The Impact Of Cloud Computing On The Business Model Of ERP Vendors

Cloud computing is a new model,is to allow users to easily access the computing resources to pay for the use of services.Cloud services,such as Elastic Compute Cloud and Google Apps,are gaining a huge user base very quickly.ERP software migration to the cloud is still in its infancy,for ERP software vendors,the migration to the cloud solution means that their value creation logic will face a profound change.They need not only to provide a completely web-based solution,as well as service fees to replace the previous license model,they also need to build their own data center to carry and operation and maintenance of customer management key business applications.Based on the above analysis,it motivates our research,that is,how the cloud computing on the enterprise software vendor's business model impact.Through a number of case studies of traditional ERP software vendors and pure cloud service providers,we have found that migrating from on-premise software to cloud services affects all the business models of traditional ERP software vendors,that is,customers value proposition,resource base,value allocation and capital flow.As a result,cloud computing has a disruptive impact on enterprise software.The transformation of the business model will involve transferring the ownership of the software from the customer to the external supplier or vendor;reassigning the responsibility for technical infrastructure and management,such as hardware and professional services,from the client to the supplier;And economies of scale to reduce the cost of providing software services;reduce the minimum cost of software sales,for small businesses to do long tail market and so on.By deducing two alternative business model configurations,that is,SaaS and SaaS+PaaS analysis,our research provides guidance on how enterprise software vendors make strategic choices based on their own situation and design their own business models policy.