cloud computing, business-linked models measure the contribution that cloud computing makes to the KPIs that affect your business model. One of the challenges is linking the business outcome to the contribution made by cloud computing. Figure 11 shows a possible mapping between the objectives for using cloud computing, as per its value models described in figures 12 to18, and the related business outcomes as expressed by business KPIs.Gain-Share Price Model The gain-share model has its roots in employees’ remuneration schemes. The idea is that as the organization gains, it shares some of those gains with its employees. A typical gain-sharing organization measures its own performance and shares the profits with all its employees using a predetermined formula.The organization’s actual performance is compared to its historical average (known as its standard or baseline performance) to determine the amount of the gain. In a cloud computing context, instead of having penalties should certain SLAs not be met, you reward the service provider by sharing your profits if the SLAs are exceeded.
It is a different approach psychologically. However, you can combine the gain-share model with a penalty-based performance model to create a hybrid performance model.Freemium Price Model There are two types of freemium. One is where you try before you buy a more enhanced service, and the other type is where you get a free service but the advertisements provided to you make up for the service’s price. This model is especially suited to SaaS because many software companies such as LinkedIn and Dropbox use it well. They offer a free version of their product that has limited functionality but provide you the option to pay for a premium service with extra features. The idea is to offer enough value to users in the free version in order to attract and retain them, and more value in the enhanced version to ensure that the users convert and maximize the service provider’s revenue.