The power of on-demand, and the reason cloud providers don’t like it
February 3, 2014
Grazed from CloudTech. Author: Dr. Owen Rogers.
IT vendors had a golden age before the invention of the cloud. It was essentially a risk-free implementation. Customers required a product, sales would propose a solution to which the customer would sign and commit, the customer would pay upfront, the vendor would start manufacturing, and eventually the solution would be delivered to the customer. Once delivered, it was unlikely the customer would suddenly drop the technology, and move on to something else.
At every step of this journey the vendor took steps to prevent its risk. The contract was negotiated per customer, thereby ensuring the deal was profitable. The customer paid upfront so the vendor didn’t need to borrow money or risk the customer defaulting on a debt. The contract commitment was made beforehand, so the customer took the risk that the solution might not be used…
And finally, the customer was told when delivery would be made, so the vendor could optimize its stock levels. Even after it was delivered, the customer was essentially locked-in to the technology for the foreseeable future…
Read more from the source @ http://www.cloudcomputing-news.net/news/2014/feb/03/power-demand-and-reason-cloud-providers-dont-it/
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