Evolution of Online Business Models
Are “as-a-service” digital business models here to stay? Customer values are projected to shift in the post-COVID era, and a direct-to-consumer world may require an online presence for both products and experiences.
It’s hard to think ahead when we are up to our necks in the misery and fear of a pandemic, but every CEO should be focused not just on how to survive, but how to thrive in the COVID-era. I say era because this is not a passing phase, but a new reality.
COVID is accelerating many societal and technology shifts and reversing others. The COVID-era is a technology-driven era with widespread and often forced adoption of trends like work-from-home, online retail, pickup/delivery services, entertainment-as-a-service, telemedicine (well, tele-you-name-it), and machine-learning. Embodied in this change are deep behavioral shifts that, even given a decade, might never have reached these proportions. Enabling nearly all of these shifts is an “… as-a-service (XaaS)” capability be it data, infrastructure, platform, software, or experience. XaaS was already on it’s way to becoming a juggernaut, with a market value of $93.8 billion in 2018 and projected to triple to $344.3 billion by 2024, but it’s now on a whole new COVID-triggered upswing.
These XaaS enabled remote service paradigms are here to stay, maybe not at today’s artificially enforced levels, but to a significant degree all the same. Everyone now knows the perils of work-from-home, but they know the benefits too. As the COVID-era continues to require social distancing for some time, we can’t all go back to the cramped office. And why should we? I hate to see the airline industry in turmoil, but I can’t say that I’ve missed air travel. Now everyone knows just how easy it is to get your groceries or your food delivered, and contactless at that. I miss the big screen, but I’ll settle for great content, 65” TV, and homemade popcorn if I can share the experience with all my friends wherever they are.
But the current change is not just a digital transformation to cloud and consumerized applications, it’s also a behavioral transformation. Forward thinking businesses are seizing this unprecedented opportunity to pause the growth/execution treadmill and imagine a new value/ideation opportunity. Whole teams have been liberated from soul-destroying wash-rinse-repeat cycles and are free to think through new ideas. For better or worse, companies are also leaner and more agile, having been forced to transform their business in order to thrive.
Adapt both your product and your experience
So, what do CEOs need to re-imagine in their business going forward as we enter a new XaaS powered world? First and foremost the COVID-era is a direct-to-consumer world where you may be literally bringing your offering right into the consumer’s home. For B2B, that means an acceleration of the consumerization of the enterprise and often means a self-serve experience with a consultative sales model. Your offering needs to be consumable over the internet. Not only do your products need to be available as-a-service, but so does your experience. Some call it experience-as-a-service. Paid or free, it’s about helping customers understand how to leverage your offering to meet their own transition. Self-serve models are the most scalable but rely heavily on great product experiences.
