Asset companies are the production operations of IT. Their core competence is found in the operation of their own IT infrastructure, optimized for costs, or in the production of high-quality software products. Scaling, cost controls, and complexity management are the success factors for the asset companies. Since their fixed assets prohibit a radical change in business activities, their competitiveness is determined by the agility with which they can integrate changed customer requirements into the ­earnings model.

Service companies offer services related to the preproducts of the asset companies. Operational and integration services, along with the “finishing” of components, are at the core of the business model. The success of a service company is measured by its innovative strength, the ideal timing of its services, and flexible reliance on the appropriate suppliers. Since service companies operate without being restrained by long-term investments, their competitive position is determined by short lead-in times up to the launch of their services (“time to market”).

Sales companies represent the distribution channels for the services from the service companies. Account management and the industry or wide-area distribution of cloud computing services generate value. The strategic planning of the sales locations and the addressing of customers, the sustained care of customer relationships and loyalty, the increase in value of brands, and low-cost procurement determines the earnings of the sales companies.

Although the above categorization appears to draw distinct lines, providers will continue to cover several or even all of these layers in their business model. Especially large companies which are already active on the market with cloud computing services will continue their vertically integrated value generation externally. Internally, however, a horizontalization will be observed during which product development, services, and sales will be located in decoupled business units.

Differentiation will be the breakthrough

The theses of separation and debundling of the cloud computing market may appear logical. But can they satisfy the demand stated at the beginning that cloud computing services, if they are to be successful on a broad scale, must offer additional value going beyond just “fast and cheap”?

Let us take a look at cloud computing at the end of the development described above. Two markets have appeared, and three debundled business models exist on each of them. Figure 2 gives these six segments a name defined by market dynamics and the performance depth of the business model. It is the concentra­tion on core competencies which forces providers to design their services and products to be competitive as appropriate for the degree of freedom in each of the segments.