Advisory firms including system integrators, management consultants and professional services companies that have made money by selling, implementing and supporting the deployment of technology, are in for a tough ride.
The days of big ticket fees are fewer and fewer as business and technology leaders move to the cloud. The most common consumption model for technology is software-as-a-service (SaaS), which many have talked about for years but did not implement at an early stage. It’s only in the past couple of years, during tough economic times when budgets are tight, that companies have actively embraced SaaS. It’s now the predominant way for enterprises to access and utilize the best business applications.
According to Gartner’s estimation, $149.9 billion will be spent on enterprise application software in 2015 with "the majority" of it going towards modernizing, replacing or extending existing business software using SaaS. Why? Because it’s affordable and easier to use than traditional, on premise application acquisition and management models which often required a lot of deployment time.
What does this trend mean for advisory firms? It requires quick action. It also requires new thinking that usually only come as a result of life or death decisions.
If you have lived off the complexity of technology, helping enterprises select, deploy and maintain a plethora of enterprise resource systems and other mission critical business applications, then it’s time to have a reality check.
Don’t get me wrong. There will always be a need for building and integrating technology. It’s just that these deals are increasingly fewer and smaller in size. So, what are leaders like you to do? Look for other ways to make money – and it starts by changing your traditional, transactional models to one that is based on recurring revenue. This won’t be easy, but it’s possible. It’s also exciting because 90% of business leaders are not doing what you’re preparing to do here.
Here are a few ways that cloud computing, delivered as a service, can help, not hinder, your future growth.
In my next blog post, I will go into greater depth on each bullet point, providing more helpful examples.