Recap of Day 1: Technology Services World
Yesterday our Spring 2010 Technology Services World (TSW) kicked off at the Santa Clara convention center, with over 700 attendees. The morning was filled with professional development workshops, advisory board meetings, and 1:1 meetings with members and partners. The conference officially opened at 3pm with a keynote by my boss, executive director of TSIA Thomas Lah.
Thomas talked about how “the cloud” is changing technology services, and not necessarily for the better. The traditional “on premise” hardware and software companies are all morphing into OnDemand as quickly as possible, yet pure SaaS companies have lower profit than their on premise counterparts. Should we really be running so fast towards what seems to be a cliff?
One thing you can’t deny about cloud companies–support has a critical role in keeping customers happy so they renew when their 2-3 year agreement is up. The most profitable accounts are those that extend beyond the initial contract, but the cost of switching OnDemand solutions is low, and you have to work extra hard to be sure your customers won’t leave for a better deal. In some ways, enterprise software is beginning to feel an awful lot like a cell phone plan: loyalty is hard to come by when the cost of switching is so low.
During the support services advisory board meeting, Bill Rose asked the board about problems that “keep them up at night,” and the answers were interesting, with a mix of old issues that never go away, and emerging challenges with no official best practices yet. Some of the long time issues companies still struggle with include:
- Multi-vendor support. As technology becomes more intertwined, identifying the failing component between a dizzy array of hardware and software is darn near impossible sometimes, and members are spending more time troubleshooting technology they don’t own or control. Training time and costs are going through the roof to keep techs up to speed on dozens of technologies, in addition to the core technology they support.
- Outsourcing attrition. With turnover rates as high as 15% per month for some outsourcing contracts, having adequate staffing of highly skilled staff becomes very challenging. And, this is not just an India problem anymore. Latin American and other areas in Asia are now finding high demand for seasoned, trained support techs, so turnover keeps growing.
- Demonstrating value. The economy has put even more pressure on maintenance renewals, with discounts climbing and more customers asking to renegotiate terms.
Some of the emerging issues listed were:
- Managing consolidation. High tech has always been a hot bed of mergers and acquisitions, and activity has increased as valuations dropped due to the economy. 2009 was a big year for acquisitions, and 2010 is expected to be as well. Multiple companies said more information is needed on best practices for merging support organizations, standardizing processes and systems across global operations.
- Cloud complexities. Companies m0ving to the cloud are finding a new set of support challenges, including confusing international standards for cloud computing–data storage, privacy, etc. Also, what are the key metrics/KPIs for cloud operations?
- Social media. Our larger members, and many of our smaller members, have jumped into social service and now are wondering how to effectively handle the huge influx of customer content. In addition, the ROI of social service continues to stymie companies as online communities find huge adoption…but assisted support interactions never decrease.
Day 2 of TSW is underway with a full day of breakout sessions, including my session at 4pm revealing the results of my 2010 Member Technology Survey. I’ll also be giving 2 Innovation Tours of the Expo at 11am and 2pm, with a drawing for an iPod shuffle for tour attendees. Come join us!