IDC: Listen to customers, stay in business

In order to stay relevant, vendors need to adapt to customers' business and planning cycles and take a consultative role, say analysts.

The outsourcing industry is going through a pricing evolution, where traditional utility-based pricing options are evolving into combinations of service level agreements (SLAs) and business-metric based pricing schemes, says analyst.

Sandra Ng, group vice president, communications, peripherals and services research at IDC Asia-Pacific, said at an IDC seminar Friday the combined model is better suited to companies today.

She said the pay-per-use model works only when a company can accurately predict its usage pattern of a vendor's services over its budgeted period--a "complex" model when put into practice.

Companies are therefore increasingly picking up new license models offered by vendors based on business metrics, such as revenue or employee numbers, and combining those with SLAs to form the new hybrid "pricing innovation", said Ng.

Database vendors too have to understand business requirements to be relevant to customers.

Avneesh Saxena, group vice president, systems, storage and software research, said the long-time problem of IT and business functions not understanding each other is still existent.

The data center of the past was focused on availability and scalability. While the data center of today is focused on bigger-picture technological implementations such as virtualization and SOA, the data center of the future is moving quickly to be concerned with business functions such as compliance, speed and business continuity, said Saxena.

Saxena said over a data center's lifetime, companies typically go through a cycle of assessing, building and managing their datacenters. However, many end-users are "confused" and unable to accurately benchmark the efficiency of their data center or whether it is performing optimally.

Therefore, vendors need to fit into roles within customers' cycles so as to be relevant, said Saxena.

"You need to provide a structure to help end-users," Saxena added.

For example, because of the quick pace at which data centers grow, and limitations in dedicating a budget for the entire planned life of a datacenter, "customers will appreciate a modular approach" where a data center is given "room to grow", Saxena noted.

While data centers in the region are "relatively younger" than those in the United States, the rate of economic and IT growth will mandate restructuring in the next four to five years, he added.