The “As a Service” business model is spreading like wildfire – in the tech sector and beyond. This is the first of a series of observations about this old, but new again approach to business, and what it implies for both the providers and consumers of services.
For the first in this series, my own attempt at a basic definition:
“As a service” (AAS) refers to businesses that sell their goods on a subscription basis. The more traditional alternative is to sell once, and upon that sale, transition ownership from the seller to the buyer. The change in ownership is perhaps the core differentiator between “traditional” and service-based businesses. In the AAS model, the change in ownership either:
- Happens slowly over time, as in the case of businesses whose services is to deliver information or products over time – think “Cheese of the Month club” or magazine subscription.
- Never takes place at all. In this pure service model, the seller retains ownership, and in essence sells access to use the goods. This is of course the model being implemented by Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS) vendors that make up the hot “cloud provider” market.
That’s my attempt at defining AAS in the broadest possible terms. All comments and better definitions welcome and encouraged!
Next time – Why switch?
I’ve spent a lot of time this year with clients including VMWare, Grid Dynamics, SymbioWare and others who are thinking about (and betting on) the future of cloud computing. To figure out what’s real and what’s hype, we’ve also talked to dozens of VPs of Engineering and IT about their priorities and plans.
Here are a few predictions for the challenges and opportunities that will be floating around in the cloud in 2011.
- Enterprises are going to continue to combine traditional IT with private and public clouds – picking the best and most appropriate of these models for each application or business process.
- The different stacks will still need to interoperate, so IT organizations will be looking for tools that were designed to operate and manage these hybrid environments.
- These mixed environments will spawn a new generation of applications that are deployable anywhere.
- Though cloud is a hot topic among IT execs, ultimately it’s a means to an end – and that end will decidedly be flexibility in 2011, marking a change from the laser beam focus on cost reduction of past years.
- Security is the #1 reason companies don’t do more in the cloud. 2011 should be a big year for vendors who can address their concerns.
- Greater cloud adoption will place more strain on the network, and network infrastructure vendors will be scrambling to support the growing demand for speed and bandwidth.
- With so many productivity and business tools now available in the cloud, small and medium businesses (SMBs) are able to draw on much more sophisticated and powerful IT resources. But making sense of the options and how they all work together will be a big challenge. That makes for a big opportunity to help SMBs assemble the right SaaS portfolios.
- SaaS for mobile will take off in 2011, likely outpacing new SaaS offerings for desktops. Lots of factors conspire here: HTML5 adoption, IaaS providers catering to mobile – witness Amazon’s recent release of Software Development Kits (SDKs) for Google’s Android and Apple’s iOS), and the fact that computing power and storage space are more scarce on mobile devices than the desktop.
- As usual with a hot IT trend, there will be plenty of companies throwing “cloud” into their marketing spiels long before they have made any substantive changes to their product offerings. Buyers will have to spend some extra due diligence cycles weeding out the pretenders.
Lots of companies are diving into their annual planning process. Many will find that time and resources are wasted on seemingly useless high-level discussions that don’t lead to specific actions, that some stakeholders participate but later don’t follow through on key portions of the plan, and that there is little consistency or coordination around how groups make decisions and set priorities.
That’s because they’re focusing on the content of the plan, while ignoring the other pieces that are absolutely fundamental to its success. Whether you’re creating a 5 year strategic plan for an entire company, or an annual operating plan for a department, consider all 3 parts of the planning process:
1. Structure : HOW you will arrive at your plan
- Outcomes – What is the scope of the plan, and what are the key decisions to be made? What should happen once the plan is completed?
- Process – How much time do you have? Which parts of the company need to be involved? How often will you meet, and what work must happen between meetings?
- Decision frameworks – What will be the criteria for the key decisions? What inputs are needed ans what will be your sources of information? What analysis will be required, will it be bottoms-up or top-down?
- Action – How will you structure and communicate the final plan to the various stakeholders? How will you make sure that everyone understands the decisions and aligns their actions towards the goals in the plan?
2. People – WHO will create, approve, own, and execute the plan?
- Stakeholders – Who are the key stakeholders for this plan, and what form of participation and communication is appropriate for each?
- Ownership – How will you ensure that key process participants take ownership for the quality of the entire plan and look beyond their own functional areas?
- Collaboration – What will you do elicit relevant expertise in your organization, enable open-minded idea creation, and reach decisions in a timely manner?
- Communication – How, when, and what will you communicate to whom in order to keep the organization informed about the progress and outcomes of the planning process?
- Commitment – How will you gain the commitment of the management team to align resources to plan objectives? Will there need to be any changes in responsibility, authority, or incentives in order to ensure commitment and ability to execute?
- Change management – How will you need to prepare and guide the organization though any changes that the plan requires?
3. Content – WHAT will the contents of the plan be?
- Financial or market objectives
- Operational execution goals
- Market, competitive, or supply chain analysis
- Strategies and tactics for reaching objectives
- Prioritization of key initiatives
- Action plans and time lines
- Budgets
I’m always looking for examples of organization who do all three components of planning well. If your company does, please comment or email me to share your experience.
