Industry Trends in Cloud Computing: Alternative Business-to-Business Revenue Models

227 Pages·2018·2.85 MB·English

by  David Dempsey

DAVID DEMPSEY
FELICITY KELLIHER
INDUSTRY TRENDS IN
CLOUD COMPUTING
Alternative Business-to-Business
Revenue Models
Industry Trends in Cloud Computing
David Dempsey • Felicity Kelliher
Industry Trends in
Cloud Computing
Alternative Business-to-Business
Revenue Models
David Dempsey Felicity Kelliher
Salesforce School of Business
Dublin, Ireland Waterford Institute of Technology
Waterford, Ireland
ISBN 978-3-319-63993-2 ISBN 978-3-319-63994-9 (eBook)
https://doi.org/10.1007/978-3-319-63994-9
Library of Congress Control Number: 2017955977
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Foreword
It’s hard to remember life before the Internet. In a little over two decades
the exponential growth of connected personal and mobile devices has
contributed to them touching every aspect of our private and business
lives. To gain 50 million users it took telephony 50 years, electricity 46
years and television 22 years. Compare that with just seven years for the
Internet, three years for Facebook and barely two years for Twitter. In this
current industrial revolution, we truly are experiencing a hardware and
software technology revolution, the likes of which we have never seen
before. As computer hardware has followed the well-documented Moore’s
law,1 so have similar incredible growth laws appeared for bandwidth and
data storage. Having these technologies underpin the Internet, we are
seeing a world where computer speed, storage and bandwidth are increas-
ing almost unbounded, leading to massive technical and business disrup-
tion. No companies, countries or industries are being left unchallenged
and with that disruption of course comes huge opportunity!
Today the world’s top five companies by market capitalisation are all
technology companies. Three of them—Amazon, Facebook and
Google—have recently joined Apple and Microsoft on this list at the
expense of the traditional industrial giants. These amazing technology
companies along with many others now deliver their respective software
services over the Internet, using what is termed a Cloud Computing
v
vi Foreword
model. Introduced as a concept at the turn of the century, this business
model is now at the heart of everything we consume from the Internet.
Many books have been written about the technological wizardry that
has led to this revolution. However, relatively little time has been spent
on discussing the business revenue model variations that underpin the
Cloud Computing approach. In this book David Dempsey and Felicity
Kelliher bring a unique perspective on the evolution of the wide variety
of Cloud Computing models and also where they may be headed in the
future. They discuss the need for software vendors to focus much more
closely than they ever did before on their customers’ success to create
compelling reasons for these business subscribers not to leave. They give
a fascinating insight into the new world of pricing strategies to attract
business customers. What signs of churn should be looked for in the data
and what action can be taken? Also, what reasons are causing that churn?
All these key questions, and much, much more, covering all aspects of the
Cloud revenue model are discussed, with clarity and academic rigour in
this book.
Cloud Computing has often been referred to as the 5th utility (joining
gas, water, electricity and telephony) and, as we look to the future, all
software innovation today is based around a Cloud Computing model.
As academics and futurists also talk today about the dawn of the fourth
industrial revolution (following steam, electricity, computers and con-
nected enterprise), its transformation will be unlike anything seen before,
bringing with it advances in artificial intelligence and machine learning.
One thing is for certain; it will be delivered over one of the Cloud
Computing models discussed in the following pages.
Notes on Contributors Steve Garnett has had one of the most distin-
guished careers of any European executive in the software industry.
Garnett has been a member of the executive management team of three
software start-ups that have each turned into some of the most successful
software companies in history. Garnett started his career joining Oracle
Corporation prior to its IPO in 1986. He held various technical and sales
positions including Director of UK sales, Vice President, European
Marketing & Alliances, and was the youngest member of the European
management team. He was at Oracle Corporation for 12 years as the
Forewor d vii
company grew to become the world’s second largest software company.
Garnett joined Siebel Systems in 1996 as Vice President of Europe and a
member of the founders’ circle. From 100 employees the company grew
in eight years to become the world’s fifth largest software company with
8000 employees and a $60bn market capitalisation at its peak. In 2003
Steve joined his former Oracle executive colleague Marc Benioff to head
Europe operations and be part of the executive team at salesforce.com
and he helped take salesforce.com public in 2004.
Dr Garnett recently retired as EMEA Chair at Salesforce.com. He
remains a serial investor in the technology sector.
San Francisco, CA, USA Steve Garnett
Notes
1. Moore (1965) observed that the number of transistors in a dense inte-
grated circuit doubles approximately every two years. In the ICT context,
the period is often quoted as 18 months because of Intel executive David
House, who predicted that chip performance would double every 18
months as a result of a combination of the effect of more transistors and
the transistors being faster.
References
Forbes. (2015). Roundup of Cloud Computing forecasts and market
estimates [Internet]. Available at: http://www.forbes.com/sites/louis-
columbus/2015/01/24/roundup-of-cloud-computing-forecasts-and-
marketestimates-2015/. Accessed Apr 2016.
Foremski, T. (2011). ADP the original cloud company is “bored with the
cloud” [Internet]. Available at: www.siliconvalleywatcher.com/mt/
archives/2011/05/adp_-_the_origi.php. Accessed Apr 2016.
Moore, G.E. (1965). Cramming more components onto integrated cir-
cuits. Electronics Magazine, 4.
Cloud Computing SAAS
B2B Providers (2017)
As a number of SaaS providers are detailed within this book, a summary of
each is provided below. This is not intended as a comprehensive glossary of
B2B CC SaaS providers; however, it has been cross-referenced with the top 25
SaaS provider list 2017 (www.channel2e.com).
Adobe Creative Cloud: Launched in 2016, this suite offering is new to
the B2B CC SaaS market. It gives users access to a collection of soft-
ware developed by Adobe for graphic design, video editing, web
development, photography and Cloud services. It is built on a
monthly or annual subscription service, delivered over the Internet.
ADP (Automatic Data Processing): Originally formed in 1949, ADP
provides Human Resource Management (HRM) software and ser-
vices and is known as the original CC SaaS provider (Foremski 2011).
Amazon Web Services: American electronic commerce and Cloud
Computing company, founded in 1994 by Jeff Bezos. Having started
as an online bookstore, its later diversification included selling a vari-
ety of software, video games, electronics and music media before
expanding into the sale of apparel, furniture, food, toys and jewellery.
It is currently the largest Internet-based retailer in the world (2017).
Amazon Cloud Infrastructure Services: Amazon is the world’s largest
Cloud infrastructure services provider (Infrastructure as a Service/
Platform as a Service).
ix
x Cloud Computing SAAS B2B Providers (2017)
Amazon Kindle e-reader: Amazon Kindle devices enable users to
browse, buy, download and read e-books, newspapers, magazines
and other digital media via wireless networking to the Kindle online
store. Launched in 2007, the e-reader sold out in five and a half
hours and remained out of stock for five months.
Apple iTunes: Initially conceived of as a simple music player when
launched in 2001, iTunes has developed into a sophisticated multi-
media content manager, hardware synchronisation manager and
e-commerce platform. The current version of iTunes enables users to
manage media content, create playlists, synchronise media content
with handheld devices including the iPod, iPhone and iPad, stream
Internet radio and purchase music, movies, television shows, audio
books and applications via the online iTunes store.
Atlassian: Established in 2002, this Australian enterprise software com-
pany develops products for software developers, project managers
and content management. Best known for its Cloud-based issue
tracking application JiRA and its team collaboration and wiki prod-
uct Confluence.
Box: Founded in 2005, Box is a Californian-based Cloud content man-
agement and file sharing services B2B provider. The company uses a
Freemium business model to provide Cloud storage and file hosting
for businesses.
Chrome River Technologies: Founded in 2007, this American SaaS
company creates expense reporting and supplier invoicing automa-
tion software for mid-size to large commercial and non-profit organ-
isations and higher education institutions worldwide.
Cisco: Founded in 1984, Cisco is an American multinational technol-
ogy conglomerate that develops, manufactures and sells networking
hardware, telecommunications equipment and other high-
technology services and products. Cisco owns such Cloud-based
offerings as WebEx and Meraki. In 2017, Cisco premiered
‘Umbrella’, a Cloud-based secure Internet gateway to tackle Cloud
and mobile security risks.
CloudBees: Based in the US and founded in 2010, CloudBees is a pro-
vider of continuous delivery software services. Initially, CloudBees
provided a platform as a service to build, run and manage web appli-
Cloud Computing SAAS B2B Providers (201 7) xi
cations and is now the hub of enterprise Jenkins and DevOps, pro-
viding smarter solutions for continuous delivery software solutions.
Concur Technologies: Co-founded by Steve Singh in 1993, Concur is
an American Software as a Service (SaaS) company, providing web
and mobile solutions for travel and expense management services to
businesses and individuals. Acquired by SAP (see below) in 2014 for
$8.3 bn, the company employs 4600+ worldwide.
Docusign Contract Management: US-based company founded in
2003 that provides electronic signature technology and digital trans-
action management services for facilitating electronic exchanges of
contracts and signed documents. Features include authentication
services, user identity management and workflow automation.
Dropbox: Founded in 2007 by MIT students, Dropbox offer Cloud
storage, file synchronisation, personal Cloud and client software.
EC2: Amazon Elastic Compute Cloud (EC2) is a simple web service inter-
face that provides secure, resizable compute capacity in the Cloud. It is
designed to make web-scale Cloud computing easier for developers.
Engine Yard: Engine Yard is a San Francisco, California, based, privately
held platform as a service company, founded in 2006 and focused
on Ruby on Rails, PHP and Node.js deployment and
management.
FedEx US: Established in 1973 and based on founder Smith’s 1965
term paper while at Yale, FedEx distribute packages worldwide.
Working from a private Cloud, CIO Rob Carter has sought to trans-
form FedEx into a Cloud-centric enterprise (Forbes 2015).
G Suite (Google): Formally Google Apps for Work and Google Apps
for your Domain, G Suite was first released in 2006 as a suite of CC,
productivity and collaboration tools, software and products. G Suite
comprises Gmail, Hangouts, Calendar and Google+ for communi-
cation, Drive for storage, Docs, Sheets, Slides, Forms and Sites for
collaboration; and, depending on the CC plan, an Admin panel and
Vault for managing users and services.
GitHub: GitHub is a web-based version control repository and Internet
hosting service. Founded in 2008, it provides access control and col-
laboration features such as bug tracking, feature requests, task man-
agement and wikis for every project.