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Cloud Training to Boost Competitive Advantage Strategies

By Jeffrey M. Kaplan
Jan 11, 2018 3:24 PM PT
cloud-enterprise-software-training

One of the biggest challenges facing organizations of all sizes trying to move to the cloud is finding and retaining the skilled workers necessary to implement today's rapidly expanding assortment of on-demand services.

This skills gap cost companies more than $250 million in lost business opportunities in just one year, according to a recent survey conducted by the London School of Economics and sponsored by Rackspace. The 2017 study polled 1,900 IT professionals and executives in the U.S., UK, Europe, Mexico, Singapore, Australia and Hong Kong.

Cloud Computing Skills Gap

More than 70 percent of respondents said they had lost immediate revenue opportunities because of a lack of necessary cloud skills. The skills gap prevented 42 percent of respondents' enterprises from adding cloud platforms that would have enabled them to pursue new business opportunities.

As a result, 70 percent of the survey respondents acknowledged that their companies needed to do more to invest in their people to improve their cloud skills.

High expectations that the cloud would make it easier to obtain computing power and software functionality to keep pace with escalating market demands have not become a reality for many organizations. Instead, the cloud has added another layer of complexity to many already complicated IT and enterprise application environments.

The rapid pace of innovation in the cloud industry has made it even harder for many organizations to keep up with the latest cloud alternatives and requirements.

Because most cloud companies operate in very competitive market segments, they have been forced to compete on price to win new customers, and to keep their operating expenses low to achieve profitability.

Customer training and support are the operating expenses that most often have been shortchanged so they could invest as much money as possible in the product development, sales and marketing functions that drive cloud vendor revenue growth.

Technology Adoption Curve

Customer training and support traditionally have been viewed as people-intensive cost-centers -- and a necessary evil in doing business. Many cloud vendors have attempted to circumvent this burden by relying on a variety of new technologies to reduce the cost of customer training and support, ranging from bots to self-service wikis fueled by powerful new artificial intelligence and machine learning capabilities.

Although these new tools can expedite some aspects of meeting escalating customer training and support needs, they still fall short in keeping pace with the expanding array of real-world challenges facing many organizations in an increasingly diverse cloud marketplace. Even the smartest support system can't satisfy the iterative needs of many cloud customers, as one question, issue or concern leads to another.

While most of us don't like to rely on traditional tech support mechanisms to solve our problems or satisfy our needs, it is almost always gratifying to have a good support experience that makes you feel better about your vendor choices. A quick answer served up by a bot can keep us moving forward, but the added insight of a knowledgeable support person can bring even greater value. It also can create a tighter bond to the service provider.

Since the inception of the cloud "as a service" business model, vendors have been obsessed with their customer acquisition costs and churn rates. Spending too much to acquire customers that ultimately abandon a cloud service is the best way to fail at this business.

As it turns out, many cloud companies have discovered that getting new customers up and running quickly is equally important. Shortening adoption time enables cloud vendors to recognize revenue quicker in today's pay-as-you-go subscription services economy.

Short adoption cycles are a key determinant of a customer's willingness to make add-on purchases. This willingness is essential to enabling the cloud vendor to achieve long-term profitability via the classic land-and-expand strategy.

Quick adoption cycles also play an important role in the customer's willingness to recommend a cloud service to others -- another route to reducing the cost of new customer acquisition and accelerating the profitability process.

Salesforce Trailhead

Reducing adoption cycle time has become an increasingly important issue for Salesforce over the past few years, as its cloud offerings have expanded via acquisition and organic growth. The company has faced escalating pressure to help its customers adopt its broadening array of cloud-based applications and take full advantage of their functional capabilities.

In response, Salesforce has hired many more support people and enlisted more service partners to address customers' growing adoption challenges.

Still, as the company plotted its course to double its revenue from US$10 billion to $20 billion in 2022, it recognized that it could not continue to bring on more people and partners at the same pace to sustain its growth.

So, Salesforce decided to rethink its training program and radically change how it delivered customer support. The company's relatively new Trailhead program relies on peer-to-peer, end-user training techniques fortified by gamification tactics that recognize and reward Salesforce customers who help others.

Trailhead capitalizes on the willingness of Salesforce software admins to share their knowledge and experience with their peers in the same way software developers have shared their innovations with others via the open source movement.

In the two years since the Trailhead program's launch, it not only has helped Salesforce satisfy its customers' escalating training needs and accelerate their adoption cycles, but also has created a larger and more vibrant end-user community. Many have become zealous advocates for the value of Salesforce's solutions.

Salesforce executives believe the continuous feedback cycle created by the Trailhead program community has changed dramatically how Salesforce prioritizes its product development efforts and launches new products. It has reduced the guesswork and increased the success rate of new products and features.

In a market in which competing on the strength of specific product features is a treacherous tactic, given the steady stream of new innovations being created in the cloud, vendors must find new methods to achieve a competitive advantage. Access to training tools and a community forum to achieve business success can give customers the sense of empowerment and respect that fosters a new form of customer satisfaction and loyalty.

The Salesforce Trailhead program has redefined how a company can gain competitive advantage, by showcasing the power of its customer community via a new form of training and support.


Jeff Kaplan has been an ECT News Network columnist since 2009. His focus is on cloud computing, SaaS, IT management, managed services and the Internet of Things. He is managing director of THINKstrategies. Email Jeff.


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