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Creating Dynamic Business Models

Kate Lamb | July 19, 2011
With cloud computing fast becoming the digital future, businesses in Asia are looking to capitalise on the benefits of software-as-a-service (SaaS). The question is not if, but how these new technologies can be leveraged to generate more dynamic business models.

While cloud is all the rage these days, the corollary marketing hype has led to a multitude of definitions and confusion in the marketplace.  

Essentially SaaS, or cloud computing, encompasses subscription-based software services that are deployed over the Internet to run behind a firewall on a personal computer or local area network.

The technology will mean that much of computing in the future will no longer be performed on personal computers, but in the “cloud,” or through huge data centres and servers that store the information remotely, rather than on a hard drive or server at the office.

 “A lot of people are not clear on the distinction between a traditional enterprise software company and a cloud company. They seem to do the same thing in terms of selling software but their business value drivers are very, very different,” noted Au.

For the Berkeley-schooled computer engineer, the biggest driver for a traditional software company is to release the latest upgrade. For a cloud company which sells software on a subscription basis, he explained, the vendor is incentivised to maintain and improve services on a long-term basis.  

 

Logical Evolution

By eliminating the need to buy costly software, the subscription-based nature of cloud computing make it an attractive business and IT solution.

For Erik Berggren, vice president of research at SuccessFactors, the growing number of businesses opting to shift to the cloud is a logical IT and economic decision.

“Every year there is pressure to deliver more for less money. The cloud is a way to do this because you can reduce total sales. You are moving from fixed costs to variable costs and unleashing more innovation,” he explained.  

The increased flexibility that cloud computing offers is another significant benefit. The cutting-edge technology facilitates access to data and files whenever and wherever they are needed, whether that is outside of the office or in a remote location. As long as there is Internet access, users can essentially plug in and work on documents simultaneously from different corners of the globe.  

 

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