It’s been a while since I posted, as I have been heads-down coding and building a new site and product that are about to launch next week…

More importantly, this could be an opportunity for us all to make some money together – if that’s sounds interesting.

The new product is called “SoftNAS”.  It makes what used to cost $60K to $750K or more available to businesses for 80% less – a way to manage a small to medium size business’ data safely and at a reasonable price.

Check it out here

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This is my first post in months… mainly because I have been heads down developing a new product and been in so deep I’m just now coming up for air!

Earlier this year, I was serving as CTO for a start-up company providing hosted desktops in the cloud.  Great idea – move business desktops into the cloud.  Unfortunately, the cost of business-class NAS (network attached storage) from vendors like NetApp, EMC and Dell turned out to be so expensive, the company couldn’t make money as its hosted storage cost of goods were just too high.  While very disappointing on the one hand, after working so hard in a start-up that failed, I was quick to also recognize this as a potential opportunity…

That’s a brief back story for what’s about to be launched into the market early next year – a subscription-based NAS product that makes cloud storage and VM storage affordable by all.

Incidentally, we just launched our SoftNAS Forums.  Let me know what you think about it.  I’m using vBulletin as the platform for the forum – very nice forum software.

So why does this matter, you might ask?  Well, a typical small to medium corporation invests several hundred thousand dollars to manage their business-critical data today. With SoftNAS, we are reducing those costs to a few tens of thousands for 90% the same functionality.

At a time when companies are struggling to hire more employees, provide decent health insurance coverage for existing employees, and keep growing (or just keep the doors open), saving money on IT infrastructure and storage costs is a very good thing.

Anyway, I will be working on a launch for SoftNAS (the new product) starting in January, which will provide an opportunity to get re-focused on product launches and online marketing once again.  Should be fun!

I hope everyone has a very Happy Thanksgiving!  (and if you don’t celebrate Thanksgiving, have some turkey and dressing anyway – good stuff!!)

Happy Holidays!

Rick

P.S. SoftNAS is available for free download for anyone with a small business with storage needs.  If you have a small business or like technology, you find it useful (would be great to get your feedback on it)

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Who is your product launch for?  

It’s an interesting question – you might be surprised (and even entertained) by the answers that you would get if you asked that question of most companies who plan to launch a new product, website or venture.

In my business, I have the opportunity to work with a lot of different corporations and entrepreneurs who are launching new products and businesses.  And it’s like déjà vu all over again (Yogi Bera) with most every new client…

When we’re getting ready to launch a product, it’s common to become so all-consumed by our own internal preparations and activities, that we either overlook or take for granted the most important part of the launch – getting our MARKET and our CUSTOMERS ready for US!

Launches are not just about us getting ready to go to market…they are about getting the market ready for what will be launched.

In reality, most prospective customers in our target market are so busy taking care of their own businesses (and personal lives), they have precious little time available to pay attention to what’s being launched by everyone in the market (except perhaps big brands like Apple, Microsoft, etc., who are able to muster enough resources to make a big splash anytime they want).

Customers are so busy, in fact, they probably couldn’t care less that a new product is being launched, so when that day you’ve worked so hard to prepare your company and product arrives, it’s no wonder it can easily seem like nobody cares…

There are good reasons for this – and it may not have anything to do with whether there’s a market need or interest in your product.  It typically has more to do with one’s PERSPECTIVE around WHO the launch is for.
So I ask these questions again…

Who is your product launch for?

Is it for your company?  To get the product right, and everything in place so you’re ready to ship it?

Is it for your customers and market?   To engage with customers early (before grand opening day), to educate them, get some of them to try the product early and provide real customer feedback?  To educate the customer on the issues and big ideas around your unique selling proposition and differentiation?  To answer their questions and major objections before launch day arrives, so your sales will be double or triple what they have typically been on launch day?

The right answer is usually – all of the above.  In most cases, you need key, representative partners and customers involved early on with you, to help you validate your product’s readiness, and to give you objective feedback and guidance on all kinds of things  - from product messaging, product content, and product readiness to customer problem, priority, budget and context that will help you and your sales team hit the mark right the first time.

So the next time you have a product to launch, consider this.  Invest at least 10% to 20% of your time, budget and efforts in helping your prospective customers and market to be prepared for your product launch and it could double or triple your early sales results – that’s a darned good ROI.  In fact, it can mean the difference between massive success and dismal failure…

Not sure what needs to be done to properly prepare your market and customers?  Here are a couple of links for additional information:

Product Launch Process

How to Launch  Product

It’s an easy trap to fall into… focusing almost of your resources, time and energy on getting your company, infrastructure and product ready for the market.  But now that you know the truth about who your launch is for, you have a big advantage and the proper perspective to help you.  It’s easy to fall in, because we are all basically selfish creatures – in it for ourselves and what we want to get (usually money).

The reality is, when you can find it within yourself to put others, in this case, your customers and marketplace, ahead of your own selfish needs – everyone wins.

Product launches are for your customers – not for you and your company.  When customers are prepared properly for what’s coming, they win – and when customers win, then you and your company win.  It’s as simple as that.

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As a serial entrepreneur and consultant who works with startups and established businesses launching new products and entering new markets, it seems I have made a career out of forging ahead into the “unknown”.  I recently started using the “lean startup” method of new business model and product development.  According to Wikipedia, the Lean Startup is a business approach coined by Eric Ries that aims to change the way that companies are built and new products are launched.  

The Lean Startup relies on validated learning, scientific experimentation, and iterative product releases to shorten product development cycles, measure progress, and gain valuable customer feedback. In this way, companies, especially startups, can design their products or services to meet the demands of their customer base without requiring large amounts of initial funding or expensive product launches.

Originally developed with high-tech companies in mind, the lean startup philosophy has since been expanded to apply to any individual, team, or company looking to introduce new products or services into the market. Today, the lean startup’s popularity has grown outside of its Silicon Valley birthplace and has spread throughout the world, in large part due to the success of Ries’ bestselling book, The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses.

However, while I found the Lean Startup to be an invaluable source of conceptual information about why the lean startup method works so well, it didn’t contain nearly enough “meat” and the step-by-step how-to information I really needed to apply the techniques as effectively as I wanted.

A few weeks ago, I was visiting with Kirk Coburn, Managing Director at SURGE and serial entrepreneur, and I saw this interesting book on his desk:  The Startup Owners Manual.  We discussed one of my new ventures, SoftNAS.com, and I mentioned I was in the early stages of doing some market testing and validation, and told him I was struggling a bit trying to figure out the best ways to apply the lean startup methods.  He pointed to the book and said, “that’s what this book is all about.”  So based on this, I ordered it from Amazon.com.

I have to say, if I had the information taught in this book and had applied it to every venture I’ve been involved in during my career, I’d probably have been orders of magnitudes more successful in those ventures that were worthwhile, and would’ve abandoned the ones that weren’t worthwhile months or years before I actually did – saving myself hundreds of thousands of dollars and my employers many millions – not to mention all the aggravation, frustration and angst that came along with failed projects.

If you are involved in any new product or new market venture, get this book.  If you are involved in a startup, get this book.  If you are involved in product management, get this book.  If you own a business, get this book.  And after you get it, read it then apply what it teaches, and I can virtually guarantee you it will: 1) increase your odds of success a hundred-fold on any new venture, and 2) stimulate some great new ideas on how you can increase your results from any existing business, help you uncover viable new business models, and perhaps even identify new products you should be seriously considering developing and introducing in your market.

Looking forward to hearing about your experiences with The Startup Owner’s Manual.

http://www.amazon.com/The-Startup-Owners-Manual-Step-By-Step/dp/0984999302/

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We just completed a mini-launch campaign for HealthSpective^SM, a healthcare SaaS solution for self-insured employers that typically yields benefit and claim cost savings of 2% to 7% per year – amazing software.   Check out the HealthSpective Launch Microsite.

I had the opportunity to work closely with the Dynamic Health Strategies team, the creators of HealthSpective.    Every launch project is different and unique, and this one was no exception.  It’s amazing what can accomplished when you have a deadline, adequate funding and resources for the launch campaign, and a group of people who are passionate about succeeding.

As is the case with many of our clients, these folks are experts at what they do – benefit-optimization software and services.  There’s an amazing amount of technology underneath the solution, but at the end of the day, engineers and management often struggle to get past the technology, industry jargon and internal perspectives to instead focus on just what the buyers need to know, and tailor messaging with “buyer language” for each audience (instead of using “product language”).

It helps to have an objective third-party come in and consult with you on your messaging, positioning, develop buyer personas and a custom launch sequence that’s optimized for your particular market and circumstances.

It was challenging but with some perseverance we were able to up-level the messaging, product positioning and value proposition into what you see today on the launch microsite.  It was a team effort and I’m still amazed at everything we accomplished from zero to launch in just three weeks.

Finally, I haven’t hosted a live webinar in a while, so it was great fun having the opportunity to do so Tuesday night.  We had a “VIP Briefing” night event for bloggers, which was a heck of a lot of fun.  Have a listen to the recorded webinar (click on the VIP Briefing Video link on the Media page).

Launches are always challenging, and I find them to be not only a lot of fun, but it’s very rewarding to help people bring the fruits of their hard work and labor to fruition.

If you’d like to know how a launch microsite, press releases and new production introduction should be done, be sure to check out this one.

P.S.  If you work for a company who’s self-insured, please pass a link to the microsite at www.HealthSpectives.com to your CFO, VP HR or CEO – it will help your company save a lot of money on healthcare costs, and improve overall employee wellness, all at the same time.  HealthSpective has the potential to change how healthcare is managed, not only for self-insured employers, but across the industry over time.

P.P.S.  If you’d like to see how to design a super-simple, yet extremely-powerful user-interface, be sure to watch the product demo video and VIP Briefing video.  The innovative GUI design approach DHS have taken with HealthSpective is amazing.

Tons of great ideas for you to use in your next launch, webinar and marketing campaign.

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We all need conversions to generate lead flow and sales – and the online sales funnel process’ front-end always begins with some form of headline for an email, blog post, social media post or landing page.

One of my favorite bloggers Copy Blogger and conversion sites recently conducted an email subject line copyrighting contest.  The results are very interesting and insightful.

Email subject lines are under more pressure today to gain a reader’s attention and attract a click than ever. I hope the insights from these contest results are helpful.  Of course, one of the most important takeaways is that taking a scientific approach to testing, tracking and optimization is the key to knowing for certain what works best for your particular audience.

A scientific way to increase your conversions

The runners-up

In the “Curiosity” category, we ended up going with Vince Robisch‘s entry:

Quarterbacks aren’t the only changes being tested in Denver.

Denver’s new quarterback has been hot news all over the country, and this header created a good “itch that needs scratching” — just what are those other changes being tested? In copywriting terms, this is known as entering the conversation already taking place in the prospect’s mind. MECLABS also liked the tie-in to the city where the conference was being held.

In the “Benefits” category, we decided on Shaun Connell‘s:

A scientific way to increase your conversions

This header includes both a benefit (improved conversion, which we know is highly desirable to MarketingExperiments’ audience), and also hints at a feature — at how we intend to get to that benefit, with the word “scientific.” This header also harnesses some of the power of curiosity as a secondary element — the reader has a reason to keep reading: to find out what, specifically, that scientific way might be.

Finally, in the “Fear” category, we liked Christine Parizo‘s:

Do your landing pages pass this test?

This is a solidly specific headline — the readers knows that the message will be about landing pages. Passing (or failing) tests is a common anxiety, and in a competitive economy, no one wants to have the landing pages that fail the test.

The word this is important (in fact, there was another entry for “Do your landing pages pass the test?”). That slight added element of specificity enhances reader curiosity to generate those click-throughs.

Learn about a real, scientific way to close more sales

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Have you ever had a potential BIG sale or deal that would make all the difference for you and your business, but just couldn’t close it for some reason?  Boy, I know I have seen my share of it.  And I still see it with clients all the time, where there’s such enormous opportunity and we eventually just give up (or worse yet, keep waiting for someone else to close it for us, like a reseller or agent, for example)…

Years ago, I had a situation come up that I will never forget.  At the time, there was a $10,000 sale that I really needed to close, but the customer was playing extreme hardball on price, and I just couldn’t agree to $2,500 for what was arguably worth $25,000, that I was ready to let go of for just $10,000 (it was a source code licensing deal).  Anyway, the customer knew I needed the money, and was just trying to take advantage of the situation and get a steal of a deal.

When I had just about given up on this deal, I shared my frustration with a sales mentor and friend at the time.  He said, “Rick – you can’t conjugate the dead ones – there is no ‘deader’ or ‘deadest’ – if it’s dead, it’s dead – - – so you have nothing to lose by trying again and doing whatever it takes to close that sale!”

I thought about those words – if it’s dead, you can’t make it any deader by going back in for one last-ditch, whatever-it-takes attempt to close the deal.  It turns out, this was exactly the inspiration and guidance I needed…

I decided to try something that seemed at the time, well, a bit crazy actually, but hey, it couldn’t get any deader than dead, so what did I have to lose by trying?

So I called the guy up and said, “you know what, I’ve been thinking about our conversations, and I realized something.  You’re absolutely right – that source code is not worth $10,000 at all – it’s actually worth $25,000 and I’m not going to let you have it for $2,500.  So the new price is $25,000.  You know how to reach me if you decide you still want it.  Good day.” – and I hung up.

Afterwards I thought to myself, “man, that felt good, to tell them how I really feel and show them they can’t take advantage of me, and stand up for myself and my beliefs”.  Of course, several days went by, and the phone didn’t ring.  So I called the guy back to put part 2 of my “Raise the price close” into motion.

He answered and I said, “It’s me again.  You know, I’ve been thinking… It wasn’t really reasonable of me to ask for $25,000, but we both know that source code will save your company months of effort and get your project on the right track fast, just like we discussed.  And since I am a reasonable person, I’m willing to make it available at the $10,000 price that I originally offered.”  Then I shut up.  After several moments of uncomfortable silence, he said “Okay – after you said the price was $25,000, I talked with my CEO and team, and we agree that $10,000 is a fair price that we can pay.  We can get a check out to you today.  When can you deliver the code?”

My jaw about hit the floor.  I couldn’t believe my ears – it actually worked!  What appeared to be a lost opportunity (without a horrible discount), was now a done deal!

Needless to say, I was quite proud of myself for pulling this off – and listening to my mentor’s advice.  Naturally, I went back and shared my story of what had happened with him and let him know his advice worked.  He laughed out loud and said, “That’s great!  See what a little persistence can accomplish?”  Later he told me he thought that was one of the craziest closes he’d heard about in a long time.

I have never had the opportunity to use that particular close again (and frankly hope I never have to), but in hindsight it did teach me some things about Sales that as a young entrepreneur and budding salesman, I still didn’t realize fully:

1) You can’t close any big sale by dealing with a non-decision maker or intemediary – you must somehow reach the person with the power to say Yes (and that was the real lesson to be learned here – finding a way to be heard by the actual decision-maker)

2) Being willing to walk away from a prospective customer who’s being unreasonable about price and trying to take undue advantage of you or your company can improve your negotiating position

3) Using a higher price point to establish value, then offering a perceived discount, is a great way to let the customer feel better about the price they’re paying (this is obviously common practice)

4) Never give up – especially if the customer is still on speaking terms with you (and even if they aren’t for a while)!

Rick

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You may (or may not) have noticed that I’ve been on a six month hiatus – from blogging and doing much of anything, except working in a start-up company (it takes a lot of energy, focus and time to make start-ups work)…  Anyway, I was looking over some material I wrote a while back and it really resonated (of course it resonates with me, since I wrote it!)  The point is, I think it’s worth breaking out and repeating here – as I find it is very tempting to use “product language” in lieu of “buyer language” in our sales and marketing…

Product language is what we have traditionally used to describe our products to the market. It includes broad claims, comprehensive features and benefits and detailed product and technical specifications. In the marketing departments of larger corporations, this information is often organized into what’s termed a “marketing source document”.  The language used is, more often than not, vendor-centric – not buyer-centric.

Unfortunately, too much corporate product language today is also full of marketing “gobbledygook”, techno-babble and other virtually undecipherable terminology that only the company creating it can make any sense of without a glossary.  Most sales people and potential buyers are immediately confused and turned off when they encounter this, quickly figuring out that this product must not be what they are looking for (incidentally, this is one of the causes of friction and the walls of separation between sales and marketing teams in larger corporations – sales perceives marketing as being out of touch with marketplace realities).

Finally, product language is sometimes selfish and egotistical – it extols the greatness of its creators. It brags. It exaggerates.  And when customers encounter this kind of language, it instantly creates disbelief, mistrust and sales resistance – making it harder than ever to make a sale.  If you’re selling online or to anyone who you don’t already know well, this can quickly be the kiss of death, as prospects who don’t believe you definitely will not buy from you.

Buyer language describes what a buyer wants and desires to get done in their business or personal life.  It has to do with the outcome and results the buyer wants to achieve.  It acknowledges the pain points, sticking points, negative outcomes, barriers and/or constraints the buyer faces in getting that job done to their satisfaction with existing alternatives. It shows how these issues can be better resolved – by use of the product in the buyer’s immediate context.

When using buyer language, we focus on just those product claims, features and benefits which are relevant to addressing this buyer’s problems and preferences.  Buyer language mirrors the problem the buyer already has and recognizes.

Buyer language “resonates”.  And unlike generic product language, it doesn’t require the buyer to go through complex mental gymnastics to figure out whether the product might be a good fit, capable of performing the job at hand.  Buyer language makes it obvious.

Marketing and selling to buyer segments can be accomplished in a serialized manner, one campaign or launch per segment (leaving the horizontal market for later or just continuing to penetrate the most important buyer segments in a sequence over time). The key is to get those “seeds” of initial adoption planted successfully, so they can grow and expand with time and customer experience with the product.  And it’s ten times easier to sell using buyer language that’s tuned for a specific market or set of common market problems.

Whether you’re a new company, entrepreneur or small business, I highly recommend this strategy vs. the broad horizontal (aka “shotgun”) approach.

If you are a larger company, I still recommend a buyer-centric launch strategy for introducing most new products – unless the new product is an exact fit for your existing customers and routes to market (like a major new version of an existing product), or you’re planning to risk investing millions of dollars on a broad market assault (e.g., the Apple iPhone launch).

One of the biggest mistakes made by large enterprises is attempting to enter a new market or reach a new buyer using the existing sales force and channels.  I could probably write an entire book on this topic, as it’s such a common pitfall and the cause for so many new product failures.  For now, suffice it to say that launching new products that appeal to a different buyer than your sales team currently knows and sells to require a different sales strategy (e.g., an overlay sales force, sales specialists or investing in an entirely new sales team, who will have to learn some new buyer language – something that’s not all that easy for sales folks to do).

Once enough individual buyer segments are penetrated, if the product truly has broad market appeal, broad adoption or standardization may occur naturally as the word spreads organically about the product’s many uses beyond its original niches.  In larger corporate environments, this is why we need to start smaller, ensure success in targeted buyer segments and then allow organic growth and expansion to take place more naturally (vs. trying to force fit new products broadly across many segments at once).

Focusing on targeted buyer segments using buyer language is a much easier way to achieve rapid early success than a more diluted, broad market assault that relies on generic product language.  Using buyer language makes it easier for people to quickly realize they want the product, reducing the effort and time required to sell the product, and increasing perceived value – a critical success factor when you have to prove a new product fast to reach profitability (or die as a start-up or new business unit).

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Will a perfect storm of technologies, combined with the SaaS financial and delivery model disrupt traditional Windows desktops and transform how IT services are delivered, and how corporate data centers are managed?  It may be more imminent than you think.

First, let’s examine a little background and the context that’s brought us to this point.

Over the last decade, application virtualization solutions provided by companies like CITRIX® Systems and Microsoft® Terminal Services have changed the way “legacy” Windows business applications are managed and delivered.  At the same time, server consolidation projects have virtualized the majority of corporate servers, using server virtualization technology by companies like VMware® to reduce the physical server footprint in the data center.

More recently, interest in VDI (virtual desktop infrastructure) solutions has grown markedly, as companies look for ways to deal with an aging desktop infrastructure and migrate to Windows 7.

At the same time, SaaS and Cloud Computing are changing the way new applications and data are developed, managed and delivered – outside the traditional data center, where data now commonly resides in third-party data centers, alongside their corresponding SaaS applications.

All this is happening at a time when extreme financial pressures continue to depress capital investments, and executives are hungry for ways to avoid capital spending and minimize operating costs.  Local and state governments now find themselves operating under even more dire financial circumstances, brought on by contracted tax bases and local economies.

Both businesses and government agencies are searching for ways to reduce unnecessary spending, avoid large capital investment outlays and reduce operating costs wherever possible.

Meanwhile, the move is well afoot to virtualize the enterprise desktops, using VDI technology.  However, the maturing VDI solution stacks are mostly premise-based – and highly capital-intensive.

Worse yet, these premise-based VDI solutions drive corporate data centers in the wrong direction – drastically growing the number of servers, power and air conditioning requirements and increasing data center management costs – wiping out gains from earlier server consolidation efforts.

Still, some companies are moving forward with VDI, despite its questionable ROI, CapEx intensity and the data center bloat factors involved.  For many, the pains associated with managing, upgrading and replacing fat-client desktops and the Windows 7 desktop refresh cycle are simply too much to bear.

Even Microsoft acknowledges that VDI can’t help you reduce costs – VDI does not reduce desktop costs because it can represent a significant up-front investment in infrastructure, including hardware, software, storage, and network. And, unless steps are taken to improve basic desktop management and deployment processes, just choosing VDI for desktop deployment will not reduce total cost of ownership (TCO) either.

Enter the “cloud-hosted” virtual desktop, by vendors like Desktone®, Virtual-Q® and others.  Cloud-hosted desktops virtualize Windows desktops and applications, similar to what CITRIX and Terminal Services have done on-premise.  But instead of the virtual desktops residing in the corporate data center, they are hosted in the cloud – within a private, third-party data center.

Importantly, cloud-hosted virtual desktops are leased in bulk to the customer using a SaaS licensing model. There is no capital investment required on the part of the customer to virtualize their business desktops.

Instead, desktop and application delivery costs become operating expenses (“OpEx”) under a SaaS subscription model. The vendor incurs the capital investment costs associated with the VDI hardware and software, data center operations, security and management.  Of course, IT continues to develop, install, update and manage the company’s applications and data – it just resides in a data center that’s physically located across the Internet.

For example, to implement a basic 100-user, premised-based VDI solution here’s what you would need:

For many companies and government entities, the cloud-hosted desktop is a very enticing proposition. However, desktops running applications require high-speed, secure access to server-side (e.g., client-server) application code and corresponding data, typically residing in SQL databases.

So how can cloud-hosted desktops access the data and application back-ends they require?

Answer.  Move the existing virtualized servers and databases out of the corporate data center and collocate them with the cloud-based virtual desktops.  By collocating both the virtual desktops and back-end servers and data within the same third-party data center, it’s possible to switch most, if not all, of the IT infrastructure from a capital-intensive, corporate-owned and managed data center into a fully cloud-hosted IT service.

I know, I know.  That’s just blasphemy!  Especially to many CIO’s and IT managers, who view their corporate data centers, servers and data as too business critical and sensitive to trust to any third party…

Well, there was a time when that attitude and perspective was completely understandable and even justified; however, times are changing.

In a 2010 article titled: Gartner Highlights Key Predictions for IT Organizations and Users in 2010 and Beyond.   Gartner predicts that “by 2012, 20 percent of businesses will own no IT assets. Several interrelated trends are driving the movement toward decreased IT hardware assets, such as virtualization, cloud-enabled services, and employees running personal desktops and notebook systems on corporate networks”.

This is a little extreme – the need for computing hardware, either in a data center or on an employee’s desk, will not go away. However, if the ownership of hardware shifts to third parties, then there will be major shifts throughout every facet of the IT hardware industry. For example, enterprise IT budgets will either be shrunk or reallocated to more-strategic projects; enterprise IT staff will either be reduced or reskilled to meet new requirements, and/or hardware distribution will have to change radically to meet the requirements of the new IT hardware buying points.

Trusted, professionally-managed data center providers like Softlayer®, Rackspace® and others now provide viable alternatives to corporate-owned and operated data centers – arguably, better managed and even more secure in many cases.

As a consequence, what begins as a cloud-based, desktop-as-a-service pilot project quickly evolves into a more comprehensive cloud-based computing-as-a-service solution, whereby the IT infrastructure is relocated into a private, secure data center managed by one of these trusted data center providers.  Backup data centers and multiple points of presence on the Internet provide the safety nets that make this a completely viable solution for most companies and government agencies.

This is even easier to contemplate today because most corporate servers are already virtualized, and IT has become more comfortable with virtualization and cloud technologies applied to business-critical computing.

It’s relatively straightforward to develop a plan to forklift application servers and databases, migrating them out of corporate data centers and into a cloud-hosted data center.

I know.  Double-blasphemy!

Needless to say, even the suggestion that the corporate data center, servers and data could no longer be directly under IT management’s control makes many of us gray-haired IT managers either want to scream or perhaps reconsider early retirement!

Seriously though, many CIO’s are beginning to recognize this emerging cloud-hosted desktop and data center model as the next logical step in the evolution of virtualization of IT, combined with cloud computing and SaaS delivery of applications and IT services.

Another less obvious economic driver involves the costs of software licensing by companies like Microsoft.  When a company switches from premise-based licensing to the cloud-hosted model, the Service Provider License Agreement (SPLA) can be applied to further reduce software licensing costs (typically covered under an ELA today).  When you combine the capital investment savings of both the IT infrastructure and traditional software license costs, the TCO advantages become clear and very compelling.

The security and reliability provided by top-tier hosting, colocation facilities and cloud-hosted desktop solutions has reached an inflexion point – one that enables many companies and government agencies to leave their own data centers behind over the next 2 to 5 years.  The service provider software rental licensing model is the icing on the TCO cake.

Is this really happening?  Yes, it is.

Earlier I showed you the cost of implementing a basic 100 user VDI solution.  Now add to that the cost of Redundancy, Firewalls, Support, Bigger Bandwidth, Power and Cooling.  All this is included as part of a cloud-hosted solution.

The financial advantages of transforming IT from a largely CapEx constrained proposition into OpEx is extremely attractive by itself. And for many, it may be the only financially viable way forward.

As CFO’s and CEO’s become more aware of the cloud-hosted desktop and data center as a viable alternative to traditional IT-owned and managed computing infrastructure, the business pressure to consider these alternatives is sure to increase with time.  And as the cloud-hosted IT-as-a-service model is proven across an increasingly broad range of industries, it could cross the chasm and become a mainstream IT strategy.

What does all this mean to IT?   And what affect will it have on the vendors who rely on capital-intensive, premise-based data centers, traditional VDI and/or fat-client desktop architectures?  And what about the architecture and security model of the cloud-based data center and cloud-hosted desktops?  And how does all of this factor into a mobile computing strategy?

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