One of the major tasks on my plate is understanding the impact of business systems to support the explosion of Software as a service business offerings, such as Exchange Hosted Services, Windows Live offerings and Microsoft Dynamics CRM Live. These business offerings all stem from the 'Subscription' business model built to support our overall Software + Services business strategy.
As I think about the S+S business strategy with my team, we, the Microsoft IT Enterprise Architecture Team, has realized that we must better understand the difference between customer expectations and how these customer expectations influence business models and IT systems. Through our work, we've learned that there is a quite interesting and simple relationship between the enterprise business applications and customer expectations. As we researched customer expectations, we discovered that a new customer profile exists, or is in the midst of existing. This new customer profile has forced the Subscription business model to exist and requires us to have a fresh look at our IT system landscape to support the business model. We have coined the term Customer 2.0 to describe these new customer expectations and this will be the topic of this blog.
My hope in this blog post is that the penny will drop and you will see that a significant change in customer needs has occurred and these changes force a deep and hard look at the supporting IT system infrastructure.
Okay, let's get started. Customer 2.0 marks a significant change in our understanding of the software market. Before describing Customer 2.0, let me first describe Customer 1.0 to help give context.
Customer 1.0 has expectations including:
Customer 1.0 is serviced by a more traditional Packaged Software business model which has characteristics including:
Through a change in environmental trends, Customer 2.0 has evolved. These trends have a huge impact on downstream business models and system infrastructure. Some of the environmental trends I'd like to highlight are:
The above environmental trends have forced Customer 1.0 to evolve to Customer 2.0 with characteristics such as:
These characteristics are incredibly different and force a change in the software business model to service them. Hence, Subscription Business Models has emerged and are a large part of the Subscription business model (near synonymous to the Software-as-a-service business model in my mind), which is key to the Software + Services business strategy.
The S+S Business strategy requires a Subscription business model with characteristics including:
This business model is substantial and forces a new, fresh look at the IT systems architecture needed to support it. I've bolded words in the business model which should strike you as important; reliable IT, integrated services, high volume, self-service, unified customer support, etc. These are key attributes of the resulting enterprise business system architecture which I will go into in subsequent blog posts.
The purpose of this post is to level-set on the problem domain which I will address in later posts from the business system architecture perspective.
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Saw two posts that got me thinking... http://scobleizer.com/2007/11/17/the-brand-promise-of-apple/ and
There's been talk, for years now, about concepts like Enterprise 2.0 and Web 2.0. We are all so enamored
I enjoyed this post from Gabriel a lot - he talks about the dynamics at play in the IT arena at
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As I continue my work on my little nook of Microsoft's S+S business strategy, the team I work with has
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Welcome to the July 1, 2008 edition of Carnival of Enterprise Architecture (Issue #10). Business Process Management Stephan Grindley presents Enterprise Asset Management Software - a Great Way to Manage posted at Asset Management Articles. Bozidar Spirovski
Good discussion. I agree that the environment has changed but I disagree that the customer is different: http://glasseyonsaas.typepad.com/glassey_on_saas/2008/07/customer-10-cus.html.
Thanks for sharing, really like your view. Waiting for some more great articles like this from you in the coming days.