Sunday, 21 November 2010

Making money as a Cloud Provider

The percentage of IT budgets allocated to Cloud services continues to increase as the use of as a Service" becomes a mainstream strategy for enabling the full spectrum of business activities.
The now famous "Capacity-utilization" cloud business model adopted by Amazon ( ) highlights the revenue potential of moving consumers from a fixed to variable usage-based cost model. However, though Cloud revenues are increasing, the profit margins for lower value-add services such as commodity cloud storage are shrinking. Fortunately for new market entrants selling commodity capacity is just one way to make money as a provider of Cloud services or as a supplier to those providers.
Providers who consciously and deliberately identify which combination of business model elements to adopt in support of their Cloud service offerings, and who have a clear strategy for making the necessary business model transformations, have a much higher probability of successfully exploiting the potential of cloud. {"reaping the benefits" is an option; you had "exploiting the benefits"} However, this transition to cloud, an on-demand business model, can be very rough for a provider used to selling custom, high-end services to established large enterprises, or for a hardware or software vendor used to getting paid up front (one-time charges). Taking on cloud characteristics means learning to support a one-to-many paradigm; changing cost allocations from an engagement to a service offering (product) basis; and getting used to an annuity revenue stream.
In this session we will present the following cloud business model elements that cloud computing and service providers can adopt to build greater ROI.
* Seek buyers with complementary consumption profiles to drive higher asset utilization (yield curves)
* Over-provision and commoditize resources to drive higher returns
* Develop operational efficiencies to improve price and/or service level objectives
* Enable better access to market choices to optimize license costs
* Offer aggregation and integration solutions (which help customers build customer market share and maintain coherent IT architectures) to expand the revenue opportunities
* Shift to "Appstores" and self-service (sales) channels to reduce sales costs and to expand the addressable market
* Build services for adjacent markets and/or build service options and add-ons (service variations) to expand the market opportunity horizontally and/or vertically
* Manage risk to increase outcome revenue and margin
* Use creative pricing and charging mechanisms to increase outcome return

Saturday, 20 November 2010

Why insight and intelligence will matter to you and your business

While business and technology environments shape events, developments also shape what these environments mean and change seems to be faster then ever. So insight and knowledge of the environment and behaviours will be essential in being able to better understand how best to respond and position you and your business.

The word "transformation" is a description of the alteration in a state of a system. But while transformations have been going on for as long as recorded history, transformation of the developments and behaviours have become more intertwined.

Lessons learnt from AI and the computer gaming industry

The development of artificial intelligence AI has long been a goal since the 1950s and the developing of computer programs for chess gaming. Not until the 1980s did computing seriously start to challenge and beat human Grandmasters. But these are arguably not real world problems as the conditions and game play are within strict rules and simple predefined pieces.

The lessons learnt are very similar to the current challenges and emerging changes that we see in the business world.

One may well ask why should this be relevant to cloud computing when the story of services and implementation may follow traditional lines of infrastructure and services. The answer is that positioning the right cloud solutions as a cloud provider or seller is affected by the level of understanding and insight of the industry and value propositions. But more importantly, from the consumer and buyers side; the level if information and insight to needs and buying behaviour is becoming increasingly more digital across a range of online channels, devices and services.

Events, data and transactions are more than ever interactive and follow patterns of choice and relationships in a marketplace. Understanding these will bring new competitive advantage and new emergent opportunities.