Will Office 365 Destroy Consulting

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If you had asked me back in 2010 if my banking or insurance clients would ever move their content to the cloud, I would have laughed. But over the past couple of years these same organizations have shifted their perspective. The idea of hosting email in Exchange online and providing users with an option of Office 365 capabilities (OneDrive, SharePoint, etc) intrigues many. 

Which raises the question: How will the shift towards SaaS technology impact modern consultancies like System Integrators (SI) and Managed Services Providers (MSP)?

A Harbinger of Things to Come

Office 365 is just one example of an SaaS first world. But it is a harbinger. 

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Once an organization moves its email to the cloud (and not just a cloud infrastructure, but a full SaaS environment), it sets the precedent for future content applications. In the near term the consulting community potentially has a lot of work helping migrate content from legacy exchange environments, on-prem SharePoint, file shares, etc. But then again, maybe not.

Microsoft and providers like Box and Dropbox have been bidding very aggressive fixed-fee migration services. They don't care about the migration business. They understand that the provider with the most clients will win the cloud war. So migration fees are a drop in the bucket. Gaining market share is a sprint, not a marathon. And there will be plenty of opportunity for margin enhancement in the future.

I've written about why letting a cloud provider do your migration is like letting the fox guard the henhouse. They have all the incentive in the world to get your content moved quickly. But migrations are a fantastic opportunity to impact business transformation, clean up content, update / improve your information architecture. A good System Integrator will help make sure that you move the right content and that that content is enriched with all of the appropriate metadata.

But what is left for the system integration community once the content is in the cloud?

The entire modern SI business model will disappear. No more fat two to five year multi-million dollar projects delivered by busloads of badged consultants. Farewell to the endless support contracts. Their expertise is no longer needed for upgrades -- those will happen regularly in the background.

Some work will remain, integrating on-premises systems with the cloud systems. But developers are building an ever growing community of apps around Box and others to provide at least baseline capabilities in that area. A need will remain for custom applications in the cloud, but hungry app developers will partner on many of these opportunities for little or no cost so that they can resell the capability.

Skipping the Bloat

The current System Integrators or Managed Services shops just haven't been built to thrive in an environment where contracts last months, not years for six figures, not seven. This doesn't mean that the future will be consultant-less. (Perish the thought!) The consultants of the future will look like Appirio.

Appirio's cloud-based consultancy employs over 1,000 people on staff. But they also have a crowd-sourced developer group of over half a million. They claim an average project time of 3.9 months. Their average deal is in the low six figures. But the real kicker is the way their customers are changing their approach to big problems. CEO Chris Barbin writes

our customers are approaching complex business transformation in a more transactional and iterative manner, recognizing the need to see results quickly to justify ongoing investment. In addition, these projects can typically be staffed by far fewer full time and client FTEs as they take advantage of reusable IP and crowdsourcing to supplement design and development efforts. This results in faster time-to-value and higher levels of project success, as potential overruns can be identified and corrected in before the bloat sets in."

Barbin also claims, "More than 75 percent of our projects have been delivered on-time and on-budget." If firms like Appirio can provide low-cost quick hit projects that move their client's transformative initiatives forward with a high success rate, then I think we can offer a hearty, "Amen!" 

Perhaps the future will look like more consulting firms taking an approach like Appirio's. Drastic change isn't going to happen overnight. There will be stages of evolution and organizations move from on-premises to hybrid and eventually SaaS in some applications, but not in others. But just as certainly as the heyday of the enterprise sales rep is dusking, so too is that of the traditional consulting firm.

The disruption brought on by cloud and SaaS isn't just impacting the enterprise. It is forcing the entire ecosystem to change.

Creative Commons Creative Commons Attribution 2.0 Generic LicenseTitle image by  galactic.supermarket