Louis V. Gerstner Jr. had an idea, the idea of On Demand business. He wanted business software solutions to be available like water and electircity. When someone requires water all one has to do is open a tap. Similarly if someone requires electricity all on has to do is turn on the switch. Closing the tap or turning off the switch stops the water and the electricity supply respectively. The other point to note is that in either cases we dont own the water or the electricity , we are just the consumers, and just pay for the usage of the resources.
On Demand business is premised around a similar structure. The underlying principle of On Demand business is that clients might not want to own some software solutions but require them on need basis. Hence a software company might be the supplier of the software resources for end consuming by the consumer, in this case the client. All the client needs to do is turn on the switch to consume the software resources and pay for the usage and then turn off the switch whne it doesnt require to use the software resources, hence the resource is available "On Demand". But the question to ask is; Is there even a demand for On Demand services in the software industry? The answer is Yes and the opprtunities associated with this model are abundant.
Oppertunities for Software Company
1. Partnering: The "OnDemand" model is a brilliant platform for a software company to partner in a long lasting realtionship with a client. Since the client is now dependent on the software company for some of its business process being solved by the software service, the software company can look at oppertunities of providing other services to the client on demand. On Demand model requires an intergrated mode of business bewteen the software company and the client. This results in the software company getting involved with the client on a day to day basis and hence slowly builds the rapport to slowly expand its services portfolio it provides to the client. Hence the business growth oppertunity that the software company gets for a given client is plenty.
2. Knowledge : In partnering with the client the software company gets an oppertunity to understand the clients buisness and the clients industry better. This knowledge can be further used for ehnacement of software solutions/products.
Oppertunities for Clients
1. No Ownership: In implementing solution in house the client has to invest in infrastructure and services invloved with implementation. Small clients might not be capable of investing heavily at one go on their software needs. Hence instead of on time heavy investment the clients can opt for investing only on services without any investment on infrastructure.
2. Service Termination: Terminate service as and when needed: Since the client does not own the solution the client may terminate the service as and when required.
3. Solution trial : Clients may opt for a solution in "On Demand" as a solution trial before investing to own the solution.
On Demand business is premised around a similar structure. The underlying principle of On Demand business is that clients might not want to own some software solutions but require them on need basis. Hence a software company might be the supplier of the software resources for end consuming by the consumer, in this case the client. All the client needs to do is turn on the switch to consume the software resources and pay for the usage and then turn off the switch whne it doesnt require to use the software resources, hence the resource is available "On Demand". But the question to ask is; Is there even a demand for On Demand services in the software industry? The answer is Yes and the opprtunities associated with this model are abundant.
Oppertunities for Software Company
1. Partnering: The "OnDemand" model is a brilliant platform for a software company to partner in a long lasting realtionship with a client. Since the client is now dependent on the software company for some of its business process being solved by the software service, the software company can look at oppertunities of providing other services to the client on demand. On Demand model requires an intergrated mode of business bewteen the software company and the client. This results in the software company getting involved with the client on a day to day basis and hence slowly builds the rapport to slowly expand its services portfolio it provides to the client. Hence the business growth oppertunity that the software company gets for a given client is plenty.
2. Knowledge : In partnering with the client the software company gets an oppertunity to understand the clients buisness and the clients industry better. This knowledge can be further used for ehnacement of software solutions/products.
Oppertunities for Clients
1. No Ownership: In implementing solution in house the client has to invest in infrastructure and services invloved with implementation. Small clients might not be capable of investing heavily at one go on their software needs. Hence instead of on time heavy investment the clients can opt for investing only on services without any investment on infrastructure.
2. Service Termination: Terminate service as and when needed: Since the client does not own the solution the client may terminate the service as and when required.
3. Solution trial : Clients may opt for a solution in "On Demand" as a solution trial before investing to own the solution.
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