Cloud Business Models

I think it’s important to understand various cloud services out there. It’s one thing to design some desktop software and put it in the cloud for someone, but it is another to offer 1 or 2 year contracts with 30 training hours or 60 training hours etc. one on one with customers. The purpose of the cloud is to offer a service on a contractual basis. Otherwise, why not just use desktop software? The diagram above is from Subscribed by Tien Tzuo.

When running a software company, it’s good to have both Business to Consumer B2C and Business to Business (B2B) Options. For our software, we may be offering a desktop edition of the software in virtualbox and a 1 month trial in the cloud for B2C customers. For B2B customers, pharma companies, large academic labs, clinical trial companies, chemical companies etc., we offer personal clouds with training. Once we have the customer hooked, we can maybe get them to upgrade from a year enterprise plan to a 2 year plan or the ultimate goal, a special partnership with us. B2B contracts are obviously larger and much more involved, so you do not need thousands of customers to scale to in order to make a profit. A partnership would obviously require customers to set up business plans with us. By having multiple options we give customers flexibility for whatever size business they have, whether it is a single student user or a large chemical company.