Cloud Technology: A Strategic Asset or a Commodity?

As cloud products and services become increasingly commoditised, the impact on individuals, businesses, and industries alike is accelerating. Private data centres supporting physical servers and mainframes, monolithic applications, and waterfall methodologies are being replaced by hybrid-cloud and containers, hosting micro-services and SaaS applications, and leveraging DevOps.

However, the move towards commodity-based cloud products and services poses challenges for suppliers offering these types of offerings. When subscribers move towards commoditised (subscription-based) services, they create challenges for suppliers. The telecommunications industry's broadband services are an example of this evolution. Broadband has become an interchangeable commodity that subscribers leverage to the fullest. As a result, they move to different suppliers to take advantage of offers that only focus on attracting new customers at the expense of existing customers. This is augmented by the ease of porting, which is typically handled by the new supplier, making it easy for consumers to treat their broadband as a commodity.

This phenomenon is also occurring in many other sectors. If your product or service is a commodity, you make it easy to move suppliers, create offers only for new customers, and do nothing for existing customers, creating a market that will be exploited. To combat this, companies need to transform and change the way they engage with their customers.

One of the primary reasons for the commoditisation of cloud products and services is the lack of understanding of customer satisfaction or experience. Additionally, too many suppliers focus on revenue at the expense of the customer. To maintain revenues and market share, suppliers need to understand where their customers are in their engagement lifecycle, their constantly evolving expectations and satisfaction, and continuously adapt to their needs and wants.

Many suppliers have a 'one-size-fits-all' standard approach to customer engagement. However, to truly compete, they need to deliver a differentiated and personalised managed customer experience. This presents challenges for suppliers where their organisational structure and processes are not ready or adaptable to the new paradigm of customer lifecycle engagement.

To succeed, suppliers need to transform their business models, culture, processes, people, technology, and data usage. They need to embed a customer-focused mindset across all employees, analyse and understand trends and patterns from customer engagement data, and build an outside-in model that focuses on flexibility and empowerment towards the customer.

Tearing down silos and empowering collaboration across the company teams will lead to mutually beneficial outcomes for the business and customers. To build customer-centric momentum and meet the customer experience challenge, suppliers need to listen to their customers, build a unified customer experience and customer-centric vision across the company, and introduce technologies that can drive customer experience transformation.

In conclusion, understanding the importance of customer experience is critical to avoid being left behind in the commoditised cloud market. It is not just about focusing on NPS scores to enact market-leading customer experience, but it is about recognising that the company is about the customer, being willing to try something new, communicating and educating across the company, and building a unified customer-centric vision across the organisation.