As a follow up to the earlier article on the IaaS business model, here is a high level overview of the SaaS provider business model and some of the strategic options that are in there. The business model canvas is a visual template for developing and discussion business models.
The business model canvas has nine basic building blocks and specific relations between those building blocks.
In the Business Model Canvas, “Customer Segments” are the groups of customers that the company ultimately serves, I.e.
The essential characteristics of cloud computing may or may not relate directly to the core value proposition of the software application.
The value proposition is fundamentally different in the second example, the project collaboration support site. Interestingly, the first provider could use this insight to extend its functionality beyond what would be possible in an on-premise solution. Value propositions are delivered to customers through communications, distribution and sales channels. It is often assumed that cloud computing relies solely on self-service direct sales, but the reality is much more diverse. For less invasive offerings, SaaS solutions are often aggregated in broker portals, often nicknamed ‘enterprise app stores’, whose added value is in consolidated billing, self-service provisioning, identity management, and potentially some data integration.
Another natural extension of the SaaS model is exposing the core functionality through an API.
The main SaaS channels therefore are direct self-service sales, value added re-sellers, system integrators, and enterprise app-stores. The lure of cloud computing is that the provider can have a much more direct relation with the customer than is possible with an on-premis solution. However, this power can bring the provider in conflict with the consumer who might object to its data being used. Support is often easier on-line, and on-line communities often add considerable value for the consumer. Revenue streams are the result of value propositions that are successfully offered to customers. The structure of revenue streams is where cloud computing differs from earlier IT service models. Cloud computing service models by definition are usage based, and have the potential to be much more closely related to the value that is experienced by the customers. Key resources are the assets required to offer and deliver the previously mentioned elements (e.g.
The core asset of a software company is likely to be its code base, its understanding of consumer requirements and processes, and the staff that does this.
It may seem a small matter to go from knowing your software and the way it runs at your customer’s sites to running the software yourself. The most obvious differences between cloud providers and software delivery companies are in multi-tenancy and feature velocity. Then, on the physical asset side, an important question is how much delivery assets the company decided to have. For this to be successful on the SaaS scale, it has to be executed as an integrated pipeline. A fundamental choice for every software company is ownership of development tools, as the dependence on these is of strategic importance. An additional fundamental choice for a SaaS provider is: who runs and owns the delivery infrastructure? In more traditional IT service models the revenue streams are tightly coupled to the cost structure. The most significant cost elements related to software development are in creating and maintaining functionality, and in maintaining the development and delivery infrastructure.
Interestingly, for a lot of SaaS companies, most of the development cost is about supporting future customer needs, not current customer needs. Again we see the business model canvas as a good tool to map out the particularities of cloud provider business models.
Aashna has rich experience in consulting and implementing cloud solutions across the globe. Aashna has been recognized for excellence in adopting innovative practices to become a role model as a cloud service provider.
Biswas Nair, Managing Director at Aashna Cloudtech said, “Aashna as a leading Cloud Service Brokerage firm stands out for its clients as a single point of contact for its ability to aggregate multiple cloud applications.

Aashna Cloudtech extensively focuses on robust processes and leverages leading technology vendors as partners.
Companies will be utilizing every type of system as they find the multi-cloud approach that works for them. The traditional advantages, including the cost aspect, do remain but are joined by a range of reasons to go cloud that are ever more about the speed and changing reality of business. There is a lot of research indicating how the use of multiple clouds within an organization is growing. A few vendors we spoke with expect that within a few years 90 percent of organizations will have a de facto multi-cloud environment. Vendor Equinix also released research end 2014 (conducted by Dimensional Research), finding that 77 percent of responding IT decision makers were planning to implement a multi-cloud architecture as you can see in the infographic from the Equinix blog below.
At the bottom of this post is an infographic, summarizing some key takeaways from the report and tackling the move to a hybrid multi-cloud environment and some challenges to tackle.
Regardless of all this data, in 2016 we effectively see a de facto rapid growth of multi-cloud environments.
As mentioned, the growing role of business in the whole equation and the changes in who buys solutions (decreasingly IT, increasingly business unitis), affects the role of enterprise IT and the CIO. ABOUT USi-SCOOP provides publications, educational resources, training and hands-on consulting regarding integrated marketing, digital business, transformation and organizational processes. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. The first one delivers bookkeeping software, the second one delivers a project collaboration platform. This is the central element that describes why the customer would ultimately pay for the product or service.
The core value proposition in our first example, automated bookkeeping, is unrelated to cloud computing. Here the cloud’s characteristic of broad network accessibility is directly driving the usefulness of the software when its users are spread over company boundaries. Think collaboration with accountants, suppliers and possibly customers, or channel partners. While not directly accessed by the consumer, this does allow integration with other SaaS providers. The notion of cloud broker fits in here as well, but dissecting its many shapes and forms is a topic beyond the scope of this article. As an example that is close to the limit of what might be considered acceptable consider the following case. Software firms traditionally relied on licensing arrangements that were somewhat usage based, and could be hard to enforce technically as well as legally. Both our examples enhance the productivity of users, and it is natural to charge per user who has access to the functionality on daily basis. For a SaaS provider, this is augmented with actual technical service delivery and understanding of consumer behavior. Every SaaS provider has to think about how multi-tenant his software needs to be to realize the right scalability model for its customers. That is why large software companies used to have their own homegrown development environments. After all, when the software is written, shipping it to customers has very low incremental cost, even though servicing customers has not. For the software delivery side there will be costs related to in company server infrastructure or incurred from key partners such as IaaS providers.
An exception could be the bookkeeping firm, that might be tracking tax regulations as they tend to change regularly. As IT shifts from on-premise to cloud-based models, Aashna has transitioned itself with a whole new approach in Cloud Service Brokerage (CSB). As a cloud service brokerage provider, Aashna Cloudtech provides the crucial connecting link between the consumer of the cloud and the cloud service provider enabling better integration and customization for the Enterprise. In fact, if we take into account the de facto usage of cloud services by specific workers and business departments, outside of IT, a lot of companies are already multi-cloud. The paper focuses on a fundamental shift in cloud purchasing and mentions how more than 40 percent of European organizations enterprises expect to manage a hybrid multi-cloud environment within the next two years (since the research was conducted). Again, this is partially logical and a consequence of, among others, growing experience with the cloud, business demands and the need for greater transparency and agility by several IT professionals which is being met with cloud management solutions whose function really is to enable transparency and the facilitation of the role of IT and the CIO, regardless of the multi-cloud reality, in a seamless way so they can focus on supporting business requirements and workloads.
The breadth and depth of change in enterprise business IT is not only accelerating, it is fundamentally changing how business is done – and can be done – which means faster and in more areas than any one organization can manage.

It is characteristic of the SaaS model that this could basically be anybody, not just IT people.
Of course cloud computing’s characteristics give the SaaS proposition an edge above its direct on-premise alternatives even if the functionality would be the same. That is why system integrators often experience the move from on-premis to SaaS as relatively painless. Our project collaboration software could integrate with an existing cloud storage provider.
Which software builder would not like to be able to see the popularity of every feature in real-time? An on-line bookkeeping service for individuals allows them to categorize payments to merchants. Transactional services such as event management or email delivery are more naturally charged by the transaction, potentially on a bulk basis. Feature velocity, the time between inception and go-live is a great competitive differentiator.
For a SaaS cloud provider, actually delivering the software as a service is an extension to that. It turns out that the development tools are a source of strategic risk, but not of strategic advantage.
For software as a service this is a little less so, as there is actual infrastructure supporting the service.
Gartner predicts that 20 percent of cloud services are going to be intermediated through CSBs by 2015. And of course and last but not least there is the awareness that without the cloud there simply is no digital transformation.
But just as many cloud brokers are moving from a cloud services providers and or cloud brokerage function to a cloud integration services model, expect IT to become more than a broker too. This presentation summarizes ongoing Saugatuck research and analysis into the key mega-trends that are shaping enterprise business and IT for the next few years, as well as the core technologies and market factors behind them. Let us just remind ourselves that customers here are the ones that use the service to get their business done, or get their personal lives in order. Self-service provisioning leads to quicker time to deploy, more scalability in usage (whether accounts or transactions), lower investments or commitments, and potentially lower cost. Once enough individuals categorized Danny’s steakhouse as a restaurant, this can then also be suggested to other clients of Danny’s. To realize it, the provider needs an integrated ‘DevOps’ organization, which asks a lot of people, process and technology.
The virtuous circle in a SaaS provider is understanding customer behavior and requirements, translating these into new functionality and delivering this to customers.
Tests are all automated and the focus of operational staff is not so much into bringing features in production, but to maintain the assets and operational fabric that allow the developers to do that themselves.
As the industry has matured, it turns out that significant portions of these are best moved to an open source model.
That is why it makes sense to work with IaaS or PaaS providers rather than owning the infrastructure. As an aggregator the CSB pulls together multiple cloud services and provides them to end customers.
The requirements of the typical first mover in cloud-based environments, marketing, are not the same as those of other departments.
Given that no single cloud fits all purposes in digital business requirements it’s obvious that the multiple clouds reality continues to grow.
In a business context we often also have to distinguish between the user and the organization that purchases the solution. It is not impossible for the loop from idea to wide customer feedback to be closed in a couple of hours. They are de facto having a multi-cloud reality whereby they have a range of clouds for various purposes.
Generally speaking, the answer is no, but it may be acceptable if only aggregate data is used.

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