As-a-Service should be your next business model

Uber and Lyft have completely changed the way people look at cars. They created a Car-as-a-Service model and consumers responded. Instead of investing in car ownership, ride-sharing companies made it easy for people to access transportation at a reasonable price. And now consumers expect this kind of service for everything.

This consumer revolution is forcing companies to change their business models and pushing business-to-business companies to make similar offers. This means our tech clients must provide hardware, software, and experience-as-a-service. And the potential payoff is significant. In 2020, Software-as-a-Service will be worth $116 billion worldwide.

For businesses born in the cloud, the move to as-a-Service is natural; they already live in the cloud. But for older, established technology companies, the challenge is bigger. Moving to as-a-Service impacts every area of the business and requires a complete transformation.

Companies need to reinvent themselves for this new business model. Most larger technology companies are organized around selling multi-year licenses to customers who then come back at renewal time to sign another contract.

Charging customers on an as-a-Service model means every part of the business needs to change. They have to invest in people who understand this model to ensure a good customer experience, set-up monthly cadences, change how they recognize revenue, and reconfigure how they compensate sales people and manage their partner ecosystems.

It is a significant change-management initiative that requires the company to commit to a new business model and establish a solid plan for executing it.

Change is not easy. More than 50% of digital-transformation projects did not move forward in 2018. Transforming your business is not a simple journey. There needs to be a strategy and framework to ensure you have identified all the impacts on your business.

The world is moving to as-a-Service, which means it is time to shift business strategy to meet demand. We have experience moving clients to new operating models and successfully transforming the way they do business.

Signing multi-year software contracts is not the future. Rather, look to the cloud. Technology companies need to change their offerings to focus on as-a-Service or they will be overtaken by cloud competitors. https://www.youtube.com/embed/H1p0ZvaHpEQ?feature=oembed&enablejsapi=1&origin=https%3A%2F%2Fwww.capgemini.com

Jean-Claude Viollier is the Executive Vice President, North American High Tech Unit Lead, at Capgemini. He excels at helping clients think differently and take a more humanistic view of technology.
He can be reached at jean-claude.viollier@capgemini.com.

Jean-Claude Viollier

Expert in Cloud Services (global), Digital Operations

I help Capgemini clients to drive their Digital and Cloud Transformation projects across UK, North America and Asia-Pacific. I also help them to design/execute ambitious Digital Transformation Programs in sectors like Banking, Insurance, EUC, High Tech, Manufacturing and Consumer Products sectors. I am also advising my clients on their best innovative Partner Ecosystem. And finally, I help them deliver ambitious Innovative Programs around Social, Mobile, Analytics and Cloud.