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Loosely Coupled weblog

Monday, January 12, 2004

It should just work

Vendors will have to make utility computing much more accessible if they want to be successful, says IDC. That's because vendors must target smaller businesses if they want to come out on top, reports Network World, citing a recent IDC report.

So far, vendors have only managed to sell utility computing "to large, leading-edge enterprise companies," but, IDC reveals, "the value proposition of 'pay as you go and for what you use' appeals also to smaller organizations." You'd have thought that would be common sense, but IDC knows its market well — IT vendors never have understood the smaller business market.

Such buyers don't have the skills and resources to adapt complex, raw technology to their needs. So IDC goes on to point out some more home truths about how vendors will have to adapt their utility computing propositions to suit small and medium-size businesses (SMBs), reports the article:

  • "SMBs will buy services as a set of bundled offerings"
  • "SMBs are accustomed to having a larger selection of options"
  • "SMBs also prefer end-to-end support across the entire infrastructure, including access from devices — such as PCs, laptops and PDAs — to applications"
  • "Simplicity is another important criterion"
  • "Bigger vendors will also need to learn how to master ... a customer relationship that doesn't require a lot of work from the customer"

To sum up, SMBs want services that are complete and customizable, that run everywhere, are easy to use, and work first time. Wow. Technology that works — that's a bit of a novelty for the IT industry.

The paradox that struck me when reading this article is that, presented in these terms, IDC's report isn't really about utility computing at all, because the raw technology services that utility computing delivers don't add up to the sort of services the report describes. That in turn leads me to the conclusion that the utility computing vendors have already lost the SMB market, because the kind of service packages the report seems to be describing are already on offer from companies like and Grand Central.

An interesting article has just appeared in CRMBuyer, May the sforce Be with You, which includes a case study from a small executive search company. This four-person business found's sforce service to be customizable, flexible and "very easy." This is the kind of utility service that small businesses want — not raw computing (no matter how it's packaged) but something at a higher level — utility software that makes it easy and affordable for them to automate their business operations.

posted by Phil Wainewright 10:22 AM (GMT) | comments | link

Assembling on-demand services to automate business, commerce, and the sharing of knowledge

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