Confusing relationships with telcos and cloud service providers are a thing of the past. Users of cloud services want clear and simple relationships with their vendors according to the Future of Cloud Computing study by North Bridge. Three in four companies are using direct or credit card channels with cloud vendors; possibly because when choosing a cloud vendor there is a 50-50 split between ad hoc relationships vs. as part of a strategic plan.

Now consider that 75% of companies are using less than 10 vendors – showing that less is more when it comes to cloud. The reason for this? Cloud expertise matters. 45.9% choose multiple vendors because of their capabilities.

So ask yourself, what sort of cloud are you offering? Are you providing just the IaaS or are you a partner of the company? Do you have expertise in the cloud beyond IaaS – perhaps based on industry, data governance, security? These are all differentiators for telcos and cloud service providers.

Differentiation in the Cloud

Being a specialist in a particular area in the cloud offers you the chance to be a strategic partner by delivering expertise. And with more people moving to the cloud, there is an opportunity here. Here are seven approaches to differentiation that you may want to consider.

  1. Industry – Whereas focus can be on the types of service, geographies etc. delivered, cloud service providers can differentiate by serving a particular industry. You can build your services for the government, health care or pharmaceutical companies for example. And by offering a range of services, based on particular industry, you will become extremely valuable because you understand the challenges and pain points of your customers. Amazon is doing similar having recently launched services targeted at the US government. Concentrating on a particular industry will help the effectiveness of your go to market strategy.
  2. Vertical Clouds – In this approach you may decide to build services around a specific technology competence such as high-performance compute or regulatory compliance and certification. By using this technology or competence led strategy, cloud service providers can target market segments who have the need for these particular specialties. For example, pharmaceutical companies may want periodic and scalable access to high performance computing to support drug modelling, all with guaranteed services. Equally the health care sector may require regulatory compliance to ensure patient confidentiality and adhere to data protection rules. By designing the vertical cloud, with specific specialisms from the ground up, then you will ensure that you are differentiated from more general cloud service providers.
  3. Products – At a base level, cloud service providers are offering the infrastructure. By bundling a range of services such as IaaS, PaaS and SaaS services on top, service providers will be able to differentiate their offerings to become more attractive.
  4. User Experience – Make the customer experience personalized. If you are focusing on a particular area, then customize the user experience and services for that market. Deliver your services based on the types of users you have. For example, change the user interface (UI) to reflect customer needs. At the same time allow different users to have different views of the same resources – in the same way that different users need different levels of access to those resources.
  5. Localization – Offering your cloud services in a particular localized language or niche market is another way to differentiate. Cloud service providers will find for example, if they offer services in Spanish alongside the user interface, they will do well in Spain or Spanish markets like South America. By localizing to capture a niche market, you can represent it more accurately and tailoring services to meet localized needs.
  6. Geography – Geography is absolutely a differentiator. If a customer needs a certain maximum latency, then you might be in the right place to offer that. Alternatively, where data protection is involved, if you have the expertise of that specific regulation and are located in the right country it could also be a differentiator. There are also the politics of where organizations feel comfortable in storing information. The opportunity here is to differentiate by geography, but also provide services across multi-geographies if viable.
  7. Application Delivery – Differentiate by offering value added services through application delivery. Remove the complexity of configuring and deploying applications for the end users. Doing this will allow the cloud service provider to offer a standard pre-configured edition of software stacks to different customers to provision and customize during deployment themselves, reducing the need for technical knowledge.

For the IT administrator, this increases efficiency, while also increasing effectiveness of the end-user as they no longer need to go through a lengthy application provisioning process allowing them to get on with their job.

Providing value-added services will change your value proposition so you are not just a cloud supplier, but a valuable one. Read our next steps for differentiating in the cloud after you’ve decided the best approach for your business.


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