Welcome!

@CloudExpo Authors: Matt Brickey, Elizabeth White, Christoph Schell, Yeshim Deniz, Liz McMillan

Related Topics: @CloudExpo, Java IoT, Microservices Expo

@CloudExpo: Blog Feed Post

Increasingly, Pay-Per-Use Is Paying Off By @AriaSystemsInc | @CloudExpo [#Cloud]

When most people think of usage-based billing, the example that probably comes to mind first is metered public utilities

You hear the terms “subscription economy” and “subscription commerce” all the time. And with good reason. Subscription-based monetization is transforming business as we know it. But what about usage? Where’s the “consumption economy”? Turns out, it’s all around us.

When most people think of usage-based billing, the example that probably comes to mind first is metered public utilities — water, gas and electric. Phone services, especially mobile, might come next. Then maybe taxis. And that’s about as far as most of us get before we scratch our heads. What else is there? Plenty. In this post, we take a look at several market niches where pay-per-use options are already the norm and why they work.

pay_as_you_go_1

Vacation rentals. Last year, a couple I know traveled around the world — all the way around. It took eleven months. They visited every continent but Antarctica. A big reason they could afford the trip? Airbnb. With this disruptive room booking service and a laptop, they were able to stay in comfortable private homes almost everywhere they went — and for a fraction of the cost of hotels.

There’s nothing new about the monetization strategy behind vacation rental services like Airbnb. It simply takes advantage of unused capacity (spare rooms, in this case) and offers it for purchase on a usage basis. And the idea is catching on. Zipcube (office space) and Airtask (task outsourcing) are just two examples of the many companies that are profiting from the monetization opportunities in a new high-growth arena called “collaborative consumption.”

Auto Insurance. Traditional car insurance premiums are an example of a subscription-based service. You pay an annual or semi-annual fee and you’re covered no matter how much or how little you drive. In the past couple of years, Allstate, State Farm, the Hartford, Progressive and others have begun offering an alternative to standard premiums. They’ve introduced consumption-based pricing as a means to build customer loyalty in a notoriously competitive industry. With these new pay-as-you-drive policies, also known as “usage-based insurance,” customers are billed only for the time they actually spend behind the wheel. For many, usage-based insurance can lower premiums by up to 50%.

Personal transportation. Zipcar is an innovative example of applying a subscription plus usage monetization model to carve out revenues in an underserved market niche – urban transportation. Prior to Zipcar, if you lived in a large city and didn’t own a car, the only way you could get around was on public transportation. If you wanted the privacy and convenience of a car, but for just a few hours, your only option was to rent one for a whole day. You also had to get yourself to a rental location and then fill out forms once you got there before you got a key. For a low monthly fee and low cost per hour, Zipcar drivers can be on their way in just minutes. The cars are located within walking distance and the keys are waiting inside. Drivers pay only for how long they drive. Ownerless car services like Zipcar are springing up across the globe.

Healthcare. Medical equipment is notoriously costly. That may be one reason why pay-per-use arrangements have been a fixture in healthcare for years. It’s the only way many hospitals and clinics can afford the equipment they need. In fact, nearly two-thirds of all medical devices are financed, mainly through leasing, according to data compiled by the Equipment Leasing & Financing Association (ELFA). For eight out of the past nine years, healthcare has occupied the top rung on ELFA’s annual list of “What’s Hot” in equipment leasing. Medical equipment makers like Medtronic and GE Healthcare continue to extend their use of consumption-based monetization, especially in areas of advanced diagnostics systems.

As a side note, other industries at the top of ELFA’s hot list include construction, trucking, rail and oil and gas — all of which require very expensive equipment. These industries rely heavily on usage-based payment mechanisms to help their customers lower capital and operating expenses and minimize total cost of ownership.

Online and cloud services. GE Healthcare provides cloud-based storage solutions for medical imaging on a usage basis. It’s just one of hundreds of services that are taking advantage of the convenience and affordability that utility-based pricing delivers. Utility pricing is employed in everything from NearlyFreeSpeech.NET, which pioneered “pay for only what you use” web hosting services, to Microsoft Azure to Amazon Web Services to data storage company Box. Consumption billing is ideal in these instances because what people are buying, whether it’s virtual space on a cloud server, CPU cycles or data bandwidth are fluctuating commodities they require — and consume — on demand.

Usage-based monetization, already well ensconced, is headed for enormous expansion in the coming years. Its adoption is accelerating in such fast-growing areas as the Internet of Things (IoT), collaborative consumption and the sharing economy. For companies seeking to maximize revenues, consumption-oriented pricing deserves thorough exploration.

Sean Kirk

The post Increasingly, Pay-Per-Use Is Paying Off appeared first on Recurring Revenue Blog | Aria Systems.

Read the original blog entry...

More Stories By Aria Blog

The Aria blog is the place for news, commentary and discussion on monetization, agile billing and IoT. We cover a variety of topics including forces of market disruption, the Monetization of IoT, billing best practices, trending news and what monetization will look like in the future. Our hope is that you’ll become better informed, be entertained and in turn share your thinking, ideas and comments.

@CloudExpo Stories
"Outscale was founded in 2010, is based in France, is a strategic partner to Dassault Systémes and has done quite a bit of work with divisions of Dassault," explained Jackie Funk, Digital Marketing exec at Outscale, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"DX encompasses the continuing technology revolution, and is addressing society's most important issues throughout the entire $78 trillion 21st-century global economy," said Roger Strukhoff, Conference Chair. "DX World Expo has organized these issues along 10 tracks with more than 150 of the world's top speakers coming to Istanbul to help change the world."
Kubernetes is an open source system for automating deployment, scaling, and management of containerized applications. Kubernetes was originally built by Google, leveraging years of experience with managing container workloads, and is now a Cloud Native Compute Foundation (CNCF) project. Kubernetes has been widely adopted by the community, supported on all major public and private cloud providers, and is gaining rapid adoption in enterprises. However, Kubernetes may seem intimidating and complex ...
"DivvyCloud as a company set out to help customers automate solutions to the most common cloud problems," noted Jeremy Snyder, VP of Business Development at DivvyCloud, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
While the focus and objectives of IoT initiatives are many and diverse, they all share a few common attributes, and one of those is the network. Commonly, that network includes the Internet, over which there isn't any real control for performance and availability. Or is there? The current state of the art for Big Data analytics, as applied to network telemetry, offers new opportunities for improving and assuring operational integrity. In his session at @ThingsExpo, Jim Frey, Vice President of S...
"We focus on SAP workloads because they are among the most powerful but somewhat challenging workloads out there to take into public cloud," explained Swen Conrad, CEO of Ocean9, Inc., in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"As we've gone out into the public cloud we've seen that over time we may have lost a few things - we've lost control, we've given up cost to a certain extent, and then security, flexibility," explained Steve Conner, VP of Sales at Cloudistics,in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We are focused on SAP running in the clouds, to make this super easy because we believe in the tremendous value of those powerful worlds - SAP and the cloud," explained Frank Stienhans, CTO of Ocean9, Inc., in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
DX World EXPO, LLC., a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
"Peak 10 is a hybrid infrastructure provider across the nation. We are in the thick of things when it comes to hybrid IT," explained , Chief Technology Officer at Peak 10, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"I think DevOps is now a rambunctious teenager – it’s starting to get a mind of its own, wanting to get its own things but it still needs some adult supervision," explained Thomas Hooker, VP of marketing at CollabNet, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We are still a relatively small software house and we are focusing on certain industries like FinTech, med tech, energy and utilities. We help our customers with their digital transformation," noted Piotr Stawinski, Founder and CEO of EARP Integration, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We've been engaging with a lot of customers including Panasonic, we've been involved with Cisco and now we're working with the U.S. government - the Department of Homeland Security," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We're here to tell the world about our cloud-scale infrastructure that we have at Juniper combined with the world-class security that we put into the cloud," explained Lisa Guess, VP of Systems Engineering at Juniper Networks, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"I will be talking about ChatOps and ChatOps as a way to solve some problems in the DevOps space," explained Himanshu Chhetri, CTO of Addteq, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Your homes and cars can be automated and self-serviced. Why can't your storage? From simply asking questions to analyze and troubleshoot your infrastructure, to provisioning storage with snapshots, recovery and replication, your wildest sci-fi dream has come true. In his session at @DevOpsSummit at 20th Cloud Expo, Dan Florea, Director of Product Management at Tintri, provided a ChatOps demo where you can talk to your storage and manage it from anywhere, through Slack and similar services with...
The financial services market is one of the most data-driven industries in the world, yet it’s bogged down by legacy CPU technologies that simply can’t keep up with the task of querying and visualizing billions of records. In his session at 20th Cloud Expo, Karthik Lalithraj, a Principal Solutions Architect at Kinetica, discussed how the advent of advanced in-database analytics on the GPU makes it possible to run sophisticated data science workloads on the same database that is housing the rich...
SYS-CON Events announced today that Massive Networks will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Massive Networks mission is simple. To help your business operate seamlessly with fast, reliable, and secure internet and network solutions. Improve your customer's experience with outstanding connections to your cloud.
"We are an IT services solution provider and we sell software to support those solutions. Our focus and key areas are around security, enterprise monitoring, and continuous delivery optimization," noted John Balsavage, President of A&I Solutions, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
Everything run by electricity will eventually be connected to the Internet. Get ahead of the Internet of Things revolution and join Akvelon expert and IoT industry leader, Sergey Grebnov, in his session at @ThingsExpo, for an educational dive into the world of managing your home, workplace and all the devices they contain with the power of machine-based AI and intelligent Bot services for a completely streamlined experience.