Industry Trends in Cloud Computing

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 © The Editor(s) (if applicable) and The Author(s) 2018 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and trans- mission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: Kiyoshi Takahase Segundo / Alamy Stock Photo Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Springer International Publishing AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland 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 disruption. 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 connected 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 Foreword 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 integrated 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 software 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 services 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 variety 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 company 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 management and file sharing services B2B provider.

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