The Future Of Managed Cloud Services In The Experience Economy

Jan Louk Vrijenhoek

The experience economy is upon us.

Over the last decade, organizations leading the way in customer experience outperformed stragglers by nearly 80% on the S&P 500 Index, according to Watermark Consulting. Their customers were seven times more likely to purchase more from them, eight times more likely to try other products or services, and 15 times more likely to spread positive word of mouth.

This new reality is affecting businesses across the board, whether they’re measuring consumer satisfaction or employee satisfaction. That includes managed cloud providers, a group already – and not coincidentally – in the midst of a significant moment of opportunity.

For example, within SAP, partners developing cloud offerings are expected to grow 2.3 times faster than other partners, according to IDC. Nearly 60% of net-new partner opportunity will be built around SAP cloud. By 2024, partners will drive $4.84 for every dollar of SAP software. For cloud software, they’ll drive $6.48.

The software industry is clearly transforming into a service-based market. IDC cites a $53 billion opportunity for partners that lead with services. Businesses no longer want to just buy solutions. They want outcomes, and they want them delivered with skill and care.

Managed cloud providers must become increasingly focused on delivering the best possible services to their customers in the experience economy – so they can build trust and loyalty that will last.

Expanding into experience management

Recent industry developments are making customer experience analysis easier than ever before. For example, SAP’s acquisition of Qualtrics created a new tech category called experience management (XM), which combines operational and experiential data to drill down into how customers feel about brands, products, styles, in-store experiences, and more.

Before long, this technology will serve managed cloud providers as well. Experience data (X-Data) will offer insights that allow for continuous improvement and optimization of services and service delivery. These cloud providers will be able to quantitatively track the success of deployments, accurately measure the value of the services they’re offering, and paint a clear picture of their customer’s emotions and feelings throughout the process.

By knowing and understanding this experience, managed cloud providers will not only be able to find and prevent problems, they’ll be able to build real relationships by repeatedly surprising and satisfying customers.

Offering more services with XM

Managed cloud providers won’t just leverage experience management technology to understand their customers better. Some, particularly in HR and employee management, are poised to offer XM as a value-added or business-process outsourcing (BPO) service.

This can serve as a salve to customers aiming to close the gap between the perception and the reality of employee experience. According to Qualtrics research:

  • 69% of companies believe employees are engaged; 34% say they are.
  • 71% of companies believe employees are satisfied with their benefits; 48% agree.
  • 81% of companies believe employees would say they have a great place to work; 38% agree.

Experience management as a service will help companies measure employee sentiment across many areas, such as onboarding, education, development, compensation, and leadership. The data can help them improve their efforts in each area.

For instance, managed cloud providers offering talent management solutions can position XM as a way for their customers to continuously evaluate employee wants and needs. They can then uncover insights that will help their customers’ HR departments assist employees in meeting their career goals and growing their skills, all while ensuring the company retains top talent.

Ultimately, all these experiences will drive each other and build each other up. Smith Magazine found that organizations with the most employee engagement saw 15% more productivity and up to 30% greater customer satisfaction.

The experience economy is here, and those diving into it are seeing success. It’s time to embrace the XM future.

Visit SAP’s Partner Managed Cloud program page to learn more about partner managed cloud and its benefits.


Jan Louk Vrijenhoek

About Jan Louk Vrijenhoek

Jan Louk Vrijenhoek is responsible for driving the global partner managed cloud and business process outsourcing (BPO) business at SAP. His efforts enable qualified partners to offer a full SaaS and BPO service with a one-stop-shop approach. Jan Louk is part of the management team for the global partner organization, leading a team of professionals and experts to drive the partner managed cloud business in a multicultural environment.