Wednesday, November 25, 2009
The Character of Clouds: Ethics Matter More for Service Providers
Here's an important reminder for cloud service providers: character counts.
Ethics, Values, and Trust are table stakes – for anyone who wants to succeed in business long term – but especially for cloud service providers.
As a cloud customer, I am not simply buying/renting your hardware and software. I am grafting my company onto yours. We are intermingling our corporate DNA. I am loading my databases on your disk drives. I am modifying my internal processes to map to your services.
If you suddenly grow 3 heads, I cannot easily cut and run. Who you are matters. How you behave matters. What you believe in matters - more so than what your service actually does for me - a damn sight more.
Don't believe me? Think that's Barney talking…? Think it's all about the infrastructure, managing your capital, maintaining the buzz, keeping the pipes pinging…?
Engage me for a moment in this nearly true to life tragic tale of the CEO of a small venture backed cloud service vendor, and how he single-handedly blew a huge deal out of the water by forgetting that character comes first. (Names and circumstances changed to protect all involved).
You blew it, Jon. No one else.
Not your sales people.
Not your sales manager.
Not your lawyer.
You, Mr. CEO.
You Mr. President.
Here's a quick recap of the events of the last 48 hours of your deal from my perspective. Keep in mind that when I say "my" I am again speaking AS THE CUSTOMER, Jon.Everything was moving along with the deal. We had a solid understanding of your service. We felt it would work for us. We had the money. Jon, think about that. We had the money budgeted. The check was written, buddy. All you had to do was take it to the bank and cash it.
How in heaven's name did you blow this?As we got near the close, my team started getting weird vibes from your sales rep. He was playing games, dumb rookie stuff - divide and conquer, 'we can only ensure this discount if you sign today', skeesy Glengarry Glen Ross nonsense stuff.
I heard my folks complaining about him, but ignored them. Probably shouldn't have. His skeaziness was a big bright red flag waving in my face. A lighthouse beacon warning me to keep off the rocks of doing business with you. A canary in the coal mine…oh, heck…you get the idea.
I was brought into the deal at the last minute when our lawyer and your lawyer bumped into a glitch in the contract that they couldn't sort out. My team wanted quick resolution, so they asked me to step in.We were readying plans to start implementing your service next week, Jon. This dumb legal wrangle was nothing to lose a deal over, Jon. It could have been sorted out in 10 mins. Once I understood the issue, I probably I would have talked to my lawyer, we would have deemed it a business risk we were willing to take, and we'd be shakin' and signin'.
Next week. $$$…all yours, Jon. All yours.
Now, as feuding lawyers do, these guys were each squawking that the other lawyer was being unreasonable. Squawking and sputtering. Jon, that's what lawyers do sometimes…they squawk and sputter.So you and I are supposed to jump on the phone and sort it out. That's what us business guys do…they sort stuff out.
At this point, I'm just trying to figure out what all the squawking is about. It's pretty confusing, and pretty technical. I am listening.Then all of the sudden my radar starts beeping.
You are getting all hot and bothered. Jon, my heavens, now, you're squawking…"In all my years, I've never had a client ask for anything so outrageous!"
You are squawking pretty good, Jon."None of my other (name drop, name drop, name drop) clients have ever raised this as an issue! This is absurd. You can't be serious!"
Why are you squawking, Jon?"I am not signing any contract that has this clause in it! We may as well not have a contract at all."
Aren't we supposed to be sorting stuff out, Jon? Business guys don't squawk, do they? I sure don't, squawk, much, Jon.I am finding your reaction…troubling…
I am not listening anymore. I am wondering what you will act like when the brown stuff inevitably really hits the fan later. Stuff always hits the fan, eventually, Jon. And business guys sort it out…if we don't, it gets really messy…But you are squawking…not sorting…
I am sitting across the table from my lawyer. So what if he squawks a little? He's a guy I know and trust. Heck, we pay him to sometimes squawk a little.I don't know you from Adam, Jon. You're a voice on the speakerphone.
And, I barely understand the twisted legal edge-case condition that both lawyer guys are squawking about. Heck, Jon, I haven't even looked at the contract.
But, Jon, I'm hearing something in your voice on that speaker phone that makes me nervous. I am hearing you squawking not sorting.Then I think I hear you say something about how we might act in bad faith. Seems to me you are worried about us being dishonest. What?? We don't act in bad faith. We are as freaking honest as the day is freaking long and then some…
I don't even know you. I haven't opened my mouth other than to say, Hi how are Ya, and you are accusing me of dishonesty? I begin thinking maybe you are just a little bit dishonest, yourself, Jon.This is getting way more troubling…$$$, Jon…slipping from your fingers…flittering right out the window…going up in smoke…flushing down the…ah heck, you know what I'm getting at here…
I end the call. I'm feeling like I need to take a shower.A couple of minutes later I get a follow-up email from you. You think my lawyer is being unreasonable and you want me to replace him with outside counsel. What? You want me to throw a respected peer and colleague under the bus so you can get your deal done? What??
Claxon horns are blaring in my head. My stomach is doing back-flips.
I tell my team that I am uncomfortable doing business with you. They ask me to sleep on it.I wake up the next morning absolutely sure I don't want to do business with you. I try to tell myself it was the gruel – just a bad dream. I vow to be more open minded and give you a chance.
I get to work that morning and find an email from you telling me you did in fact talk to an outside counsel, and he (surprise) agrees with you that my lawyer is being completely unreasonable (squawk) – you share that your outside council is vehement and is using strong language to say we are being unreasonable and our concern is 'absurd' and doesn't deserve the dignity of a response (squawk, squawk, squawk…!)I go with my gut and cancel further discussion. We are not doing business with you.
I squirt some hand sanitizer into my palms and feel marginally better.
Then I happen to read the rest of your email – really only by chance – and an unbelievable window is opened onto the soul of your company culture, its values, and your personal ethics.
You have accidentally attached a string of emails between you, your lawyers, your sales reps, and your sales managers…the string reveals unethical behavior apparently condoned by management, and a fundamental disrespect for customers that is so powerful it makes me want to gag. All described in vivid tone and tenor.I realize I have just dodged a bullet – an armor piercing bullet.
My hands are shaking and I have trouble concentrating for the rest of the day.You know the rest of the story, Jon. Your pitiful attempts to reengage. Your realization that you attached those horrible emails. Your mistaken conclusion that it was your flub of attaching the emails that sent me over the edge. Finally, your abortive, sad, and frankly creepy apology. (Seriously Jon, a guy like you shouldn't be teaching Sunday school…)
You blew it, Jon. The buck stops with you. Rail all you want about my lawyer being unreasonable. Blame me if it makes you feel better. Make excuses if you must.But take this to your now empty bank: It was never about the contract, Jon. It was about you and your company. I was both ready and able to accept some business risk, but once you revealed your true self, I certainly was not willing to share my business's DNA with you.
Yes, sure, to do business with enterprises, cloud providers must have enterprise quality infrastructures – safeguards, systems, processes, quality people all count. We are not going to run our core business applications on infrastructure that does not meet the business standards we've developed to run in-house.And there must be a compelling ROI to move these core applications outside the safety of our four walls.
BUT – big but – that is not enough. In addition to the hard technical and financial standards, we also need assurance that you can be trusted, just like we trust our own employees, in fact, even more.For a cloud service provider to succeed, it must deeply internalize that:
Trust comes before contracts.
And that, Jon, is both the God's honest truth and your $$$ lesson for today.
at 4:19 PM