The cloud business models make use of open networks as the means to market and deliver software-based services on demand to the member of the internal and/or external value network. These business models make use of open interfaces, web technology, cloud platforms distributing processing and storage to the Internet, and also often open source software. Business in the Cloud research area investigates how the adoption of could technology impacts the business models and business environment of firms in software firms and related industries. Using software as a service over the Internet shifts emphasis from high transaction costs of software product and project delivery to pay-as-you-use revenue models as well as from in-house IT deployment and maintenance to use of large-scale sustainable processing capacity in the net. The architectural changes change the roles of users and providers of functionality and value generated throughout the business networks, e.g., increases importance of usability and flexible service creation as well as changes requirements for infrastructure and end-user devices and software.

The changes in the business environment require Finnish ICT firms to re-position their offering in the new business environment. Use of external providers for processing and storage capacity relieves both the software vendors and service users from secondary IT maintenance functions. Decreasing unit costs further intensify competition. Providing services through the Internet lowers the sales and deployment costs when serving distant customers. This both enables easier entering for foreign companies to the Finnish market and provides opportunities for the Finnish providers to serve even narrow international market segments. The role of IT integration business will change accordingly and importance of value added services as a revenue stream generator will increase. Firms need also find strategies to converge their traditional software assets to support the new business models.

The focus area involves increasing the diffusion of effective modern software business strategies, models, and value creation networks. This aims at converting software assets and technology to sustainable ecosystems providing significant economic value. This work package improves the understanding of the actions needed for a successful transition and implementation related to the business strategy and business model elements. This includes elaboration of value proposition, relationships (organization and networks), earning models, positioning, product and/or service offering, resources (software assets and capabilities) and competitive strategy. In addition, the objective is to define and develop skeletons of business and strategy models, methods, tools and metrics to be used within the cloud software business.

Pasi Tyrväinen
Professor
University of Jyväskylä

---

Related publications:

Summary of cloud computing and transformation of international e-business	Value-driven business in cloud