Buyers, Sellers Disagree About Value of Cloud Computing

By Gary Kim April 11, 2013

According to at least one study, enterprise buyers and sellers disagree on the value of cloud computing. Buyers say time of deployment is the top value, reduced cost of ownership only the fourth most important reason for using cloud computing services.

That won’t come as a surprise to observers of the enterprise information technology market. Enterprise buyers historically are not as obsessed with price, for example, as are small businesses.

Total lower cost of ownership is quite important for small business cloud users, a CompTIA study would suggest. That’s also logical. One important value of cloud-based apps, from a small business perspective, is the ability to use tools and applications that have historically been too expensive for the small business buyer.

On the other hand, some surveys show that, as with any new technology, even small business owners and managers have as a top concern that cloud computing has to work. Price of the solution doesn’t matter unless those sorts of questions are answered.

Sellers say reduced total cost of ownership is cloud computing’s top value. Granted, the differences are subtle. And as always, the way choices are presented can affect the results.

On a scale of one to five, with one being “not at all important” and five representing “very important” value, a score of three is the equivalent of an “better than average” score, where the “mean score” is 2.5.

So enterprise buyers tend to say TCO reduction is neither “very important” nor “totally unimportant.” The issue is what any observer thinks a score midway between “very” important and “totally unimportant” actually means.

TCO reduction might be deemed to be “somewhat” important by enterprise buyers, while sellers might be said to view TCO reduction as “more than somewhat important.”

In the small business market, it’s probably always true that price matters, and that total cost of ownership might not even be a factor. Small business owners tend to evaluate solutions based on out-of-pocket recurring costs, not total cost of ownership.

Edited by Braden Becker

Contributing Editor

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