Business Models in the Internet of Services

Nikolay Mehandjiev, University of Manchester

Benjamin Gil, Atos Origin

What is a Service

Services Today

Types of services• “Conventional” services• Software services

What about the Amazon book delivery service?

Buying a Book on Internet

Order Reserve Pay Package Deliver

Virgin/ T-MobileAmazon

VISA, MasterCardBarclays

Royal MailDHLC

ompa

nies

In

volv

edManual Automated

Manual with service front-end

ManualAutomated

The interplay is the focus of some interest within the Centre for Service Research

• Using IT to Design Innovative Services

• Designing Better Software using ideas from Org. Services

About Web Services

What is a Web Service?

• It is a functionality that can be discovered on the web.

• Executes a specific business task

• Can be combined with other services to create a composite application, more complex & complete

• Allow intercommunication between systems from any platform and used as integration tool in organizations and between business partners

Web Services

Connecting Applications

I. The Internet of Services

Core ideas- WWW: Scale and complexity into (Web) Service Systems- Web 2.0: user-performed discovery, composition and adaptation

Currently “on the front pages” (on the “hype” stage of uptake) For example, Yahoo! Pipes provides tools for users to compose their

own information filtering service:

The Future Internet

Internet of Services, Service Web

What kind of WS do we have today?

8

Number of web services found during the past 25 monthsSource: http://seekda.com/about/web_services

• Number of services coming from the SEEKDA service crawler (services defined by a WSDL file: technical interface specification)

Web Service “Providers”

Open Services ConstellationIT Industry Service Parks

SOA Users

Several industry sectors such as the financial sector

(banking and insurance), telecommunications,

retailers, education, transportation, energy-oil and

gas, media, professional services or wholesalers are moving towards

SOA

SOA After SOA4ALL

SOA4All is a platform that enables Everyone to :

• Find

• Analyse

• Combine

• Create

Business Services

In an EASY Way

Innovative Business Models

SOA benefits

• Supports– New business processes– Changing business models– Reusing Business processes

and applications

• Improve – Utility of existing applications– Business agility– Standarization

• Reduce – Costs– Time to solution

Find out where SOA benefit your business the most

Source; SOA Value Assessment Brochure, Forrester, 2007

SOA benefits

• A business model is the method (a collections of activities) of doing business and generates revenue. The business model spells-out how a company makes money by specifying where it is positioned in the value chain.

• Technology must support Business Models.

• The actual is a changing market so technology must be fast and adaptable.

• Web Services can support the Business Models used as a sequence or combination of atomic functionalities.

• Conclusion: Using Web Services it is easy to adapt to new Business Models competitive advantage

1-Sided Business Model (Traditional Telco)

TelcoSuppliers Customers€ €

2-Sided Business Model

Newspapers

Advertisers

Readers€

Suppliers€

€

Service Wrap

2-Sided/Multisided Business Model

TelcoService

ProvidersService

Consumers

€ €

Advertising

€• REVENUE SHARE• PAY FOR PUBLICATION

• PAYG• SUBSCRIPTION• PREMIUM

Gov

ern

men

t

Ret

aile

rs

Dev

elop

ers

Con

tent

Te

lco

(R

eta

il)

Sec

urity

Bill

ing

Com

mun

ity

Too

ls

…

From Telco to SoftTelco

• Significant shift in business model– N-sided business models– Multiple revenue profiles (PAYG, subscription, …)– Disruption to current pricing structures– Price sensitivity determines the price balance

between the market sides– Goal is to maximise revenue overall– Example: newspapers typically have lower cover

prices to maximise readership, which maximises advertising revenues

19

SoftTelco – The Long Tail

New growth opportunities

Ribbit focus is on large number of niche

applications in ‘the tail’

Traditional focus on mainstream products

& markets

Long Tail [SoftTelco]

Short Tail [Traditional]

Dem

and

Number of Products

Internet-based business models

Internet creates new ways to promote, distribute and support products and services

Internet creates new ways to promote, distribute and support products and services

Internet has changed the commerceInternet has changed the commerce

Internet opens opportunities to develop new and different business models

Internet opens opportunities to develop new and different business models

WS Business Models

1) The problem with many proposed Internet services is that you are left with nothing when the service stops/disappear.

2) When users buy a service, especially one that holds their data, they are more worried about the seller's long-term survival.

3) Services are easier for big and established companies to implement, and harder for smaller, new entrepreneurial ones.

4) It is difficult to change mind, leave traditional IT systems and adapt them to news trends when “we have something that works”.

WS Business Models

1) The problem with many proposed Internet services is that you are left with nothing when the service stops / disappear.

2) When users buy a service, especially one that holds their data, they are more worried about the seller's long-term survival.

Will search Web Services in IT Industry Service Parks.

Will search Web services in the cloud, where users like you are publishing their services, you can

Making it yours

WS Business Models

3) Services are easier for big and established companies to implement, and harder for smaller, new entrepreneurial ones.

• Will allow anybody to search a needed service, to check it and to use it. Also we will create new ones by combining

exiting ones and having a custom functionality easily

WS Business Models

4) It is difficult to change mind, leave traditional IT systems and adapt them to news trends when “we have something that works”.

To organize a Company’s IT infrastructure and guiding it towards SOA can be a complex process  Web Services

can be used in a scalable way, first we can improve our current systems using Web Services to give solutions to new business processes needs and gradually “evangelize” people to use them.

SOA4ALL Business Models

•Community Model Open content

•Advertising Model Query Based Paid PlacementContext Targeted Advertising

•Merchant Model Virtual Merchant

•Subscription Model Content Services

Thank You!

www.soa4all.euwww.soa4all.eu