Beware the “C” word…

Over the last few days, I’ve read a selection of articles from some so-called “leading” tech journalists who continue to position “cloud” and “cost savings” firmly in the opening sentences of their respective copy, baiting the target audience into joining their supposition that at the end of the unicorn rainbow, lies indeed, the proverbial pot of gold.

Personally, aided by numerous years of running large enterprise budgets, previous blog posts on the topic, practical experiences of cloud deployments and a posthumous hat tip to one Stanley William Jevons, I have made the mental switch from “how much does it cost?” to “how much value does it bring?”

The latter, I believe, is often more difficult to quantify due to value often being talked about, though much less accurately measured or understood, in terms like direct and indirect – yet cost, generally, remains central to most tactical and strategic decision making processes and is certainly tangible to any organization, irrespective of size or stature.

While many of today’s traditional enterprises are in a relatively early stage of cloud adoption (whether that be private, public or and a combination of the two), they will undoubtedly be using “cost savings” as a driver as they plot their way through the many waypoints on the journey. However, there is another “C” word that is waiting in the wings, ready to spring a few unwelcome surprises as the enterprise bravely plows these new furrows.

Consumerization.

Now, unless you’ve been in under a rock for the last few years, it would be quite difficult to have missed the incredible growth in consumer driven technology and devices, along with a continued downward trend in the cost of acquisition. Even prior to the smartphone revolution and arguably at the start of the BYOC rush, there was a marked dive in the cost of “consumer-grade” laptop and netbooks, many of which were of a sufficiently good specification to meet the needs of many users.

Yet many enterprises remained stoic, rigid and largely unwilling to fully embrace an all-encompassing BYOC strategy, citing a myriad of reasons why this approach would be doomed for failure. Instead, they prefer to continue down the path of delivering users what they think they need rather than what the users actually want and at a cost point that often didn’t sit well with what those same users were seeing in the non-work environment.

In the recent past, I’ve had, and heard of, several discussions with folks inside large organizations who had a chargeback model for hardware. The question raised by cost-conscious staff dotted around the business goes something like “so, why do you charge me $350 per month for a laptop when I can go to Best Buy / PC World / Delete as applicable and buy one for that price?”

Of course, there is probably a very good answer for this, and, from my experience, it usually stems from either a) a lack of understanding on behalf of the end user of what constitutes the component(s) of the cost or b) a lack of basic transparency of the IT department and their inability / unwillingness to explain the cost model.

Either way, the aforementioned laptop, available at a consumer price point, is a clear example of how the consumer space is driving business demand and not, as has been the case historically, the other way around.

This “phenomenon” doesn’t stop at hardware. In my current world, I am fortunate enough to be working on a very interesting strategy for combining business challenges with API technology and mobile applications, for big enterprise consumption.

Cool stuff. Yet, in this current world, emerges a new challenge – how do we take the historic world of “traditional enterprise software development” with its long tails and relatively high upfront and running costs and deliver enterprise mobile applications, to devices that are consumer grade, at a price point that echoes what the end user would find in the Apple App Store and the Android Marketplace?

I ask the above somewhat rhetorically, for now.

As you likely know from your own experience, low price points and high numbers of downloads are the basic principles of success for commercial mobile application developers. I have rarely paid more that $9.99 for any given application – but can that expectation realistically translate into the enterprise? What model would look attractive to an end user of an enterprise mobile application? How can we compete, irrespective of whether we plan to deploy in a private enterprise app store?

In the same way that the $350 per month cost of the laptop often includes many components of the upfront acquisition, licensing, management and support costs, I fear an even bigger challenge is coming to enterprise mobile applications. Where smart organizations are lining up to enable their businesses, they must figure out how to set realistic expectations and internal price points that allow internal (and external) business opportunities to be turned into mobile application products, before end users find their own ways of working that marginalize internal development teams and IT organizations in general.

This isn’t a command and control discussion, it’s a basic alignment principle. There’s more than a fair chance that your initial foray into enterprise mobile apps will require some kind of connectivity to your current enterprise app / data silos. Your workforce simply can’t find commercial applications to meet all their needs. Fact.

I’m already convinced (having seen it first hand) that BYOA, Bring Your Own Applications, is upon us. Mobility shifts the paradigm to the other end of the spectrum from the “locked down desktop” of yesterday. It’s easier for users to acquire, use and be productive with applications that are available to them at giveaway prices and it’s far easier to install them on devices that they own and pay for.

How much would you expect your IT department to charge you for any given mobile application? Don’t know? If that’s the case, then maybe you’re focusing on the value, rather than the cost.

I hope so, because I’ve never heard of a really successful solution that began with a discussion about how much something cost. 

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4 thoughts on “Beware the “C” word…

  1. Beyond the realities of the consumerized world, I left this post with your one important take-away that spans far beyond the scope here:

    Focus on the value. Don’t get sidetracked by the cost.

    Definitely applies to tech, IT, BYOD, CoIT and the rest of the alphabet soup, but it doesn’t end there. I feel like I just cracked open a really good fortune cookie. Thanks, Christian!

  2. Personally also believe that Bring Your Own Application (BYOA) is the next step in the consumerization trend, specifically during company mergers. The direct value of BYOA I see is that usability of an application is highly linked to the users knowledge of the application. Allowing employees to work with the application they prefer increases the efficiency of those users.

    As usual, the first applications will be the once that offer standardized functionality like CRM. Only challenges are cloud integration, enterprise security and data integrity. I´ll do a blog post on this later this month.

  3. The most interesting conversations with prospects and clients happen when we focus on value, helping them paint a picture of how things will be when they’re more agile, when processes are more automated, when they can focus on their customer rather than running an IT maintanence team. Cost is usually a factor but it’s never a focus.

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