Q4 - Customers (CA Technologies)

rio ohmori wrote:I agree with Ally with regards to being customer centric.
Of course CA can explain what cloud can do, but if customer doesn't want I don't see the reason to force it.
But at same time, CA needs to get more knowledge and experience about cloud computing. Guessing from mainframe business(if I'm wrong, please let me know), when customer want new IT technology, CA will be the first one to be asked. Therefore, all they need to do is, get to know what cloud is like, and letting customer to know that they can do.

In my opinion, IT is something to make things efficient. Secured is "must", and how much budget they can save in the future will be the reason to consider if a company should change whole IT system or not. Including how many people they can reduce, how much time they can save and etc.

Same idea with Rio, security is the basic requirement of any IT industries.

Even though it could still be a big issue for cloud computing, but i don't think it should be the point to emphasize right now. For the cloud computing service providers, such as CA, the big issue is not to talk about saving costs, more flexible storage space, or better efficiency. They have to provide the idea of what kind of value they would get or add after introducing cloud service into their business.

I agree with Ally with regards to being customer centric.
Of course CA can explain what cloud can do, but if customer doesn't want I don't see the reason to force it.
But at same time, CA needs to get more knowledge and experience about cloud computing. Guessing from mainframe business(if I'm wrong, please let me know), when customer want new IT technology, CA will be the first one to be asked. Therefore, all they need to do is, get to know what cloud is like, and letting customer to know that they can do.

In my opinion, IT is something to make things efficient. Secured is "must", and how much budget they can save in the future will be the reason to consider if a company should change whole IT system or not. Including how many people they can reduce, how much time they can save and etc.

Although I'm personally quite welcoming the application of cloud technology, there is of course the camp of skeptics. Questions about security and reliability arise. Google, for instance, is a very strong cloud computing proponent. If you can remember, though, they had an incident in which thousands of Gmail accounts were erased, conversations, mails lost and only old backups existed. Although it is arguably a very small amount, events like this polarize users and potential customers. And it shows that questions as simple as mere reliability are still quite valid, especially for crucial systems which need nearly 100% uptime and functionality.

I am now interning in Microsoft Technology Center, Microsoft is also trying hard to move their customers to the cloud. What I have seen in their strategy is that move their customers toward virtualization first.

Actually virtualization is different from cloud, virtualization provide high available, and are more flexible. For example, if you currently provide a service and want it be always-on, traditional physical machine will not have the option for you to do that. Once you want to do some hardware maintains, or software upgrade, you must stop the service to set up the machine. Now if you put your services on virtual machine, then you got a solution call “live migration”. Live migration provides you the choice to move your VM to another physical host, so that your services will never go offline. Moving more further to the view of green power, you can even use live migration to move your VM to some particular nodes, and shut down other host machine and A/C of that section in the data center.

After pushing their customers toward virtualization, Microsoft then starts to introduce the concept of cloud. For the internal use, private cloud are the solution, while for the external use, public cloud can provide the feathers customers need. Between private and public cloud, there’s hybrid cloud. I am not sure whether CA tech. provide some virtualization solution, so that they have some transition for their customer instead of asking them jump from earth right to cloud!

Security might be the most concerned issue when moving towards cloud, but there are also some other problems: for example bandwidth, or the stability of the service…

I think what CA needs to do is stay customer centric, instead of cloud centric.

What CA being unfamiliar with is the public cloud market, in which IT resource is being provided in an on-demand fashion to those who don’t used to have access to them, and hence being quite disruptive. On the other hand, CA was already in the “private cloud” market for a long time. To some extent, private cloud is just another fancy way to describe enterprise data center. The distinctions are really technical. To be clearer, even under all the cloud “hype”, what’s important for companies is still about “making your IT aligned with your business to deliver value”, simply “transforming into private cloud” won’t help at all. CA only needs to ask: why do its customers need them when they can seek for public cloud services as alternative? Having an internal data centers and IT capability can still be the source of competitive advantages for companies ( if managed well), and that’s exactly what CA need to help achieve. CA’s opportunities lies in evaluating what cloud technology might help customers create value from IT.

I think customer-centric mentality can clear the strategic direction for CA. For example, it’s mentioned in the case that running SaaS software product and on-premise software product at the same time are conflicting rationale. To be honest, on-premise product usually brings more revenue because of the lock-in effect, whereas SaaS product are aim at different customer segment who don’t have much IT budget to do large upfront investment. Offering the same product under the two types may only make customers opt for SaaS version, or make the two product lines competing against each other. However, if CA is thinking customer-centric-wise, they’ll still make the SaaS version available, because that can let customers try the service with least fixed costs. If the service is good, customers might consider upgrading to on-premise version for full functionality and secure data ownership, which is truly a win-win.

Hey all

We would like to benefit from your comments on this topic (a little technical it's true).

CA Technologies have moved from a player selling mainframe standards (in-house hardware and developing cost of tailored software) to cloud computing solutions. How do you think their corporate costumers would react to this shift in market positioning?
"The bigger the customer the more skeptical they are of cloud adoption. " Page 12 of the case.

The Security of the Data is key as Dennis reminded it. What kind of criteria do you think customers also primarily take into account when it comes to switching to another IT model?

Charles

Hey dennis,

thanks for your answer. I agree on the fact that the implementation of a new technology may cause some issues in terms of trust.
How do you think CA should market it in order to prevent this from happening?

And on a second thought, do you think it can also be detrimental to your customer base for other reasons? Not only security problem, but more practical ones: like knowing how to make the most of the technology, and make sure that the technology CA is offering respond to the client's needs.

DennisProesch wrote:I think this entirely depends on the industry you are working in. Genereally the main concern of a customer is its prvate data. As long as one can guarantee the safety of it to some extend I do not think customers base is going to be affected by it. This is the case as long as the company does not rely entirely on the security on data in order to market itself. As soon as this is the case I think currently only stand-alone server are an option since they guarantee safety to the largest degree. As a result a shift to this new technology would result in customer base reduction due to the lack of trust towards new technologies that have not yet proven themselves.

I think this entirely depends on the industry you are working in. Genereally the main concern of a customer is its prvate data. As long as one can guarantee the safety of it to some extend I do not think customers base is going to be affected by it. This is the case as long as the company does not rely entirely on the security on data in order to market itself. As soon as this is the case I think currently only stand-alone server are an option since they guarantee safety to the largest degree. As a result a shift to this new technology would result in customer base reduction due to the lack of trust towards new technologies that have not yet proven themselves.

Question #4 CA Technologies: Bringing the Cloud to Earth

The implementation of a new strategy could confuse many of the company's customers.
So how would customers react to this strategic change and how would it effect their customer base?
Would they actually gain or lose customers?

Thanks!