VCE and Amazon Web Services: Page 2

VCE and Amazon Web Services represent two different approaches to IT infrastructure; the best option may be a hybrid approach that combines the two.


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Customer Satisfaction and Risk

Risk should be tightly connected to the goal of high customer satisfaction. If the hardware is in your control, you can plan for any major changes because your firm is the one making them. With a service, they don’t have to give you a heads up of a major change (though they typically do) because they don’t work for you and because they know that you’ll live with the result if your switching cost is high.

AWS runs on a utility model, and if you look at large network utility companies like cable companies and phone companies, you typically see customer satisfaction scores that are far lower than their hardware-selling peers. This occurs largely because they don’t have to really focus on customer satisfaction once established and instead focus on maximizing profit (which eventually can result in their demise, like it did for the first AT&T), unless their segment is highly competitive and the switching cost remains low.

VCE has one of the highest customer satisfaction scores in their segment, largely because they have to focus on the people buying their products or sales will stop. They don’t sell a locked-in service; they sell an actual product. Bad customer satisfaction could quickly drive new customers to competitors.

Now this doesn’t have to be the case. IBM’s customer satisfaction was actually higher when they leased hardware (basically sold computing as a service) than it was when they sold hardware. But that was because there was little competition at scale for the leased service and because IBM's founders drove a massive company focus on customer care. This is another example of why companies run by founders are typically more connected to customers. Thomas Watson, Sr. and Thomas Watson, Jr. were very unique executives.

So while it would appear that the on-premise hardware model can result in higher customer satisfaction, the overarching driver is how much the firm focuses on it.

Shadow IT

It is extremely hard for a line organization to bypass IT and buy their own hardware, particularly at the employee level. It's highly unlikely that a line employee will buy a VCE product with a company credit card (though I’d sure like to see the CFO’s face once that expense made it to his desk for approval).

For AWS, on the other hand, this kind of "shadow IT" customer is their bread and butter. Cloud computing is simply a lot easier to use than most IT shops. There are two dangers here, one is compliance, in that most users don’t seem to know the word exists, and the other is that this approach dramatically reduces IT’s utility. In effect it makes IT redundant. More than anything else it shows that most IT shops don’t focus enough on their own customer satisfaction.

The best counter for shadow IT is an offering from BMC called MyIT, which is focused on helping make IT more customer-focused and better able to provide both on premise and remote services like AWS far more successfully.

Wrapping Up

Both VCE and AWS provide a highly packaged true solution. The differences between the two are that with low interest rates VCE should be less expensive than AWS (at scale), but a service will always be more flexible. This suggests that some blend of the two approaches (hybrid cloud) will remain the best approach for the foreseeable future.

However, IT must focus more on its own customer satisfaction and in making sure AWS-like services pass through their service matrix before getting to the user. That can help make sure the effort is compliant, that the prices reflect volume buying and, most importantly, that IT remains an important part of this process and doesn’t become redundant to it.

An overlay like BMC’s MyIT should be considered over both approaches to assure this final aspect. In the end, a tight focus on customer satisfaction both from a vendor perspective and an IT perspective will likely have the greatest impact on how successful IT appears. And that should be the ultimate goal of any related efforts.

Photo courtesy of Shutterstock.

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