Monetizing the Cloud is fast becoming a hot area of interest for everyone. Rightfully so, perhaps because we have come along in our evolution as Cloud technologists and are now able to see more than just being able to make things work on the Cloud. It’s time now to derive maximum value from the Cloud and as a need for any vendor is the need to generate revenue. What are the rules of monetization an how do we even get started? Let’s look at three things that essentially make up a monetization framework.
Provisioning – Enabling the End User
Providing the actual application or solution to the end user is the process of provisioning. Consider this. Ann is the system administrator at a large bank. Today she needs to provide access to 25 new staff members in their regional offices to all the needed necessary systems, software’s and platforms they will be using on a daily basis. The process of enabling their access, creating their accounts, allowing or restricting access to specific folders and files essentially is provisioning. The process of provisioning on the Cloud can be different for different things. For an automated Cloud infrastructure provider, creating a Virtual Machine with a selectable number of processors, add RAM, or storage can all be part of provisioning. For a SaaS/Cloud solution, creating a user account with specific access rights is also provisioning.
Meter – Measuring What Was Used
Once a user has been allocated access through provisioning, in order to be enable a real time consumption model, as an example, you would need to monitor the actual usage of the end user. In case of let’s say a Cloud Accounting solution, you would need to measure things like file size, or number of records processed, and so on. What is measured also depends upon your basic monetization business model. If you are monetizing the Cloud accounting solution based on the number of records created, then you need to be able to meter the database and keep track of how many tables or records have been created.
Bill – Pay For What You Used
Ultimately billing the customer on a daily, monthly, weekly or whatever time period suits you is the billing component. Make note of the fact that measurement and the frequency of the bill are two different things. Ever considered how your electricity consumption is measured every second and every minute of usage however you only receive a bill at the end of the month. Same for your cellphone. So while your end user may be billed in real time for their Cloud based Accounting Software based on every record, your accounting policies may issue a consolidated bill every month.
The Most Essential
Above and beyond the technicalities of Provisioning, Metering and Billing, lies your actual business model. The actual way you are planning to generate revenue. In other words if you were a baker, would you charge your customers by the type of bakery item they would buy based on specific price for each or would you charge them by weight, a flat rate for anything and everything in the bakery ? That, is where the actual work lies. Identifying the ways in which you will monetize your offering, creating something unique that will be measured, and charging your customers for a very specific aspect of your Cloud offering is the core of Cloud Monetization. Once you have that locked down, technology will assist you in making the right platforms and connecting you to the right technology.
So, don’t get too bogged up in technology and platforms, but instead focus on how your business and your offering will bring value to your customers and second how you will turn that value into revenue using a unique measurable aspect and third look into technology that will help you do this. By Ian Khan