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Business Models in the Internet of Services Nikolay Mehandjiev, University of Manchester Benjamin Gil, Business Models in the Internet of Services Nikolay Mehandjiev, University of Manchester Benjamin Gil, Atos Origin

What is a Service What is a Service

Services Today Types of services • “Conventional” services • Software services What about the Services Today Types of services • “Conventional” services • Software services What about the Amazon book delivery service? 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 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 Connecting Applications partners

I. The Internet of Services Core ideas - WWW: Scale and complexity into (Web) 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 The Future Internet

Internet of Services, Service Web Internet of Services, Service Web

What kind of WS do we have today? • Number of services coming from What kind of WS do we have today? • Number of services coming from the SEEKDA service crawler (services defined by a WSDL file: technical interface specification) Number of web services found during the past 25 months Source: http: //seekda. com/about/web_services 8

Web Service “Providers” IT Industry Service Parks Open Services Constellation Web Service “Providers” IT Industry Service Parks Open Services Constellation

SOA Users Several industry sectors such as the financial sector (banking and insurance), telecommunications, 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 SOA 4 ALL SOA 4 All is a platform that enables Everyone SOA After SOA 4 ALL SOA 4 All is a platform that enables Everyone to : • Find • Analyse • Combine Business Services • Create In an EASY Way

Innovative Business Models Innovative Business Models

SOA benefits • Supports – New business processes – Changing business models – Reusing 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 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) Suppliers € Telco € Customers 1 -Sided Business Model (Traditional Telco) Suppliers € Telco € Customers

2 -Sided Business Model Suppliers € Newspapers € Advertisers € Readers 2 -Sided Business Model Suppliers € Newspapers € Advertisers € Readers

2 -Sided/Multisided Business Model Service Providers • • € REVENUE SHARE PAY FOR PUBLICATION 2 -Sided/Multisided Business Model Service Providers • • € REVENUE SHARE PAY FOR PUBLICATION … Tools Community Security Billing Telco (Retail) Content Government Retailers Developers Service Wrap Telco € Advertising € Service Consumers • • • PAYG SUBSCRIPTION PREMIUM

From Telco to Soft. Telco • Significant shift in business model – – N-sided From Telco to Soft. Telco • 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

 Soft. Telco – The Long Tail Short Tail [Traditional] Demand Long Tail [Soft. Soft. Telco – The Long Tail Short Tail [Traditional] Demand Long Tail [Soft. Telco] Ribbit focus is on large number of niche applications in ‘the tail’ Traditional focus on mainstream products & markets New growth opportunities Number of Products 19

Internet-based business models Internet has changed the commerce Internet opens opportunities to develop new Internet-based business models Internet has changed the commerce Internet opens opportunities to develop new and different business models Internet creates new ways to promote, distribute and support products and services

WS Business Models 1) The problem with many proposed Internet services is that you 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 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, 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 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.

SOA 4 ALL Business Models • Community Model Open content • Advertising Model Query SOA 4 ALL Business Models • Community Model Open content • Advertising Model Query Based Paid Placement Context Targeted Advertising • Merchant Model Virtual Merchant • Subscription Model Content Services

Thank You! www. soa 4 all. eu Thank You! www. soa 4 all. eu