Cloud Business Models Matter

Choice | Cloud | Cloud support | IT Infrastructure | IT Management

Cloud Business Models Matter

Choice | Cloud | Cloud support | IT Infrastructure | IT Management

Do Cloud business models matter? Should you be aware of the way your chosen Cloud supplier delivers its services? There was a time when the provision of IT services was predominantly an in-house function; from computers to software, printers to storage, the IT department was responsible for it all.  This total control over a diverse range of responsibilities meant that the IT department was ‘blessed’ with a multitude of supplier relationships, each of which were eager for their business. As such, the in-house IT team could not only easily compare and contrast features, but they could also select the best price and supplier terms – they were largely in control.  But with the proliferation of Cloud and the now wide-spread reliance on hosted infrastructure this model has evolved, which has asked new questions of tech decision makers, including the need to maintain flexibility and avoid an over-reliance on a dominant Cloud hyper-scaler.

Arguably, when there is a lot of choice, a supplier’s Cloud business model is less important to the customer who can simply assess their many different options and select the most suitable.  However, when choice is restricted, when a customer has fewer options, Cloud business models become much more important. So as corporate IT has shifted away from only in-house infrastructure towards external, hosted Cloud services, have end users got more or less choice?  Likewise, is their ability to alter Cloud suppliers in line with changing requirements getting easier or harder?

In the past, failure to adequately scrutinise a supplier’s business/pricing model could be expensive. It could also be a challenge to untangle a customer/supplier relationship. Nevertheless, with choice came options and the larger organistions could always simply change, choosing to bear the inconvenience and cost in return for a better deal. However, if you’re a smaller business and less able to absorb the costs of poor choices, then getting Cloud right as quickly as possible is critical.

Walled Garden
As organisations have become increasingly reliant on a smaller number of dominant Cloud hyper-scalers the danger of becoming restricted by any one specific environment, that may or may not work easily with services from other providers, is now a very real operational issue. Cloud should enable flexibility and the opportunity to change and innovate, not hinder it. Once again, if you’re a large organisation with plenty of resources and customer ‘clout’ then this is, possibly, less of an issues, but if you don’t have these resources and influence this could turn out to be a very real problem.

Tech decision makers need to ensure that the supplier’s business/pricing model is transparent and contains no hidden uplift clauses.  This is very important when a service is at first free-of-charge.  Free or low-cost services often appear very attractive, but cross over a usage level and they can quickly become very expensive.

Charge on Headcount
Also, how is the supplier charging for its services? Are they charging for the amount a customer uses the service or the number of people who can access the service?  The cost of a service that is a charge on headcount not usage can easily get out of hand. Businesses that are enjoying a period of growth can easily fall victim to this type of pricing model.

How flexible is the supplier’s business model?  As a customer’s needs change can the supplier’s Cloud business model flex accordingly or is it intentionally rigid either to restrict usage or to impose hidden charges?  Does the supplier’s business model support or hinder a customer’s ability to switch suppliers? Is freedom to choose restricted or enhanced?

Features and benefits remain important, but the terms by which they are supplied are more important now than ever before.  Choose a supplier with the wrong business model is no longer simply expensive it could now undermine the very future of a business.

At Flexiion our Cloud business model is all about flexibility and helping our customers maintain their freedom of choice. We’re led by our customers’ business objectives not a set product list. We help our customers get the Cloud solutions they need, when they need them free of any brand preferences or predetermined technical approaches. Importantly, our Cloud pricing model is transparent so you clearly know what you’re buying and at what price, which can easily flex with your changing requirements.

Check out our Horizon Scan video series in which we discuss business implications of tech decisions, and more.

Simon Lofthouse, CMO, Flexiion



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