Thursday May 12, 2016

Customer Relationships Key To Service Provider Opportunity In The Cloud

Organizations now rely more on digital IT infrastructure than physical, a tipping point that suggests the cloud has become the go-to model for most customers. In addition, 95 percent of customers intend to renew their contract with their primary cloud and hosting provider, indicating a high degree of loyalty despite the inherent flexibility of the cloud model. These and other findings are according to The Digital Revolution, Powered by Cloud, a Microsoft Corp.-commissioned study conducted by 451 Research LLC, released Wednesday, that illustrates the opportunity for cloud service providers and highlights the important role that developing deep and lasting customer relationships will play in capturing it.

As organizations prepare for major business and technology changes, they will depend more on digital platforms to deliver products and services. According to the findings from the study, 57 percent of organizational infrastructure will be digital, compared with physical in two years, up from 51 percent today. In addition to extremely high renewal rates, over 80 percent of customers have an annual or longer term contract with their primary cloud and hosting provider, with 43 percent having a contract of two or more years. Thirty-eight percent of customers indicate they will increase spending with their primary cloud and hosting service provider upon contract renewal, further emphasizing the importance of solidifying customer relationships.