Tivit Interactive - Creating Value Based Offerings for the Cloud

F-Secure

Creating Value based Offerings for the Cloud

• Bronan McCabe (MBA)

• VTT Technical research centre of Finland

Agenda

• VTT– Cloud Market Precedent

– Market Strategies

– Role of Value

Cloud Market PrecedentSupply and Demand

No of Users

Price

Traditional

Software

Provision

P-1

Q-1

Demand

SOURCE: Smith, Adam (1977) [1776].

P-2

Q-2

Cloud Software Provision

Gartner, 2010

Functionally less expensive with more agility

Yankee Group, 2010

Lowers TCO and improves efficiency

Delivery Mechanism - Google vs. Apple

Da

ta c

en

tre

Te

rmin

al

IAP

Application

Infrastructure SW

Equipment

Semiconductor

Application

Infrastructure SW

Equipment

Semiconductor

Network Access

Local-Metro

Internet Access

Backhaul NS

P

SOURCE: Messerschmitt & Szyperski, 2003; Tapscott, Ticoll, Lowry, 2000

Technology

De

live

ry M

ech

an

ism

Provider

End user

Aggregator

Alliance

Distributive

Value chain

SOURCE: Porter, 1980

Barriers to EntryScale economies

Access to capital

Cost advantages

Barriers to EntryProduct differentiation

Switching Costs

Channels to Market

Strategy Selection

SOURCE: Porter, 1980

Barriers to EntryScale economies

Access to capital

Cost advantages

What does Differentiation

Focus mean in the

Cloud?

Strategy Selection

OperationsMarketing

Business

Benefits Cost

Capabilities

Value

Creating Differentiation

Confusing Terminology ???

• Business– E.g. Value Networks – Transforming intangible value to

tangible value

• Operations– E.g. Lean – The removal of non-value adding waste

• Marketing– E.g. UX – Buyers of Experience value what the company

reveals over time

SOURCE: Allee, (2006); Womack et al, (1990); Pine & Gilmore (1998)

Value

Propositio

n

VTT Value Concept

OFFERING(Product/

Service/

Company)

User

Perceived

Value

Values

Input

Customer Values

Offering

ValueNetwork

Revenue Generating

Schemes

ValueProposition

CostStructure

OrganisationalAnalysis

StrategicAlignment

Output

Business Case

Analysis

Culture &Capabilities

Market Forecast

Stage 0:

DiscoveryStage 1:

ScopingStage 2:

Business Case

Business modelling

SOURCE: Cooper, (1990)

Value survey

SOURCE: Schwartz, (1992)

Values > Attitudes > Behaviour

• Gaining Understanding

– Customers & End users

– Behaviour

– Activities

– Products

– Services

– Company

• Correlation > Knowledge

• Criteria for decision making

• Segmenting the market

Differentiate from Competition!

Q&A

Bronan McCabe (MBA)

VTT – Oulu

bronan.mccabe@vtt.fi

VTT creates business

from technology