<This blog is background material as part of my 2017/2018 VU lecture series >
As companies transition their product delivery methodology from on-premise software to a As A Service (PAAS/SAAS) model, they are confronted with very different motions across their Sales, Marketing, Development, Services and Support organizations.
One of the examples that show the difference how ‘execution’ is done in these models, is how Services and Product is managed across the organization. For larger on-premise software companies it is not uncommon to see Professional Services (PS) bookings v.s. software bookings rates of >3, meaning that customers pay more for the implementation and assistance in software management, then the actual purchase price of the software.
The Cloud delivery model has very different PS dynamic, as Waterstone reports in their 2015 report – changing Professional Services Economics ;
“There is growing preference for Cloud- and SaaS-based solutions that, on average, have a PS attach rate around 0.5x to 1.0X (versus the 2.9x PS attach rate commonly seen with traditional licensed products).”
The analysis is not strange, as Cloud is all about providing low friction of onboarding by self-service and automation. This means getting the human out of the equation, as it’s a limiting factor in scalability and raises cost.
Cloud is all about minimizing the time from idea -to- revenue, while being able to scale rapidly and keeping cost low.
The definition of ‘the product’ in a Cloud world therefore isn’t only about the bits & bytes, but includes successful onboarding of the customer and maximizing their usage.
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I recently started a lecture series at the Vrije University of Amsterdam (VU). As part of this I did a lecture on how to operate unreliable Information Systems in a reliable way – or: Everything breaks, All the time.
Behind the clouds of cloud computing! How can we reliably operate systems that are inherently unreliable?
What if for some hours, we do not have access to the services such as navigators, routers, and other communication technologies? It seems our life will be at stake if major digital services fail! Many promises of digital technologies, from big-data to the Internet of the things and many others are based on reliable infrastructures such as cloud computing. What if these critical infrastructures fail? Do they by the way fail? How the responsible companies and organizations manage these infrastructures in a reliable way? And what are the implications of all this for companies who want to base their business on such services?
As part of the lecture we explored modern complex systems and how we got there, using examples from Google and Amazon’s journey and how it relates to modern enterprise IT. We used the material of Mark Burgess to explore how to prevent systems from spiralling out of control. We closed off looking at knowledge management based on the ‘blameless retrospective’ principles and how feedback cycles from other domains are helping to create more reliable IT.
Relevant links supporting the lecture :
The used presentation can be found here: VU lecture
Recording of the session is available within the VU.
VU Assistant Professor Mohammad Mehrizi posted a nice lecture review on LinkedIn, including a picture with some of the attending students.