All About the Services
I was all set to write a piece this week that was fueled by some of the email that I received after last week’s post (Pretenders Beware) about what it really means to be in the Services business. Many Clients and service providers reacted to my assertion that a singular focus on transactional pricing was perfume on a pig. That’s not exactly what I wrote, but you get the picture.This week, I was going to comment on the practical feasibility of established ITO/BPO providers shifting their business model from being Client-focused to being Services-focused. I’ll save that for next week because it’s still a worthy topic. And, it’s one for which I anticipate a fair amount of discussion.
So, what preempted me?Yikes! This IBM-Apple venture has the potential to be a world-changing event for the Services industry. Talk about a poster child for how Social, Mobile, Analytics & Cloud are brought to reality for businesses, this initiative has the potential to accelerate the shift to subscription-based business operations like few others.
This isn’t about Facebook and Farmville. This is about industrial-class business functionality provisioned on the most agile of mobile devices and backed by the analytics engine of the world’s most prolific developer of information-based services. I like the ZDnet summary of the deal.To me, this is a major disruptive move to the ITO/BPO industry. Look at what the introduction of WorkDay did to the HRO market. This new venture has the potential to shift corporate applications strategies overnight. I’ve already spoken with several CIOs who tell me that they are launching studies to understand how this new industry capability might alter their roadmaps.
If there’s a hitch in this venture, it might very well be the capacity of the partners to keep up with demand. Reports have stated that IBM and Apple have been working for months on the initiative and that more than a hundred industry-focused enterprise apps are on the horizon. That should prime the pump for adoption.I am eager to hear more about the commercial model around this offering. Most of the people I speak with are expecting an experience analogous to iTunes or the Apple AppStore. If so, the job of the CIO just hit an inflection bump as their business users look to subscribe to business services that take a wildly different form than the legacy models deployed today.
Who would have thought that Big Blue would have the moxie to lead this charge? The implications to IBM are far-reaching – from sales and marketing, to client relationship management, to market coverage, to commercial models, to channel strategies, etc.Even more exciting will be the responses that will follow … what new ventures will emerge to compete in the market that is reformed by the gravitational pull of this entrant? That is the question worth watching be answered.
Personally, I applaud this move as being rocket fuel for the transition to subscription-based business services.