Flexible Consumption Model

In a previous essay, we’ve scratched the proverbial surface of the emerging Service-oriented IT world, and broadly outlined the attributes and benefits that are expected from a Service. If I managed to lull you to sleep (or you retreated to bed, bleary-eyed) expecting that we’ll wake up in a shiny new world where everything is a flip-a-switch Service – well, we may have to revisit some of this proverbial surface, and maybe peel another layer or two …

So, grab your morning coffee, and let’s take another step back to look at the bigger picture, which – admittedly – is really not that much different than what engineers do when they “introduce another level of indirection”. This time around, however, we’ll start where the rubber meets the road, i.e. with the customer and his/her needs and desires, and work backwards from there:

“We can solve any problem by introducing an extra level of indirection.” – David Wheeler

Paraphrased from my previous essay (link here), the Service customer wants:

  • Something that provides useful value for him/her
  • Without needing to understand how it works
  • That s/he can start consuming with close-to-zero up-front investment ($)
  • Can be consumed only as needed and cancelled at-will
  • With a solid advance understanding of what it may cost

If you immediately thought “oh yeah, my electric utility works like that” or “oh yeah, that’s the VMs I get from AWS” you would, of course, be completely right. Yet, if you think outside the IT box for a moment – isn’t this list describing what you get from Uber? And beyond that … if you stay outside the box, and squint just a little bit … isn’t this list also applicable to your leased car? Granted, there are some buts and ifs (e.g. agility, max mileage, early lease termination fees etc), but, by and large, isn’t that approximately the experience you get when you lease a car?

And here the curtain opens to fanfare, and we step into the crowded theater to deafening applause … we have broken through the limiting “service=utility” assumption, and realized that we should not equate the terms “Service” and “Utility”. “Service” refers to non-tangible products, and the “Utility” is a term referring to a particular value delivery model.

The variety of delivery models expands by the day. On one extreme end of the delivery model spectrum is the well-known “you buy my (tangible) product and I ship you a box” model. On the opposite end of the spectrum is the “you subscribe to my service (intangible product) and I deliver it as a utility” model. In-between, there is a range of variations on the theme, including – as the car leasing model exemplifies – creative (squinting a bit) ways to package the value of tangible products as a “Service”, and maybe even arrange a delivery (and licensing) model that approximates the experience of a “Utility”. Voila – welcome to the world of Flexible Consumption Models!

In a statement that will horrify product developers, the delivery model can be more important than the product itself. If all this sounds a bit like sales, finance, and marketing-hype, that’s because it is. The value of the product or service is the same; the difference is in how you describe, purchase, and pay for it. Why are we bothering with all of this? We are observing customers who traditionally bought tangible IT product experimenting with non-tangible IT Services, delivered as a utility. For companies like EMC, which have built very successful businesses on the traditional and proven “you buy my (tangible) product and I ship you a box” model, it is VITAL to understand that challenge, and the diversity of opportunities to deliver its value proposition to customers under the “Flexible Consumption Model” umbrella. In other words, sometimes product developers need to shift their focus from adding more features to making it easier to consume the features we have.

After all, in a parallel but analogous universe, we see that Uber is wildly successful, yet people still buy lots of cars; and – beyond Uber and car ownership – we know that there are still lots of people who prefer to lease, rent, hire a limo, borrow, rideshare, use zipcar, and – gasp – even ride their bikes to work J. As one might have expected, the real world is refusing the be reduced to a simplistic binary “To Service or Not To Service” choice.

Zoran Cakeljic

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