company’s mission. This way, a business leader who may not be super tech savvy can easily understand how the IT services that the internal IT team provides benefit their business strategies.
Finally, many internal IT organizations have access to some sort of companywide collaboration platform. Here at VMware, we use a technology based on Socialcast. Internal collaboration platforms are another great way to get the word out around the services that internal IT offers and the customers that are being successful using them. Access to this kind of internal communication channel is something that AWS and Azure don’t enjoy so take advantage of it.
Get the Right Combination of Product, Price and Promotion
Of course, for any marketing program to be successful you have to start with products and services that add value to a buyer’s life. This is especially true in B2B where the technique of appealing to an emotional need, so often used in consumer markets, is generally not that successful.
That is where the “Product” and “Price” Ps comes into play. All IT teams need to have processes in place that help them identify what are the right services to offer and what is a competitive price for those services. Many organizations have Business Relationship Managers that can play a crucial role in ensuring that the right services, at the right prices get developed but there are lots of other techniques such as surveys, focus groups, etc that can help an internal IT team figure out what services they should offer.
For an internal provider, getting the right mix across product, price and promotion is critical to achieving success. As an example, some time back I spent a fair amount of time with a very large ISV developing Security Software. The IT team for this company had launched a private cloud effort but had struggled to gain any real traction with their internal customers. During the first year of operation, the team never got above 400 provisioned VMs.
The core problem that this team relayed to me was that the first set of services they launched were focused on fairly narrow use cases that represented only about 20% of the environments they normally provisioned for their end users. This first set of services were also focused on use cases that were associated with some the most complex services they offered.
It took a bit of time but the team finally figured out that what they really needed to focus on. They realized that they needed to focus on offering simpler services and services that were requested over and over. Services that represented the 80% of the environments they routinely provisioned.
The switch in service offerings was a good start but addressing this issue alone wasn’t enough for their private cloud to take off. It wasn’t until the team began to aggressively market their services that things changed.
Once they added marketing to the mix of what they were doing, things accelerated rapidly and by the end of their second year of operation the number of managed VMs in their private cloud had increased nearly 10x. Moreover, they were adding nearly as many VMs per month by this time as they had managed that entire first year.
Marketing for this team meant everything I have discussed already but it also meant doing things like hosting events, lunch and learns, and using other vehicles to get their team members out in front of their end users. The team had also cultivated some strong champions within their lines-of-businesses that were now telling their story for them. So not only did they have strong customer references, these same references were also now evangelizing on their behalf.
On Deck: Infrastructure as Code
In the next blog we’ll switch back to things that are more easily relatable from a technology standpoint. We’ll look at how, as the data center becomes more and more “software-defined”, the techniques used to design and implement services look more and more like the things that application development teams do day in and day out.
It’s always important for IT teams to advance the state of the art in terms of how they deliver services and adopting practices around infrastructure as code definitely will help. But advancing your approach to service delivery will matter little if line-of-business users don’t know what the IT organization delivers in terms of services. That’s the problem that having a marketing function within IT helps address.
Marketing helps IT teams communicate the value that they can bring to the lives of their end users. There is a saying that you probably have heard that goes something like this: “If a tree falls in the forest and there is no one there to hear it does it make a sound?” From a physics perspective, of course the answer is “Yes”. There is a sound whether anyone heard it or not.
But if you look at this question more from a metaphysical standpoint I believe the answer is “No”. IT can offer the greatest services on earth but if their end users don’t know about them, then what is the point. Marketing is about making sure that your end users “hear the sound of the tree”.
Marketing is Necessary but Not Sufficient
A few last words on the need to have the right services. Even if IT has a great internal marketing machine, your IT organization will struggle if the services offered aren’t rock solid. When it comes to infrastructure and application resource delivery, IT teams need to invest in technology like a cloud management platform (CMP) to ensure that they can quickly deliver resources to their end users.
vRealize Suite is an enterprise ready CMP that can help IT teams automate and dramatically speed up the delivery of infrastructure and application level services – across private and public cloud, across traditional and cloud native services. It also provides enterprises with the capabilities that help IT effectively manage day two operations once services have been provisioned. If you haven’t already embraced a CMP approach to automated delivery and ongoing management of infrastructure and applications, now is the time to do so.