The myth of selling the Cloud


The idea that all you need to do is logon to any number of cloud services sites with your credit card, buy, and get going immediately, has been labelled merely a ‘myth’.  A recent article on channelregister.co.uk (http://www.channelregister.co.uk/2013/12/20/oracle_in_transition/) has tried to bring to light more detail around how cloud vendors can really sell into enterprise clients.

Enterprise customers have a clear purchase and sales cycle so circumventing it by buying cloud services online is not going to take hold in the short term.  This is down to the fact that whilst some IT purchases may have changed because of the ‘cloud impact’, the majority of services outside of technology still go through the same procurement process and IT continues to adhere to the same purchase system.

Selling cloud is a marathon, not a race, for Oracle.

Companies such as Oracle who are selling into large enterprises with complex IT environments still require on the floor salespeople to work with the customer’s purchasing departments and decision makers.  Oracle is in the process of hiring for new sales people to take their cloud message into enterprise customers.  It is not a short term strategy as these sales people need time to ramp up and gain traction in their customer base, but it is a great indication of how salespeople can directly influence the success, or failure, of a product’s adoption within clients.

In the article, Oracle’s CFO, Safra Catz, commented on Oracle’s recruitment strategy. “We were actually, still as a company, going to make a large amount of money and so we have ramped up the sales organization and we are at full strength and it takes time for that to pay off but at that point your expenses are at one level and now the revenues come in.”

The report also goes on to detail how Oracle has reviewed its sales organisation and created specialist sales teams to target specific competitor products, such as business units focused on competing with SAP and Salesforce.

Strategic vs tactical pricing.

This strategy of hiring specialist salespeople to take out Oracle’s message is a strategic way of combatting the recent aggressive price cuts made by Amazon Web Services and Microsoft Azure.  By focusing on the customer again with ‘feet on the street’, Oracle is hoping to deliver cloud to the enterprise within a traditional sales framework.

Microsoft has also recognised this and is looking to refocus on features instead of commodity price wars against Amazon, and will be organising its sales force to cross sell cloud services to existing Windows customers.

This is a hopeful sign that IT vendors are continuing to recognise the importance that a well organised sales force can play within their enterprise customers – and to reassure traditional IT sales companies that cloud does not have to be the threat that it is sometimes is perceived to be.