Article: Cloud economics: dynamic business models for business on demand Journal: International Journal of Business Information Systems (IJBIS) 2010 Vol.5 No.4 pp.373 - 392 Abstract: Cloud computing is currently the new buzzword in the Information and Communication Technology (ICT) industry. Early adopters in the market have already established quite stable and reliable offers of cloud-based services. From an economic perspective, each of these services is based on a certain business model. These models are in general used to describe the value-creating logic of organisations within a certain market, e.g., how a company or network of companies aims to make money and create consumer value with cloud offers. Thus, they should be the basis for every company|s business. In this work, dynamic business models are introduced. Static, conventional models do not reflect the real world and lack substantial elements of changing market environments, whereas dynamic models express a time-variant view of the market. A key factor for success for the whole cloud-service market will be to avoid confusion about different offers, differentiators and functionality, which may occur during the (ICT-)traditional hype cycle, and could definitely blur essence and usefulness of market offers. The introduced dynamic perspective will allow pointing out the most important limitations and challenges at each hype phase that clouds have to face before becoming real, broad mainstream for enterprises. Inderscience Publishers - linking academia, business and industry through research

Title: Cloud economics: dynamic business models for business on demand

Authors: Maik A. Lindner, Luis M. Vaquero, Luis Rodero-Merino, Juan Caceres

Addresses: SAP Research, SAP UK Ltd. Belfast, TEIC Building, University of Ulster, Shore Road, BT37 0QB Newtownabbey, UK. ' Telefonica Investigacion y Desarrollo (TID), C/Emilio Vargas 6 28043, Madrid, Spain. ' Telefonica Investigacion y Desarrollo (TID), C/Emilio Vargas 6 28043, Madrid, Spain. ' Telefonica Investigacion y Desarrollo (TID), C/Emilio Vargas 6 28043, Madrid, Spain

Abstract: Cloud computing is currently the new buzzword in the Information and Communication Technology (ICT) industry. Early adopters in the market have already established quite stable and reliable offers of cloud-based services. From an economic perspective, each of these services is based on a certain business model. These models are in general used to describe the value-creating logic of organisations within a certain market, e.g., how a company or network of companies aims to make money and create consumer value with cloud offers. Thus, they should be the basis for every company|s business. In this work, dynamic business models are introduced. Static, conventional models do not reflect the real world and lack substantial elements of changing market environments, whereas dynamic models express a time-variant view of the market. A key factor for success for the whole cloud-service market will be to avoid confusion about different offers, differentiators and functionality, which may occur during the (ICT-)traditional hype cycle, and could definitely blur essence and usefulness of market offers. The introduced dynamic perspective will allow pointing out the most important limitations and challenges at each hype phase that clouds have to face before becoming real, broad mainstream for enterprises.

Keywords: cloud economics; dynamic business models; cloud market; cloud computing; grid computing; market analysis; business on demand; business information systems.

DOI: 10.1504/IJBIS.2010.032938

International Journal of Business Information Systems, 2010 Vol.5 No.4, pp.373 - 392

Published online: 05 May 2010 *

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Title: Cloud economics: dynamic business models for business on demand

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