The Cloud Economy
"The Times They Are A Changing"
and so do our business models.
Cloud Economy is a fresh and revigorated way to deliver technology to customers. It balances technology and business innovation in a combined approach to enable customers to achieve more.
It is also a stimulating engine to accelerate and scale the business with a significant impact on company valuation.
Yet, shifting to the Cloud Economy is not trivial and requires a set of tools and expertise to become leader in the new era.
What is the
Examples of Cloud Economy products
The Cloud Economy refers to a set of advanced business rules that have emerged with the raise of Cloud Computing and are quickly expanding across many industries.
In the Cloud Economy, products are proposed “as-a-service” and include most of what is required to address a specific customer usage. It may include applications, hardware devices, services, data or content, communication network in one single offer, often proposed as a monthly subscription.
The recurring nature of the product motivates a link between the vendor and the customer often materialized in the form of an online customer portal.
Microsoft 365, Dropbox, Netflix, Gmail, Spotify count among the most popular Cloud Economy products. Millions of others are distributed among thousands of categories such as Device-as-a-Service, Smart Business Analytics, HR Portal as-a-Service, Predictive Maintenance, Energy Saving Platforms, or E-commerce as a service.
Hence, Software-as-a-Service is a sub-category of the Cloud Economy.
Is Cloud Economy similar to SaaS?
Software-as-a-Service is a recent delivery model that allow users to access their application through an internet browser or a dedicated application frontpage. The software runs on a multi-tenant Cloud infrastructure (a single instance serves all users) and it is proposed to customers on a monthly or yearly subscription.
Hence, Software-as-a-Service definitely belongs to the Cloud Economy. Yet, Cloud Economy products may also propose other business models (examples: Uber or AirBnB do not propose monthly subscription), may run on local devices (examples: Adobe Creative Suite) and include way more services, data, and hardware devices beyond the software.
What's new for the customers?
With the accelerated pace of technology innovation, customers are increasingly looking for solutions that
stay up to date with the latest technology
are immediately up-and-running for a given usage (time to value)
are affordable through operating expenses
Cloud Economy products meet those requirements. In addition, the data flow between customers and vendors allows these latter to provide more benefits such as proactive services based on consumption history. For example, Spotify users are proposed a “Discover Weekly” playlist based on their music listening profile.
What are the benefits for the providers to shift to the Cloud Economy?
Inspired by tremendous success stories, many BtoB and BtoC providers are looking to shift to the Cloud Economy. Their motivation includes:
Scaling and accelerating their business through a friction-less and industrialized approach
Reaching incremental business thanks to a reinforced value proposition and an easier access for the customers
Increasing profitability and cash of the company with a customer value-based pricing and a streamlined revenue collection process
Reinforcing a captive business model thanks to a customer success focus
Augment the company valuation through a recurring engagement with the customers
How may providers shift to the Cloud Economy?
For transactional companies that use to sell products and services as a one-off sales effort, shifting to the Cloud Economy almost require to rewire all functions of the company with a new set of business links.
It often changes:
The customer profile and motivation
The P&L management and the related metrics
The Product Lifecycle management and the R&D
The production and support operations
The magnitude and the implication of those changes explain why many companies, while motivated to shift to the new paradigm were not able to escape their own status quo.
How is Lemon Operations helping?
Lemon Operations has worked with thousands of companies all around the world, being IT vendors and channel, ISVs and Manufacturing Companies, to shift to the Cloud Economy.
We have built fast-forward programs that allow companies to set their own Cloud Economy MVP (minimum viable product) within 90 days.
Thanks to our design framework, our simulation tools and our Business Makers expertise, we are enabling the whole transformation process and saving companies from the most common pitfalls.
We believe that change does not drive the success, but success leads to change. Hence, our programs are pragmatic and customized to reach fast business achievements that will trigger long-lasting transformations.