Cloud mis-selling could be next PPI-style scandal - vendor

"Exorbitant" sales incentives on cloud services encouraging unethical sales, claims incentive-payment firm

Cloud computing could be set to follow in the footsteps of payment-protection insurance (PPI) and become the subject of a mis-selling scandal, according to Xactly.

The sales-incentive firm claims that commission payments for cloud are so high, staff could be tempted to take advantage and cash in at customers' expense.

Cloud computing is at the forefront of many IT firms' strategy, with many companies keen to push the technology. Microsoft recently claimed a third of its UK partners are selling cloud tech, up from just six per cent in the summer of 2013. The cloud market as a whole is growing rapidly - Forrester claims by 2020, the global public cloud market will be worth $200bn (£119bn.

Tom Castley, Xactly's EMEA managing director said the booming market has the potential to cloud moral judgement on the sales floor.

"Where the rewards are excessive, human behaviour means, naturally, people are going to look to game the plan," he said. "People will look to work out, selfishly, where can I make the most money?

"Could this be the next big scandal? There's a potential."

He added that when vendors make acquisitions and integrate new technology into their own offering, this can confuse customers, giving unethical sales staff another chance to cash in by glossing over the finer details on how the tech fits together.

"If I am getting paid an exorbitant amount of money for pushing cloud services, I might have a tendency to sell a bit more and maybe miss out [the fact that the newly acquired technology] is not as integrated as it seems in the demonstration in order to secure that business," he said.

"That's not dissimilar to some of the behaviour we saw historically with PPI and endowment mortgages, which was the first [scandal] picked up by the regulators. [Sales staff are] promising a massive return...for it not to be born out."

But he said the fact that cloud technology relies on customer renewals does make it harder for unethical sales staff to be repeat offenders.

"[The arrival of cloud] has meant it has got away from the ‘sell as much as you can and run for the horizon' which was the label [put on] some of the on-premise providers historically," he said.