4 ways IT can rise above outside cloud competitors

Summary:Increasingly, IT departments are competing directly against outside cloud providers for their organizations' business. How can they offer far greater value than a monthly subscription plan?

To survive and thrive in the coming years, information technology departments need to run as businesses with businesses. Prime competitors will be outside cloud services and they will stop at nothing to grab an organization's computing business.

Data Center at CERN 2 -photo courtesy of CERN Press Office
Image: CERN press office

The question is: Will decision makers be swooned by the siren song of cloud, with its low monthly payments and promises of simplicity? IT departments don't have to take this lying down; they have many advantages to offer their internal customers via private cloud. But these advantages need to be sold, and be packaged as something of far more value than the outside cloud service.

True enough, outside providers know precious little about the business. But the business may not be listening to the voice of reason as they subscribe to every service that comes along.

Scott Bils, managing partner at Leverhawk, offers four bits of advice on how to position corporate IT as a competitive business.

Offer design services

"It’s not enough to just build a private cloud and let it loose," said Bils. "Just as Amazon or Rackspace does, enterprise IT needs to identify the starting points, bundles, configurations to be offered internally that include CPU, memory, storage, network, and other services and components."

Offer competitive pricing

"To effectively compete with external vendors, internal pricing of private cloud services need to evolve beyond just 'cost-plus' models," said Bils. "Pricing of internal services need to reflect competitive market dynamics, and provide incentives to keep volumes in-house."

Adopt PR and marketing

CIOs "need to effectively market and evangelize their services internally," said Bils. As with a professional marketing agency, IT leaders need to understand their customers' "needs and pains".

Offer demand management

Demand for internal services may be difficult to predict, and this is something outside cloud providers aren't food at — they'll just try to sell the whole package. But with private cloud, "demand forecasting and management will be critical to avoid bad capacity decisions," Bils said.

Once IT develops its chops at running a successful internal cloud service, it can branch outside of the organization as well. IT can serve as a competitive value proposition that turns non-tech businesses into cloud providers themselves. But the impetus needs to come from the people directly providing the services.

Topics: Cloud, Data Centers, IT Priorities

About

Joe McKendrick is an author and independent analyst who tracks the impact of information technology on management and markets. Joe is co-author, along with 16 leading industry leaders and thinkers, of the SOA Manifesto, which outlines the values and guiding principles of service orientation. He speaks frequently on cloud, SOA, data, and... Full Bio

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