Cloud Computing Drives New 'Subscription Economy'

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Deploying Applications in the Cloud

While there's more talk than actual use of cloud computing in the enterprise, a Zeus Technology survey looks at the beginnings of a major shift under way. Clear expectations and planning can improve your experience and near-term success.

Once upon a time, the whole application integration concept was nothing short of daunting. But as application integration increasingly becomes a service in the cloud, it's becoming a lot easier to quickly cobble multiple applications together to dynamically drive a new business process.

The latest example of this capability is an alliance announced today between MuleSoft, provider of the iON application integration service in the cloud, and Zuora, a provider of a transaction processing engine used widely in subscription and billing applications.

According to Chris Purpura, vice president and general manager for iON at MuleSoft, the basic idea behind the alliance is to make it a lot easier to access a transaction-processing application that is available as a service on a cloud computing platform. As more companies look to build extended streams of revenue by providing customers with any number of services they can subscribe to, the Zuora service is designed to significantly cut down on the amount of time it takes to provide the transaction processing capabilities needed to enable those services.

Driving this alliance, says Jeff Yoshimura, vice president of marketing for Zuora, is the rise of a "subscription economy" that is largely driven by companies trying to drive additional high-margin revenues from existing customers in order to grow, versus always having to count on acquiring new customers that are comparatively more expensive.

Given the depth and range of those services, Yoshimura says businesses need access to a transaction-processing service that is readily available in the cloud, versus waiting for an internal IT organization to craft one. In that context, the role of the IT department then shifts from building IT services to concentrating more on orchestrating those services.

In the meantime, the whole application integration process is about to dramatically change as that function increasingly becomes a service that can be easily invoked versus a project that needs to be managed over several months. The exact impact that the availability of such services will have on the business is still hard to determine. But the impact on the perception of what can be done in the cloud is likely to be economically profound.