Portals eNewsletters Web Seminars dataWarehouse.com DM Review Magazine
DM Review | Covering Business Intelligence, Integration & Analytics
   Covering Business Intelligence, Integration & Analytics Advanced Search
advertisement

Resource Portals
Business Intelligence
Business Performance Management
CRM
Data Integration
Data Quality
Data Warehousing Basics
EAI
EDM
EII
ETL
More Portals...

Advertisement

Information Center
DM Review Home
Web Seminars & Archives
Newsletters
Current Magazine Issue
Magazine Archives
Online Columnists
Ask the Experts
Industry News
Search DM Review

General Resources
Bookstore
Industry Events Calendar
Vendor Listings
White Paper Library
Glossary
Software Demo Lab
Monthly Product Guides
Buyer's Guide

General Resources
About Us
Press Releases
Awards
Media Kit
Reprints
Magazine Subscriptions
Editorial Calendar
Contact Us
Customer Service

Saugatuck Technology Survey: Perceived Value Gap

  Industry Statistics published in DM Direct Special Report
August 12, 2003 Issue
 
  By DMReview.com Web Editorial Staff

Saugatuck Technology released the results of a revealing new survey focused on buyer perceptions surrounding "pay-as-you-go" IT services entitled, "Utility Computing: A Hard Sell."  The findings of the preliminary survey reveal that vendors and their buyers are out of sync.

Key Findings:

Vendors are trying to sell something (utility computing /pay as you go IT) - but buyers do not know what it is.

  • Compared to vendors, buyers are much less familiar with the term "utility computing." (See yellow highlighting in Figure 1.)
  • "Utility computing" is even more obscure to buyers than is "grid computing." (Compare yellow and orange highlighting in Figure 1.)


Figure 1: How Familiar are You with the Following Terms?

Vendors are convinced of a clear connection between Web services, utility computing and business process outsourcing (BPO). Buyers are less sure.

  • Both view Web services as a key enabler of utility computing.
  • However, a significant majority of vendors believe utility computing will enable BPO, while less than half of buyers agree.

Vendors and buyers disagree about when "pay as you go" will be a common IT business practice.

  • While vendors expect pay as you go for IT infrastructure in three to five years, buyers expect it sooner - in 18 months to three years. This suggests that vendors are once again going to disappoint buyers.
  • Meanwhile, vendors believe pay-as-you-go BPO will arrive sooner than do buyers.

Vendors are overestimating the importance to buyers of several key potential motivators of utility computing.

  • Vendors believe the most important motivator for buyers in adopting utility computing is reducing capital expenditures. Buyers, however, are much more concerned with current operating costs. This gap suggests that vendors are touting the strategic benefits of utility computing, while buyers are focused on achieving operational gains.
  • Additionally, vendors overestimate the importance to buyers of freeing up critical resources.

Vendors are underestimating the importance to buyers of several key potential inhibitors to utility computing.

  • Most notable among these is security, which is viewed by buyers as the greatest inhibitor.
  • Vendors also underestimate the importance of low or uncertain ROI and lack of ability to customize applications are to buyers.

Even when vendors do have the pulse of the buyers, they still need to assess the importance of the inhibitor.

  • Buyers are much more concerned with reliability and availability than with industry track record.

These results are consistent with extensive research conducted by Saugatuck showing a clear and distinct difference between technology marketers and their buyers. Saugatuck calls this the Perceived Value Gap. It appears that vendors and users are on different planes when it comes to understanding the concept of utility - or pay as you go - computing and making it work. We believe there will be significant opportunity for the right vendors in educating users and positioning themselves as resources for business and IT services. However, marketers who fail to take into account the Perceived Value Gap when formulating their strategies do so at their own peril, as the results of this most recent study shows.

The survey was conducted via e-mail from April to June 2003. More than 10,000 survey invites were sent to CXOs, vice presidents, directors and managers. Ninety-one qualified respondents participated. For more information about this or any other original Saugatuck Technology research, please contact Paul Fenick, paul.fenick@saugatech.com.

Entire contents © 2003 Saugatuck Technology. All rights reserved.

...............................................................................

For more information on related topics visit the following related portals...
Strategic Intelligence.

This piece has been brought to you by the DMReview.com Web Editorial staff.

Solutions Marketplace
Provided by IndustryBrains

Intuit Track-It! Help Desk Software
Intuit IT Solutions provides Track-It! - the leading help desk software solution for call tracking, problem resolution, remote control, asset management, LAN/PC auditing, network management, and electronic software distribution. Free demo

Way better than backup! - Continuous Protection
Free White Paper. TimeSpring's CDP software for Windows automatically captures all changes in REAL TIME so you can recover from data loss, corruption or security breaches in minutes. Analyze, report and test data anytime without impacting operations.

Help Desk Software Co-Winners HelpSTAR and Remedy
Help Desk Technology's HelpSTAR and BMC Remedy have been declared co-winners in Windows IT Pro Readers' Choice Awards for 2004. Discover proven help desk best practices right out of the box.

See Enterprise Business Intelligence in Action
See how business intelligence can be used to solve real business problems with this live demo from Information Builders

BlueSky Query by Relational Solutions, easy and affordable
Don?t blow your budget on BUSINESS OBJECTS or COGNOS. BlueSky is affordable, easy to use and browser based. Ad hoc querying for analysts. Reports with views for managers. Drag, drop, drill. Clicks change tables to trend, pie or bar charts. Excel/Word integration.

Click here to advertise in this space


E-mail This Industry Statistics E-Mail This Industry Statistics
Printer Friendly Version Printer-Friendly Version
Related Content Related Content
Request Reprints Request Reprints
Advertisement
advertisement
Site Map Terms of Use Privacy Policy
SourceMedia (c) 2005 DM Review and SourceMedia, Inc. All rights reserved.
Use, duplication, or sale of this service, or data contained herein, is strictly prohibited.