The Public Cloud is a segment of the IT industry that we keep under close surveillance. Within our three research themes – Elastic Enterprise, Connected Worker and Partner Ecosystems – the Public Cloud is a major area of focus because it accelerates enterprise elasticity and worker connectivity and disrupts traditional partner ecosystems. When we look at the potential growth trajectory of SaaS, PaaS, and IaaS suppliers, one of the tools we use is our XaaS Portfolio model. This model describes the portfolio growth paths available to XaaS vendors. Through building out these paths, XaaS vendors can increase their presence and play more effectively across user segments and cloud ecosystems. We distinguish three growth trajectories in our model:
- Core expansion: relating to growth within product domains and features
- Horizontal and vertical expansion: relating to growth through packaging and segmentation
- Ecosystem expansion: relating to growth through the partner ecosystem
These three growth trajectories should mesh and synchronise for maximum effect. See the slide below for a graphical representation of this model.
The core expansion growth trajectory is product specific and relates to growth opportunities that are core to the XaaS vendor product portfolio. The four main product portfolio segments we identify within core are domain, features & functions, API, and mobility. Here is how we define these:
- Domain. SaaS domains include CRM, HRM, ERP, Office Productivity, UCaaS and so on. PaaS domains include specific or generic application development platforms. IaaS domains include store, compute, archive, synchronise and back-up to name a few. XaaS vendors can grow their product portfolio through expanding into adjacent domains. For instance, a CRM SaaS vendor can expand into HRM, or an accounting SaaS vendor can expand into ERP.
- Features and functions. These include domain specific features and functions, but also others such as language, currency and local rules and regulation capabilities. Through adding localisation features, XaaS vendors can expand the geographic capabilities of their product.
- API. These include interfaces to other software solutions and business partners. Through adding APIs into software domains that are frequently used by the XaaS vendor’s customers, XaaS vendors can expand the interoperability of their core product and increase product usage and usability within their customer base or connect to other XaaS vendor’s customer base.
- Mobility. These include apps for iOS, Android, Windows 8, RIM etc, or HTML5. Through offering support for the major mobile ecosystems, XaaS vendors expand their device footprint and are able to reach more potential customers.
Horizontal and vertical expansion
The horizontal and vertical expansion growth trajectory is largely packaging specific and relates to growth opportunities through packaging and segmenting core products. The packaging and segmentation can be branch specific, size specific, geography specific or relate to cross business functionality
- Branch specific. Through fine-tuning the core XaaS product for specific branches such as for instance finance, education, healthcare, government, or manufacturing, new vertical customer groups can be addressed and reached.
- Size specific. Through offering XaaS editions for specific customer size classes such as contractors, SMB, large businesses or multinationals, new horizontal customer groups can be addressed and reached.
- Role specific. Through offering XaaS products for specific roles, such as sales managers, accountants, HR managers, or software developers, new worker roles can be addressed and reached. Often, venturing into new roles also means expanding the core domain capabilities.
- Cross business functionality. The usability of a XaaS solution can be enhanced through adding cross business functionality such as office productivity, IaaS, UCaaS, or social communications capabilities. These can be treated as another domain extension in the core, an API extension in the core, or a packaging agreement with another XaaS vendor that is strong in one of these areas.
The ecosystem expansion growth trajectory is partner specific and relates to growth opportunities through partners and channels. These growth opportunities include also horizontal and vertical expansion. Often, rather than offering branch specific editions themselves, XaaS vendors rely on partners to do this. The ecosystem consists of Appstores, PaaS and partner programs (have a look at our explanatory partner ecosystem blog).
- Appstore. XaaS vendors can create their own appstore thus creating opportunity for other XaaS vendors and presenting a more complete offering to its own customers. Also they should make sure their own core solution is on the shelf in other app stores. App stores can be device, software, social media, or browser specific.
- PaaS. Providing a development platform for third parties to write extensions and add-ons to the core XaaS domain will expand your potential use cases. The PaaS platform should be linked to your Appstore.
- Partner programs. Partners are used to complement strategic business directions such as increasing market penetration, expanding geographies, acquire new skills and so forth. A well balanced alliance and channel partner ecosystem will effectively expand your market presence.
Have a look at how we use the XaaS Portfolio Tool to gauge how Dutch software vendor Exact is expanding its SaaS offering. If you would like to brief us on your XaaS portfolio expansion, feel free to contact us!
We use the NIST definition for cloud which can be downloaded here. Public cloud is only one of the many types of cloud, check out how the METISfiles positions public cloud against seven other computing styles.