Overview of B2B marketing for Cloud Computing Services
The overarching aim of any marketing effort by an individual or organization is selling a product or service to solve an end user’s problem, thereby providing value, which in turn adds profit to the organization. Both B2C and B2B marketing have similar human centered customer journeys since humans run businesses, and purchase everyday Items themselves, although a striking difference is the mode of decision making. In B2B marketing, businesses purchase ‘decisions’ from other companies/businesses which were strictly designed to solve a pain point, while on the other hand, B2C capitalizes on emotions to provide solutions to problems. It might not be entirely rational when compared to a business purchasing a service or product from another business.
As the era of personalization has come to stay, B2B businesses have since veered towards personalizing services for clients, using advancements in computer algorithms to provide solutions that meets business needs, and can be compared to B2C businesses like Netflix or Amazon shopping, which provide items that match the customers taste with algorithms. Cloud computing services do just that as the primary goals of every business is to manage cost as much as possible, and scale services or products. Cloud computing provides personalization at scale for businesses and according to McKinsey, it can create $1.7 trillion to $3 trillion in new value. These services can provide businesses with the appropriate data, design, distribution and decision making capabilities to achieve business goals and increase market share in any given industry.
To understand the various personalized services provided in the cloud computing space, imagine if you wanted to rent a car for a trip and instead of just going on an app or making a call to rent it, you had to build it up from the screws to spraying the body with paint just for that same trip. To break this down, Tony Hu from Big Commerce uses “Pizza-as-a-service” which explains that the traditional way of making pizza at home (on-prem) will require an individual to have a dining table, soda, gas/electric, oven, fire/heat, pizza dough, toppings, cheese and tomato sauce. If only the cheese, toppings, tomato sauce and pizza dough are provided by a vendor, the person will need the infrastructure to make the pizza (Infrastructure as a Service or IaaS). If the Electric/Gas, oven, fire, and the pizza is provided by a vendor, the person will need a platform (dining table), and soda to eat (Platform as a Service). Where the individual does not have to worry about using their own resources, they can dine out at a restaurant with a variety of tasty pizzas aimed at satisfying their appetite (Software as a Service). In essence, services can be personalized for businesses when they make the decision to scale.
Business case and the competition
The main business cases for the adoption of cloud computing can be made on cost, time and scale (new customers, relevant services and efficiency) — these are after all, the pillars that drive the growth of modern-day businesses. With these main themes, cloud computing provides an on-demand, pay-per-use model –meaning no up-front costs (or charges). Cloud computing is said to be resilient, which factors in its high availability, fault-tolerance and varying levels of need by a business. Its workload movement/migration ensures that virtual machines, applications or servers can be closer to the customers at any time to serve them and meet the needs of the organization. Although these might seem like the most optimal technology for businesses, organizations have to be aware of the role they play to ensure the security and quality of their data and application on-premise, while the (Cloud) vendor absorbs the service-level agreement of security of their data and application on the cloud. This is because data security and cyber-attack on the company is an actual disadvantage of moving to the Cloud.
According to Statista (Q2 2020), Amazon leads the $100 Billion cloud market with Amazon Web Services (AWS) (founded in 2006) at 33% of market share, Microsoft’s Azure (founded in 2010) at 18%, and Google Cloud Platform (GCP) (founded in 2010) is at 9%. The remaining 40% of the market consist of organizations like Alibaba Cloud, IBM Cloud, Salesforce, Tencent Cloud, Oracle Cloud with other minor players. Gartner in 2020 forecasted the growth of Worldwide public cloud revenue at 6.3% with SaaS leading this movement. Businesses thinking of using cloud computing services have to compare their needs with the offerings of these competitors. For example, the availability zones and computing engine (AWS 200+ services, Azure 100+ services and GCP 60+ services), downtime (GCP having lower downtimes), and cost (GCP has lower cost). Generally, these competitors relatively have same advantages and are still competing for more market share in the industry. Businesses also have the option of developing a multi-cloud strategy, and even employing hybrid cloud strategy –where their data may stay on-premise, and they move their application to the Cloud (or spread them across various platforms) with the goal of high availability and scalability.
Marketing for Market share
The function of marketing is to attract and convert prospects through each stage of the customer journey. This also is true for sales. Even if they have similarities, there are differences in the process. Marketing looks at the product, its prices and where it will be sold. Sales on the other hand looks strictly at the target market, the team structure, action plans, tools and resources to achieve targets and goals. Marketing looks at the long term in terms of brand awareness and strategic position of the product or service and measures if the organization is communicating clearly with the customers. In sales, it’s all about hitting short term volume goals with clear targets each month.
Technology enhances this process with social media as one of the great tools invested in to democratize marketing and in some ways, reduce cost. Well thought out marketing plans can increase brand awareness with marketing tools like Search engine optimization tools (SEO), data reporting software, content creation tools and project management tools as vehicles used to execute the plan. Sales on the other hand will need invoicing software, meeting and email management tools, inventory and document tools. Both marketing and sales teams have to align their objectives as both are striving to increase the company’s revenue, and with technology, they can easily sync their workflows and produce better results.
Marketing and Sales Tactics
For marketing, tactics can be internet marketing, blog marketing to increase authority in the field, SEO, video marketing, and Social media marketing. To do these things, the marketing executive or manager has to evaluate the ROI for B2B marketing on various platforms, and decide where to execute campaign. I am not a big fan of just running ads because of its capital intensive nature and would rather consider offline methods first since humans prefer face to face engagement. This way, the business gets very loyal customers while spending a lower amount of money in some cases. Marketing strategies should involve offline strategies like sponsoring events, inserting oneself into a culture, in this case, the cloud computing culture, which is taking the world by storm, and word of mouth. Offline and online pathways should both be considered based on budget and company goals.
For sales, there are different methodologies by which selling is done like SPIN selling, Inbound Selling and Amazon’s method which is CustomerCentric Selling (among other methodologies). A Cloud computing B2B Company knows that there is a face to every position and so has to understand human communication to sell convincingly. I will recommend a customer centric method which involves empathy in selling products.
The law of averages can be implemented in both marketing and sales as the more reach you have the more likely a business will subscribe to the services of a cloud computing service.
Measuring ROI
Return on investment for an organisation attempting to replace traditional in-house IT with a cloud computing project might be a bit complex to determine as ROI can be seen in different areas of the business over time. Typically, ROI over a period of time can be the reduction in investment in IT infrastructure upfront, increase in revenue (due to high availability and scalability or product and/or service), decreased cost (in operation), and efficiency. The true test of return on investment for cloud computing solutions in my opinion will be measured by productivity, which enables the organisation focus more on business than IT, speed of launching products or services, size to enable companies scale and then quality of services or products. Generally, the organisation has to define their metrics, stating which is valuable to them and calculate the investments spent and the revenue or savings gotten after implementing such services.
In Conclusion, B2B marketing of cloud computing services is not a one size fit all effort because different organizations have different needs and how they calculate their ROI. Marketing and sales might be very important, but if clients don’t see value in the offering, marketing won’t bring as much revenue into the company. More emphasis should be on a human centric approach to selling with empathy in form of proper research to make marketing profitable for both parties in the exchange.
References/Resources:
- 10 best Practices for Selling Cloud Services https://www.richardson.com/sales-resources/cloud-selling-saas-sales/
- A technology blueprint for personalization at scale https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/a-technology-blueprint-for-personalization-at-scale
- B2B VS B2C Marketing https://www.wordstream.com/blog/ws/2019/05/20/b2b-vs-b2c
- Cloud Computing Business Case https://www.youtube.com/watch?v=QuFQq3nQt8Q
- Cloud Computing Competition https://www.youtube.com/watch?v=n24OBVGHufQ
- Cloud Market https://www.statista.com/chart/18819/worldwide-market-share-of-leading-cloud-infrastructure-service-providers/
- Difference between sales and marketing https://blog.hubspot.com/sales/sales-and-marketing#:~:text=The%20term%2C%20sales%2C%20refers%20to,selling%20of%20goods%20or%20services.
- Digital Innovation at Speed and Cost https://www.bigcommerce.com/blog/saas-vs-paas-vs-iaas/
- Gartner Forecast https://www.gartner.com/en/newsroom/press-releases/2020-07-23-gartner-forecasts-worldwide-public-cloud-revenue-to-grow-6point3-percent-in-2020
- How B2B Sellers are Offering Personalization at Scale https://hbr.org/2017/07/how-b2b-sellers-are-offering-personalization-at-scale
- Overview of Customer Centric Methodology https://www.lucidchart.com/blog/about-customercentric-selling
- Cloud Computing for Business http://www.opengroup.org/cloud/cloud_for_business/p6.htm#:~:text=Return%20on%20Investment%20(ROI)%20is,will%20want%20to%20assess%20it.&text=ROI%20is%20the%20proportionate%20increase,over%20a%20period%20of%20time
