For decades now, IT giants have got away with playing hardball with customers. They have had customers locked into their wares because it has been the ‘devil’s’ job to untether business processes from suppliers’ closed systems. Some of the biggest names have survived (and yes, prospered) by pursuing tough, even combative relationships, safe in the knowledge that it’s hard for those companies to move away from the core platforms that underpin corporate operations.
Today, as companies dust themselves off and prepare to blink into the light of the brave new world of our post-COVID-19 future, we need far better buyer and seller relationships in order to survive and prosper.
Nobody is immune to change. For the past several months at Nutanix we have had to alter how we talk to customers, becoming even more of a listening company as CIOs and CFOs tell us about sudden declines in revenues, urgent support needs and a kaleidoscope of other factors that are miles away from business as usual. We are no longer hopping on flights but on Zoom calls and we’re hearing alarming stories from valued customers telling us they are struggling.
The pandemic has created a business environment that makes the banking crisis of 2007-2008 look like a cakewalk. In Italy for example, world-famous car marques such as Ferrari and Fiat paused production. In Spain, Inditex, owner of ubiquitous apparel brands such as Zara and Massimo Dutti, shut stores and switched some production to medical supplies such as masks and scrubs. Super-brands such as Premier League football shuddered to a halt leaving us starved of action. Many of us couldn’t even have a relaxing drink or meal as restaurants put up closed signs.
Behind each of these stories lies a huge amount of headache and heartache. With revenues screeching to a halt, companies need to familiarise themselves with an utterly novel set of circumstances and work out what to do with their people, operating models and channels to market.
For a fortunate few companies that are cloud-centric, there has been an uptick: Amazon and other online retailers; meal delivery services such as Deliveroo, Uber Eats; Zoom and other videoconferencing services, of course. What these companies have in common is a heavy investment in cloud infrastructure, but the need to scale their systems suddenly to cope with spikes in demand has many significant challenges in its own right. But for many others, the result of COVID-19 will be closed businesses and a battle for survival. For most, the return to normality will be measured in years rather than months.
Any supplier needs to understand the individual challenges facing its customers and today they face the toughest over. IT suppliers have been spoiled over the years and companies that have had best-in-class products have been able to call the shots, often leading to dysfunctional buyer and seller relationships. Now, we need to band together with customers and build stronger links.
Communications
More than ever we need to listen as well as talk. A frequent complaint is that IT firms only want to sell and not to understand the specific needs of customers, their operations, their sector or their local culture. This is the time to invest in getting closer to customers.
Pricing
The crashing revenues that many companies are seeing mean that the industry needs to move to more creative pricing plans. The old enterprise software model of money upfront followed by an annual tax is no longer fit for purpose. Subscription-style tariffs mean customers only pay for what they use and means they can try new services and approaches at very low cost. Discounted and free services should also be applied where appropriate.
Support
Service level agreements (SLAs) are a necessary model to provide value, but they are often too rigorous. Companies need to be able to flex their terms in times such as these and go the extra mile to ensure customers have what they need, whether that’s by extending support hours or extending terms.
Cloud
The industry needs to press home the message that cloud platforms can be highly effective near-term and long-term responses to standing up services. The firms least able to manoeuvre today are those that have lots of on-premises legacy equipment. Today, we’re finding out the real advantages of having capacity on demand, in not being locked into suppliers or platforms, in being able to dial resources down as well as up, of trying new things fast — and even seeing them fail without high penalties.
All of the above are ways to start thinking about how we can help but our theme must be flexibility. That word is part of the lexicon of the industry: you hear it everywhere, together with ‘agility’ and ‘elasticity’.
Attend any technology conference and you will be calling ‘house!’ on your buzzword bingo scorecard before the end of the opening keynote. But if IT vendors can lose their bad habits and show that willingness to change and flex in favour of customers, they will be in the best position to succeed when our economies bounce back. By being authentic, empathetic, human and gentle, we all win.
