Why Software Application Companies Should Have a Cloud Offering
October 23, 2019
In the last article from Fortitude Technology, we discussed the value the Cloud brings to legacy applications running on older hardware and operating systems. It touched on the benefits for both the software application company and the end-user, but here we’ll go into more detail and focus on why software application companies should embrace the Cloud.
For software application companies looking to meet the needs of customers looking for a Cloud option, there are numerous benefits. These benefits include infrastructure, business continuity, operational efficiencies, consistent deployment models, and resource availability. But the path to these benefits comes with the need for business re-alignment. I will discuss how this business and technical journey will benefit the software application company and position the company for the future.
The Cloud infrastructure brings consistency in performance and availability for the application. It also delivers a level of redundancy and resilience that is rarely seen in on-premise implementations. Utilizing the Cloud can also provide a sandbox for development with agility and scalability to meet any demand. From an implementation perspective, the Cloud provides an easily deployable infrastructure with strong security and controls. In fact, your Cloud implementation offering will add to the software application company’s value proposition. This leads us to the operational re-alignment decisions which will need to be made for the business in order to facilitate the Cloud strategy.
Implementation / deployment, support services, pricing models, sales & marketing materials will all need to be examined. Deployment processes will need to be re-engineered and additional SOPs will need to be defined for Cloud customers. Support services will now include your Cloud partner and you will need to define the communication cadence. Your pricing model may morph to an operational model which will need to include your maintenance charges. Sales and marketing material will now need to include your newly embraced Cloud strategy and your customers will need to understand the value propositions. With these new operational procedures, you may also have some potential for additional revenue streams.
Potential recurring revenue streams exist in a couple of areas. First, if the software application company ‘white labels’ the Cloud hosting services, they can purchase the services wholesale and re-sell it to their customers. Secondly, they can add additional services such as Backup as a Service or Disaster Recovery as a Service, which will compliment and protect their application availability for their customers. The companies may also have additional licensing opportunities if they charge for development or disaster recovery copies. Not all software application companies choose to take advantage of these revenue opportunities, but they do present themselves with a Cloud transition.
In conclusion, moving to the Cloud makes sense for software application companies as they position for the future. It provides both business and technical advantages that will impact the company in a positive way. Work with the right Cloud Partner that can help guide you through the transition, so you can focus on your software application for your most valuable asset; your customers!
