How to Fail with Cloud, SaaS and Enterprise 2.0

by Jim Berkowitz on May 13, 2009

Here are several excerpts from a very informative blog post by Phil Wainewright, How to Fail with Cloud, SaaS and Enterprise 2.0 :

Gartner analyst Michael Maoz blogged yesterday Why your Twitter and Social CRM efforts will fail. It’s an insightful post and one that, by coincidence, shares a theme with something I posted yesterday, Hybrid cloud or half-hearted kludge?

Both these posts are warning of the dangers of adopting the new without fixing the underlying problems in the old — in the processes and technologies we’re already using.

Michael’s post makes the enormously valuable point that, in our embrace of automation over the past two decades in sales and customer service, “We’ve done our best to stop listening to the customer.” No wonder those customers have started talking to each other, seizing the social power of the Web to find the information and resolutions that have become too difficult to obtain direct from their suppliers. Finally, this hubbub of electronic chatter has reached such a volume that businesses have started to sit up and take notice, realizing they should join that conversation. But isn’t that just so ironic? Michael writes…

“… we focused intense effort on lowering costs through extreme self service, draining away our ability to listen, and now that we achieved what we set out to achieve we want to go back to the beginning and learn to listen.”

But instead of just adding this extra listening activity, he argues, shouldn’t we also be re-evaluating all those non-listening processes that we’ve built up over the years? “[Unless you] rethink the effectiveness of your many interaction channels (not their efficiencies), it is unlikely you will find your listening skills, or bottom line, much improved,” he concludes.

That conclusion chimes with the central theme and conclusion of my own post, in which I examined the ways in which enterprises can adopt a ‘hybrid cloud’ model:

“… we all need to be much more aware of how pervasively the old, enterprise-centric way of doing things permeates all of our thinking and habits … A constantly recurring theme in the evolution of SOA, cloud and the Web has been the misplaced imposition of trusted, existing structures onto emergent patterns of interaction. This applies with special emphasis to hybrid clouds — build them to fit with your existing, unchanged infrastructure and you’ll get little-to-no benefit. Change your enterprise to really leverage the cloud and nine times out of ten, you won’t have any further use for a hybrid model.”

You could substitue the term ‘social CRM’, ‘Enterprise 2.0’, SaaS, or any other buzzword of the connected Web for the word cloud in the following conclusion, and it would remain as valid a sentiment:

“… I sometimes get impatient with people who look no further than the end of their nose and say they’ve embraced the cloud when they’ve barely begun the journey. The inevitable result of such thinking is they end up with some half-hearted kludge that’s motivated more by a desire to avoid too much change and disruption than really seizing the opportunity presented by cloud services.”


Prashant Kaw May 13, 2009 at 2:40 pm


Interesting post. Thanks for the synopsis. Do you think the following applies to legacy players trying to move into / adapt cloud / saas strategies or to all companies including new startups.

Of course old habits die hard and individuals from legacy companies can bring their old school habits into the startups. What’s your take?


Jim Berkowitz May 14, 2009 at 9:36 am


I think the problem of embedded processes that are counterproductive to current/new customer-oriented business goals or new technological capabilities are more likely in older/legacy players. “Old Ways Die Hard.”

With that said, you are right. People can bring their old ways of thinking to new companies and situations.

Prashant Kaw May 15, 2009 at 7:02 am

Cool beans! Thanks for the response!

Comments on this entry are closed.

Previous post:

Next post: