Australians can expect to benefit from a marked increase in the number of businesses offering pay-per-use and subscription billing models, as well as a broadening of the range of available cloud services during the year ahead, according to a panel of Australian and New Zealand industry experts that met in Sydney last week.
The panel, which gathered to consider how cloud services will affect Australian businesses and industries in 2015, was moderated by Frost & Sullivan Managing Director, Mark Dougan.
Participants included Chris Petersen, CEO and founder, Asset.Guru; Peter O'Connor, Vice President Asia Pacific, Nimble Storage; Gareth Berry, CEO, Unleashed Software; and Kim Benito, Vice President – Professional Services APAC, Zuora.
iTWire was there to capture the entire discussion, lunch event, media questions and participants answers on video, which we present to you embedded below:
Drawing on the results of Frost & Sullivan's 2014 State of the Cloud report, Dougan said, “Seven in ten Australian organisations currently use some form of cloud computing services. Two-thirds of those companies say the cloud has significantly improved their business performance and our research shows that on average, use of the cloud leads to IT cost savings in the region of 12 per cent. It's a compelling story that we expect will encourage further cloud adoption and the exploration of new business models over the next five years.”
Enthusiasm for these new business models is supported by the rise and rapid acceptance of subscription services among global names such as Amazon Web Services and Spotify.
Locally, Kim Benito of Zuora, pointed to Deloitte, Sensis, Fairfax and Weight Watchers as examples of organisations that are changing their models to attract new clients and build a closer relationship with existing clients.
“It's often overlooked, but one of the biggest benefits for the buyer and seller in the world of cloud is a much tighter relationship. By its very nature, cloud pricing and packaging models are much more in balance with no particular bias towards buyer or seller. Well thought-out commercial models are allowing smart service providers to disrupt the less agile existing players,” Cullen said.
The opportunities for new service and billing models are well illustrated by Nimble Storage, which now complements its traditional pure hardware-based storage solution model with a consumption-based fee model.
O’Connor explained, “Nimble now provides rental infrastructure on a pay per use basis. With the cloud as the delivery mechanism, users can access our cloud storage platform, either in-house or through the storage provider of their choice, and only pay for storage as it is consumed. This is a major break from the past when organisations used to have to buy on average two years of storage up front. It's a far more efficient approach for the buyer and one that places almost as much focus on the billing model as it does on the product itself.”
Aside from changes to business models, Petersen suggested interconnectedness will form the focus for much of the innovation and disruption fostered by the cloud in 2015.
“We've moved away from the point systems of the '80s and 90s, and now everyone is looking at how various parties can interconnect to provide a single solution to the customer. When a SaaS vendor integrates their offering with other SaaS vendors, all of a sudden they find themselves offering a low-risk, enterprise-grade process with global market reach. Today’s vendors are providing solutions that used to cost anywhere from $200,000 to $2 million dollars at a low per user, per month cost.”
“What we have experienced is that small organisations using Asset.Guru can operate with the corporate rigour of a large company, and larger organisations using start up software have a doorway to the more innovative thought processes and product solutions of a young company. This is what is enabling transformation in software, and the software is transforming industries,” Petersen added.
Berry, the CEO of leading inventory management software company, Unleashed Software agreed, saying, “The idea of leveraging services delivered by the cloud has become a key foundational element that almost any business person needs to embrace and leverage. It's 2015 and business is conducted from more than just a single address.
"Entrepreneurial Australian SME businesses such as Zaffero Lighting and Miglass High Performance Windows are demanding more flexibility from their systems. They want to enable their staff to break free from the shackles of the old way of doing things and have their key information, data and business tools available to them whenever and wherever they need them. And this means software and services in the cloud, accessible on a multitude of devices.
“Demand for SaaS services will continue to be strong among SME businesses in Australia throughout 2015. We are still only in the first few years of a much larger technology adoption cycle.”