Moving from On-Prem to Cloud
With a shout-out to Ansa Shekaran who graciously shared Informatica’s journey on stage at the TSIA conference in October, 2022, here is a structured checklist for moving from on-prem to cloud, patterned after on the FT Works Five Layers of Support model:
Simplify the product offer and the support offer. Cloud customers expect streamlined offers so this is an opportunity to review your entire portfolio. And make it work for both on-prem and cloud since you will likely have mixed customers for a while. You can get inspiration here.
Push for longer contracting terms. At least for complex products, many cloud vendors are now using 3-year terms. We are far from the month-to-month arrangements we saw years back. And co-term everything for simplicity.
Especially at first, cloud sales may need some finesse as the product is maturing while customers may assume they will get all the functionality they enjoy in their on-prem products. A number of my clients have had great success implementing a formal validation process for cloud deals, reviewing all proposals early on to ensure that expectations are reasonable and will lead to smooth migrations. You won’t need a full validation process forever–but getting involved early in deals will ease the customer journey through the adoption phase.
From a sales perspective, it may be useful to provide special incentives for early cloud deals since they will require extra care and likely a longer sales cycle.
It’s very useful to create a dedicated team to migrate existing customers. This team will acquire specialized knowledge which will make future migrations easier and contribute to the validation process if you decide to implement one. This is a great opportunity to bring all post-sales teams together (support, success, implementation, and the migration team). They will need to work closer than ever to ensure a smooth transition.
Some vendors, especially those with a wide product line, establish a special team of expansion-only sales reps, understanding that CSMs may not be able to drive the entire expansion sale process (but wanting the existing sales team to focus on new logos and migrations).
Expect to upgrade customer-tracking systems during the migration, including the renewal tool, which will need to also support subscriptions, and the support portal, which ideally will be integrated with the cloud solution.
On-prem customers will bankroll the migration, so keep an eye on their satisfaction, and on-prem renewals. You may need to carefully balance R&D spending to keep on-prem renewals high while still managing to invest on the cloud side.