Research On The Profitability Model Of Glodon’s Transformation Into A SaaS Service Company

The "accelerating the construction of a digital economy and driving change through digital transformation" proposed in the "Two Sessions" of 2021 is being further implemented.Against the backdrop of the rapid development of the cloud computing industry in the post-epidemic era,digital transformation will inject new life into China’s traditional construction industry,which has a huge output value.At the same time,new advances in areas such as 5G base station construction,big data centers and industrial internet are also driving and accelerating the digital transformation of China’s engineering and construction industry.As a leading enterprise in China’s traditional construction software industry,Glodon has also transformed its business model from a traditional software manufacturer to a SaaS(Software as a Service)cloud computing service provider to keep up with the development of the times.As a pioneer in the transformation from a traditional software vendor to a cloud computing SaaS service provider,the impact of the change of business model in the transformation of Glodon on its profitability model is worthy of attention and discussion.This paper first explains the concepts and theoretical foundations of profit model and SaaS.And then,based on theories such as the Slywotzky’s Five Elements of Profit Model,takes the transformation of Glodon’s SaaS model as an research object and conducts a study in the following three aspects: Firstly,it elaborates on the strategic choice of Glodon’s SaaS transformation through SWOT analysis.Secondly,analyse the five elements of Glodon’s profitability model based on its SaaS transformation process and the changes in its business activities.Thirdly,the impact of the SaaS transformation on the operation of Glodon’s profit model is analyzed in relation to the composition of the five elements of the profit model,and the remaining problems of Glodon’s current profit model are identified and relevant recommendations are made.The research results show that the transformation of the cloud computing SaaS model has reconstructed the five elements of Glodon’s profitability model,and that after the transformation,Glodon’s business conditions have improved,and its profitability,profit quality and corporate value creation capabilities have been effectively enhanced.The new profit model based on SaaS products has enabled Glodon to increase its total revenue and profit year on year and has generated sufficient cash flow for the company.The SaaS transformation has maintained a high return on investment to Glodon’s shareholders and the trend of increasing earnings per share since the transformation has enhanced the company’s growth capability.However,Glodon also suffers from problems such as inadequate credit management mechanisms,inefficient use of capital and low concentration of downstream customers.Overall,the performance of Glodon’s profit model after the SaaS transformation is at the leading level of the information technology service industry.The purpose of this paper is to analyze the impact of Glodon’s SaaS transformation on its profitability model,in order to provide a valuable reference and reference for other traditional software companies in China to choose and build their profitability models when undergoing transformation.