Cloud-based business models challenge tech firms – study


24 Apr 2012

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High-tech companies are grappling with the need to transform traditional business models to more complex ones in order to provide new services based on cloud computing, a new study by Accenture suggests.

Those business models, more specifically, pertain to the shipping of hardware products or packaged software.

Many senior leaders also lack a clear understanding of how the complexity of the new business models will affect operations in nearly every area of their companies, reveals the study, titled Where the Cloud Meets Reality: Scaling to Succeed in New Business Models.

This disconnect will become increasingly important, according to the study, because most leading technology companies expect to generate revenue growth through five or more business models by 2015, several of which are likely to be based on cloud. These companies typically have two to three business models today.

“Growing cloud-based business models is highly strategic and an immense undertaking for high-tech companies,” said Mitch Cline, global managing director with Accenture’s Electronics & High-Tech group.

“Companies face enormous operational challenges in determining how to support these new models and deliver the world-class experience demanded by enterprise customers, in particular. Companies aren’t prepared today, strategically or operationally, to cope with the magnitude of disruption they’re facing.”

To help companies overcome the challenges, Accenture recommends they:

  • Determine how many business models they have today and which new ones are needed to capitalise on market opportunities.
  • Identify and build distinctive capabilities needed to deliver business in the cloud.
  • Develop a segmented operating model to deliver distinctive service capabilities with the right customer experience and economics.
  • Implement a governance model for making key resource allocation and other critical decisions.

Accenture conducted interviews from May 2011 through November 2011 with more than 40 senior executives from 30 companies that operate, or are building, Software-as-a-Service, Platform-as-a-Service or Infrastructure-as-a-Service cloud-based businesses.