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Investigating new business models for cloud computing high risks and high rewards in a constantly changing world

A new academic paper takes an in-depth look on how the evolution of cloud computing affects the business models of international ICT companies.

The researchers from University of Oulu define cloud computing as applications that are hosted on data centers and delivered over Internet as services, exemplified by the well-known Dropbox.com service, among others. For the business side, the major benefit of cloud computing lies in its "intrinsically international" nature brought forward by virtualization. When resources such as networks and storage can be provided to customers in the cloud, the traditional ICT business model characterized by physical deliveries and installable applications loses some of its applicability.

It is difficult to over-emphasize the significance of the right business model in such a changing environment. In fact, a mediocre technology within a powerful business model is often seen as more valuable than a powerful technology within a mediocre business model.Therefore, the question becomes: what are the powerful business models of the current cloud computing era?

Unfortunately, the study finds that there are no magic bullets for this question. While the traditional, static business model is seen as insufficient for today's complex and uncertain business environments, there exist very few established alternative guidelines either, which leaves the door open for innovative and dynamic solutions. "A dynamic conceptualization of the business model is still in its infancy", the researchers state.

The report also presents two in-depth case studies from Finnish ICT companies that made a change intheir business model towards cloud  operations. In addition to gaining valuable first-hand information on cloud  computing business models, the experiment was also a success on commercial grounds: Both companies increased their number of customers and identified  new bottlenecks.

The big data center proovider CSC — IT Center for Science Ltd   collaborated with the University of Oulu researchers. The team from CSC included directors, technology professionals and business process professionals, and this wide knowledge base of the working group was instrumental for the success.

Based on further experiences from the study, the report urges fledgling cloud businesses to have realistic expectations for their transformation, and to not forget marketing in the physical world. If you build it, they may  still not come: "Both case companies found that cloud does not mean automatic internationalization. The service or the product needs to be sold to customers, and international selling, pricing, and charging as such require efforts and marketing that could not be carried out in the cloud."

The paper, Cloud Computing and Transformation of International e-Business Models, was presented at Magdeburg's SKM Symposium on September 2013 by Petri Ahokangas and Marko Juntunen from the University of Oulu, who co-authored the paper along with Jenni Myllykoski.

To read the summary of report, see


Cloud Software Finland is a four-year programme of Digile (2010-2014), which focuses on developing various aspects of cloud services. The programme is funded by Tekes.