As Gartner says, “The hype is deafening” or as one old-hand salesman told me, “As for cloud, there are more people out there selling PowerPoint presentations than anything else.”
It’s unsurprising, therefore, that cloud computing is at peak of Gartner’s Hype Cycle, what they call “The Peak of Inflated Expectations” “in which a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. There may be some successful applications of a technology, but there are typically more failures.”
For the vendor, it’s important to associate their business with the new upcoming technology, to position themselves for the future. For the customer, it’s a maze of bewilderment and confusion where it’s difficult to discern what’s real and what’s hype.
From a Rocket Fuel perspective, we believe it’s important for technology companies to balance their bold, exciting visions with practical offerings that customers can buy into now. This is the place where you need to build up a head of steam to withstand the stormy seas that follow. So it’s “head in the clouds and feet firmly on the ground” time for us.
The next stop on the Hype Cycle is the “trough of disillusionment” where companies having failed to meet expectations, see the market fall away from underneath them. Getting through the trough is a hard slog and may call for some “strategic re-alignment” but keep your stake firmly planted in the ground of the new (but temporarily discredited) technology and go back to re-stating core benefits and customer value. The technology will be back. This is just the swing of the pendulum away from the hype in an opposite and equal direction. Steel your courage and stand your ground and remember that this is what negative hype feels like. It’s still hype. Not all companies survive the trough. Some of the early trials end in highly publicised failures. Media interest wanes, except for a few cautionary or sensational “bad news” tales. A significant amount of vendor consolidation and failure occurs.
Here’s Gartner’s hype cycle as at August 2009 with cloud computing at the peak of inflated expectations:
There are some companies hyping cloud that describe it as a “disruptive technology”. It’s not. It’s the same server, mass storage and applications technology that one might buy and use in-house deployed via a disruptive business model. The cost arguments for customers are very compelling. We’re aware of some IT-based businesses that have made savings in direct and indirect costs of over 40% of their total cost base by implementing a cloud strategy.
Cloud has sufficient market impetus to change the computing landscape forever. There will be traditional hardware (and software) product vendors who resist or fail to rise to the cloud challenge. During the last major shift towards client / server PC-based technologies back in the 1990’s, there were some very big name computer vendors that became casualties of the market change. They tried to hang onto the “mini-computer” IT business model that was being supplanted by client / server. If you’ve been doing this as long as us, then you’ll surely remember names like DEC (Digital), WANG, Data General, Prime and Tandem. Most of those companies disappeared from view in a two-year period in the late nineties.
There is a way through all this turmoil of change. And it’s through excellence in marketing, both at the strategy and execution levels. Rocket Fuel can help your company ride through the change and succeed through to the mainstream market. The hype cycle can be a choppy ride and we’ve been through it before. We know what you need to do now and what you need to be selling to succeed in this market. There are some fortunate businesses that may be able to force their way through with financial muscle. Others will fall by the wayside. We can make a difference, so why not get in touch to discover how we can help.
In our next piece we’ll look at key issues for both customers and vendors approaching the cloud based on our own detailed research. Why not subscribe to our blog by e-mail to stay in the picture and keep in the game.
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