- Simplicity of Delivery: Cloud provider must maintain on 1 release of software as opposed to 2-3 releases at a time. Lower Engineering costs.
- Prevent Piracy: As delivery of software is only on Cloud – crack copy CD is impossible. Applicable for consumer software – MS Office or Photoshop
- Easier to Sell: Less cost of sales as software is standardized. Low cost of adoption.
- Easy Adoption by LOB: Now CFO or CMO can buy their tools without having to go through CIO
- Long break-even period offers natural barriers to entry: Economy of scale – takes time to break even, once you break even at a scale – very hard for new plays to come in. Kind of winner takes it all.
- Attrition risks: Customer Success is a new focus
- Technology risks: a single fault could impact many clients
- Less Sticky: Unlike traditional software where “Sunk Cost” fallacy keeps the software sticky – there is little stickiness with Cloud software due to Subscription pricing!
Recent news on Partnerships
- SAP - Google
- Salesforce - IBM
- Adobe - Microsoft
Thank You, Ankur Katiyar
Further Reading on Adobe's transformation : Reborn in Cloud , Adobe Completes Swift Business-Model Transformation
Disclaimer: Opinions expressed are solely my own and do not express the views or opinions of my current or past employer.