Welcome!

Government Cloud Authors: Liz McMillan, Gopala Krishna Behara, Raju Myadam, Kevin Jackson, Carmen Gonzalez

Related Topics: @CloudExpo, Agile Computing

@CloudExpo: Article

Cloud Computing is a Better Business Model

The technology of The Cloud is evolutionary, but the business model is revolutionary

Andy Mulholland's CTO Blog

‘Complementary’ models are an integral part of Cloud Computing..
.

I have wondered for most of the last couple of years just how long ‘free’, meaning paid for by advertising, services on the web could go on for, and with a recession looming this seems to be the time that this could get cut back. However when I look into this a little more carefully I find that my impression of ‘free’ as a business model supported by advertising is perhaps already out of date as the successful players have used ‘free’ to reach either ‘freemium’ or ‘complementary’ models. Even more interesting it would seem that the ‘complementary’ models are an integral part of Cloud Computing.

Let’s start with ‘freemium’ as a business model, meaning give something away for free to create a market and demand, then charging those who are looking for more than the basic service. Adobe would be the grand daddy of this to me, just look at Flash, or PDF, to see what ‘free’ downloads have done to create a global market standardised around your technology, then consider what this has created in terms of a ‘locked in proprietary’ market for their professional products. Am I complaining? Well, no I am not, as in general I reckon we are all the beneficiaries of Adobe using the ‘freemium’ model. At one end as consumers and at the other by being able to build documents and graphics that we know people will be able to consume. In short ‘freemium’ models work when the balance is set to win- win.

The challenge is exactly how many areas can this work in? I mean is there an indefinite number of consumer end additions that a reasonable number of us are going to want? Take a look at Silicon Alley where they have compiled a list of companies who are working the ‘freemium’ model, try and see how many you are tempted to download from because it seems to offer reasonable value to you as a user. As this piece comments the interesting thing is some of the best known success stories such as Flickr and LinkedIn started as advertising supported and migrated into ‘freemium’ funding so perhaps I am thinking about this into too narrow a way and the model can apply more broadly to sites and services too.

However the real money, both as an investment to get started and in terms of potential to build an unassailable position, belongs with the ‘complementary’ model, and there is no finer example of this than Google. Hang on a minute is not Google the absolute best example of advertising funding? Yes it is, but the Google franchise runs wider and deep these days so more income is starting to come from other sources. The basis of a ‘complementary’ model is very very old, in fact the usual example is the ability to sell mustard to go with the purchase of a hot dog. This doesn’t work for me as usually I expect to get the mustard for free, but try going into a restaurant for a fixed price meal that looks attractively priced and see how much you pay for drinks plus coffee or tea. That’s where the real margin is made.

Google is using free, as in the search engine, to build a huge information base, which it can sell not just as advertising, but as a widening range of complimentary services to commercial users. Think Google maps as an example. Nicholas Carr treats us to his view on this in a longish, but quite interesting blog which I personally found to have some good perceptive insights, including a comparison with Microsoft.

The key question is how to make the various elements of a ‘complementary’ business model accessible to be consumed, by the ‘net economy’ as Nicholas Carr calls it. This brings us back to the Cloud Computing model, not the current much discussed element around using cheap MIPS, but the two higher layers around business services and most of all around ‘platforms’. If you want to understand the Cloud Computing model and its layers then take a look at my past post on this. If you want to make money by getting people/businesses to buy a complementary service then you have to have a way to deliver it, and unlike content this is not likely to be a static page to be sent, but a full on interactive ‘service’ that has to be able to run independently of the people/business using it as part of their process. In other words there are a whole series of major industry players out there who need to get the Cloud Computing model in place to be apply to maximise the use of their ‘services’ and revenues!

So there you have it; whether its IBM, or HP, Google or Amazon, Oracle or Microsoft just to mention a few names they all want to create the Cloud Computing model as a way of making a better business model for them, and to be fair I think for all of us in the same way as the ‘freemium’ model it will be a win-win. As a colleague remarked the technology of the Cloud is evolutionary, but the business model is revolutionary.


[This post appeared originally here and is republished in full by kind permission of Cap Gemini and the author, who retains copyright.]

More Stories By Andy Mulholland

Andy Mulholland is Global Chief Technology Officer, Capgemini Group. He is giving a seminar at Storage Expo, the UK's largest and most important event dedicated to data storage, now in its 4th year. The show features a comprehensive FREE education programme, and over 90 exhibitors at the National Hall, Olympia, London from 13 - 14 October 2004. (www.storage-expo.com)

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
Leading companies, from the Global Fortune 500 to the smallest companies, are adopting hybrid cloud as the path to business advantage. Hybrid cloud depends on cloud services and on-premises infrastructure working in unison. Successful implementations require new levels of data mobility, enabled by an automated and seamless flow across on-premises and cloud resources. In his general session at 21st Cloud Expo, Greg Tevis, an IBM Storage Software Technical Strategist and Customer Solution Architec...
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.
Imagine if you will, a retail floor so densely packed with sensors that they can pick up the movements of insects scurrying across a store aisle. Or a component of a piece of factory equipment so well-instrumented that its digital twin provides resolution down to the micrometer.
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
BnkToTheFuture.com is the largest online investment platform for investing in FinTech, Bitcoin and Blockchain companies. We believe the future of finance looks very different from the past and we aim to invest and provide trading opportunities for qualifying investors that want to build a portfolio in the sector in compliance with international financial regulations.
No hype cycles or predictions of a gazillion things here. IoT is here. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, an Associate Partner of Analytics, IoT & Cybersecurity at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He also discussed the evaluation of communication standards and IoT messaging protocols, data...
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
When shopping for a new data processing platform for IoT solutions, many development teams want to be able to test-drive options before making a choice. Yet when evaluating an IoT solution, it’s simply not feasible to do so at scale with physical devices. Building a sensor simulator is the next best choice; however, generating a realistic simulation at very high TPS with ease of configurability is a formidable challenge. When dealing with multiple application or transport protocols, you would be...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
We are given a desktop platform with Java 8 or Java 9 installed and seek to find a way to deploy high-performance Java applications that use Java 3D and/or Jogl without having to run an installer. We are subject to the constraint that the applications be signed and deployed so that they can be run in a trusted environment (i.e., outside of the sandbox). Further, we seek to do this in a way that does not depend on bundling a JRE with our applications, as this makes downloads and installations rat...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
DX World EXPO, LLC, a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lead...
Digital Transformation (DX) is not a "one-size-fits all" strategy. Each organization needs to develop its own unique, long-term DX plan. It must do so by realizing that we now live in a data-driven age, and that technologies such as Cloud Computing, Big Data, the IoT, Cognitive Computing, and Blockchain are only tools. In her general session at 21st Cloud Expo, Rebecca Wanta explained how the strategy must focus on DX and include a commitment from top management to create great IT jobs, monitor ...
"Cloud Academy is an enterprise training platform for the cloud, specifically public clouds. We offer guided learning experiences on AWS, Azure, Google Cloud and all the surrounding methodologies and technologies that you need to know and your teams need to know in order to leverage the full benefits of the cloud," explained Alex Brower, VP of Marketing at Cloud Academy, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clar...
The IoT Will Grow: In what might be the most obvious prediction of the decade, the IoT will continue to expand next year, with more and more devices coming online every single day. What isn’t so obvious about this prediction: where that growth will occur. The retail, healthcare, and industrial/supply chain industries will likely see the greatest growth. Forrester Research has predicted the IoT will become “the backbone” of customer value as it continues to grow. It is no surprise that retail is ...