Consumption Economics: The New Rules of Tech

Too often entreprenuers are using old concepts of how to build and grow companies in 2012 and beyond. Unfortunately, the entreprenuer's business models, go-to-market, pricing, and delivery models are all inefficient and wrong. Not only do the old models consume too much capital ... it is not how customers are buying today nor how the fastest growing companies are being successful.This book clearly articulates the shift in thinking needed to be successful in the future. It is provocative, innovative and yet practical all at the same time. As a serial entreprenuer, angel investor and private equity investor ... this book is a roadmap on how to suceed in today's hyper competitive technology environment and how to create value while building a great business.The authors have built businesses and advised the biggest and fastest growing technology companies in the world and now have shared their insights in a digestable and articulate manner.A must read for entreprenuers, CEO's, CTO's, angel investors, Venture Capitalists, Private Equity, and public company investors who are building or buying great companies in the technology space (i.e. software, SaaS, Cloud, Social networking, ecommerce, internet and Web 2.0 companies). I always look for practical concepts to help the entreprenuers I work with ... this book didn't disappoint me.

As part of the research for my next book “Building Successful Partner Channels” I came across the book “Consumption Economics.” Although the book is not a literary masterpiece (is far too long with far too many repetitions and with illustrations that are confusing rather than illustrative (and unreadable in the Kindle version)) it is still worthwhile reading for its’ thorough analysis of the impact of the “________ as as service” format on an industry that have been dominated by the capital investment format. The software industry that has been blessed by the “pay first - consume later” principle is now transforming to a “pay as you consume” format and the “Consumption Economics” book is worth reading if you are affected by these changes.The transformation is driven by numerous interests and factors such as fast and inexpensive access to the Internet, the customers’ appreciation of the “pay as we consume” format, the end-users’ option of circumnavigating the CIO and his IT department for new applications, the opportunity of insurgents to disrupt established markets (salesforce.com, Netsuite, Workday, Basecamp, Atlassian, Zendesk, Dropbox, Skype etc.), the reduction in complexity for the user and the enormous economy of scale benefits of using large data centres. With so many drivers and benefits the challenges associated with integration, customisation, privacy, security, availability, survivability and performance will be solved enabling the “________ as as service” format to also deep-penetrate the enterprise markets. Wood, Hewlin & Lah predicts that the transformation will take place in most segments of the market within the next 5-10 years leaving only very small pockets resistant to the consumption format.While the book is very thorough analysing the challenges and opportunities for the software and technology vendors it doesn’t say much about the challenges for the independent channel partners. I have devoted a chapter in my new book to discuss exactly this issue because I believe that independent channel partners may continue to play a crucial role in the software industry serving customers with vertical and horizontal extensions to the core software and providing numerous auxiliary services ensuring that the software actually delivers the value expected.

I bought this book because a very highly placed executive at my company recommended it during a meeting. I am glad I did !A very excellent book that is a must read for people on both buy and sell side of the IT equation. As a long time IT person having worked in various environments, we have been "feeling" the trends noted in the book but the authors explain the hows and whys well. More than anything, the book gives a clear direction of what at preparation is required at personal and organizational level.

Good thought provoking book for anyone working in the enterprise software business. For me it had a lot of good points that made me realize the value of being close to the customer even with enterrpise level software and has helped me refocus some of my activiies.I do think the authors are over shooting the mark a bit in their enthusiasm for their model. There is a lot of to and fro in the market where the buying behaviour shifts from decentralized to centralized models. While the trend may be to decentralize at the moment, I don't believe it will be all encompassing nor will it be dominant forever. Eventually centralization of IT budgets and control of software will happen again.

I've been in tech since the mid-80's. Many of the frustrations they mention for customers today I have seen first hand. The direction of tech sales and services put forth in this book really seems very plausible to me, in some cases highly likely. The timeline offered late in the book is reasonable as well, though there is not much time devoted to "when" in this book. But, the likelihood of many of their theories seem more than reasonable to me. I might argue that one the key tenants in the book is around simplicity becoming king over complexity may be the viewpoint from the end user. But, the underbelly of the cloud could remain very complex for quite some time, and my never reach simplicity. You might say that complexity will be reduced for many organizations and users, but it is really be moved to the cloud provider networks and systems. I'm not sure they really say that in this book. This is a small point of contention for an otherwise very good look at the likely future of tech sales/service.

This book is outstanding. It's staggering that the authors wrote this before the impact of consumption-based business was really very prevalent. Today, with the public cloud, IT service providers, and myriad SaaS solutions on offer this book should be read by everyone in a business that needs to consider the impact of subscription-based, monthly-in-arrears invoicing on their business. The book covers basic principles, marketing, sales, Services, and more.

Very insight full book. It is worth reading twice.

Lavorando nel settore ho potuto comprendere fenomeni che in effetti erano nell'aria ma non del tutto chiari.Inoltre mi è servito moltissimo per avere ispirazione su nuove iniziative tecnologiche e scelte che si stanno rivelando produttive.Lo consiglio per direttori commerciali e marketing, figure chiave e imprenditori che lavorano nell'ambito delle tecnologie. Molto adatto per chi ha un datacenter (anche piccolo e dello sviluppo applicativo).

Impossible not to take notes and apply the thinking & logic to your business.

Great insight into the future of the tech industry and cloud computing and how to adopt to the future challenges