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The Consumption Cloud Economy by @IanKhanLive | @CloudExpo #IoT #Cloud

When vendors and suppliers are paid only for what is actually consumed is the fundamental concept behind the Consumption Cloud

Three Things the Consumption Cloud Economy Needs to Succeed

Tech Giant Amazon recently announced that it will pay writers only for the pages that are actually read rather that for the purchase of an entire book. This is probably the biggest change that the world of publishing has ever seen, right after the invention of the printing press maybe, that fundamentally changes how books are consumed. This exactly is the Consumption Cloud Economy!

The concept of offering services and solutions in a way where they are consumed to the best of capabilities, where end users pay only for what they use and where vendors and suppliers are paid only for what is actually consumed is the fundamental concept behind the Consumption Cloud. In other words you are now part of a system where as a consumer you can think about Paying ONLY for what you use. That's fantastic. This helps end users save more than just a few bucks. Expanded to a multitude of services that can be offered in this form, you are now considering IT, Solutions, Services and what not. I spoke about this concept at the recent Cloud Expo in New York where I gave examples of car tires and shoes.
The consumption economy has some key aspects to it that need to be locked down before you end up rolling out your solutions and services on the model.

The Consumption Model Needs the Cloud
Any kind of a business model that needs to connect with mechanisms that help measure and calculate consumption needs the Cloud. Without the Cloud, you are left limping to search for connectivity or the need to dock and sync. In that case this would be attune to a healthcare gadget from the early days that you need to sync with the mothership at the end of the day. That's old school and being rapidly replaced with things that are connected to the cloud all the time.

True Consumption Model Needs Connectivity
With Cloud and always connected devices, it is easy to monitor and meter usage and, at the same time, convert the usage into some kind of a bill that is presented to the end user. Whether the bill is presented at the end of the day, the week or month it is immaterial and is a small aspect of the overall process. Connectivity to the Cloud is a key aspect of the system to work in the best possible way as it helps maintain a real-time picture, exchange measurements and response and essentially help make a real time system work.

True Consumption Needs New Technology
Going back to the thing that started this entire blog post, if Amazon did not have a publishing platform that was available on Kindle, would they have ever thought of changing how they pay their publishers? Maybe not. In a similar way unless we do not have technologies that can be enabled for consumption based selling, it may be hard to come up with ideas to monetize them in the first place. In another example, it is a must to develop IoT devices that we can use for various purposes through Cloud connectivity and so on. Without the device itself, it is impossible to enable the solution.

What's Next
Technologies are rapidly developing and with that is a fast developing need of being able to provide a complete service rather than a bit of this and that. For Cloud-based solutions to emerge as winners, we need to look at the entire ecosystem rather than just the small world in which our solution operates.

Coupled with best practices that your organization may have managed to build and lessons learned from the mistakes and experiences of others, it is not very hard to develop solutions, platforms and ecosystems that work on a consumption basis. The only challenge is to be able to think ahead of times, build something that works now and can be rapidly scaled tomorrow.

More Stories By Ian Khan

Ian Khan leads Innovation & Marketing initiatives at Solgenia, a global Cloud services provider with more than 3500 enterprise customers globally that includes Top Fortune 100 and Fortune 500 companies. An advocate of Cloud computing and a thought leader driving change within the industry, Ian is a catalyst for collaboration and Cloud solutions.

He has written for multiple industry publications, presented at various industry events worldwide, and brings more than 15 years of in depth technology experience across various industries.

Ian is a PMP Certified Project Manager, MCSE, and an Instrumentation Technology engineer.

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