Mind+machine by Marc Vollenweider

Author:Marc Vollenweider
Language: eng
Format: epub
ISBN: 9781119302919
Publisher: John Wiley & Sons, Inc.
Published: 2016-11-07T00:00:00+00:00

As you will see in Part III, the Use Case Methodology is ideally suited to the PAYG model. Of course, there is also the vendor's perspective, be it an internal vendor like a central data analytics team or an external vendor like InsightBee. There are advantages and disadvantages. Let's analyze three advantages first:

Huge addressable market: Innovative attackers can easily overtake sleepy incumbents, but some of them have grabbed the PAYG opportunity. What would have happened if Microsoft had not switched to its cloud and mobile strategy? Microsoft's share price has doubled since April 2013. Assigning the full gain to its PAYG strategy in the cloud would certainly not be justified, but the commercial cloud offering is growing quickly and has already surpassed USD 9.4 billion in Q4 2015. A lot of it is PAYG of some kind. Adobe's share price has more than doubled since April 2013. Adobe has also gone completely cloud and mobile and largely PAYG. Its three key areas, Creative Cloud, Document Cloud, and Marketing Cloud, are both expanding existing markets and addressing new customer segments. In fact, Adobe estimates its 2018 market opportunity to be around USD 27 billion.12

Attackers love it: Where sleepy incumbents have been slow to adapt, the attackers are having field days. Companies like HubSpot in CRM and marketing or players in human resources, such as Zoho, Workable, or SnapHRM, are growing aggressively in a field formerly dominated by the heavyweight enterprise resource planning (ERP) system providers. Clearly, some incumbents have not switched their strategies as aggressively as Microsoft and Adobe, and are therefore going to be subject to the onslaught by such agile attackers.

Shorter sales cycles and lower cost of sales: Services provided in the classical enterprise model have extremely long sales cycles, from at least a few months to several years. Due to the much lower barriers to entry, the sales cycle can be minutes in some cases. Due to the cloud nature of most of the PAYG models, the costs of sales are much lower than the costs of the classical enterprise sales. Granted, there are hybrid models and the classical key account managers are still very valuable, but addressing the small and medium-sized companies market is now possible.

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