business models and revenue models in the software industry

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

HYBRID REVENUE MODELS AND HYBRID BUSINESS MODELS

WWW.DRKARLPOPP.COM

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

What drives me?

• Modeling, Construction and evaluation of business models and revenue models for software companies

• Why? I would like to use that knowledge to– Select a software partner ecosystem that fits

the business and revenue model of a software company

– Create new software business and revenue models

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

Background information

Business Models in the software industry

http://www.drkarlpopp.com/BusinessModelsintheSoftwareindustry.html

Profit from Software EcosystemsISBN-13: 978-3842300514Business Models, partnership models and ecosystems in the software industryExamples from over 50 software companies

click here to order

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

Business, Business Model and Revenue model

Business pattern

Revenuestream

Business model

consistsof

RevenueModel

consistsof

Business

has one or many

has one or many

Causalityrelationship

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

What is a Business pattern?

Type of Goods and

Services

Business model

Archetype

Business Patterns

consistsof tuples of

Based on the work by Weill et. al.

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

Business Patterns

Type of Goods/Services offered

Financial Physical Intangible Human

Creator Entrepreneur Manufacturer Inventor n/a

Distributor Financial

trader

Wholesaler,

Retailer

IP

distributor

n/a

Lessor Financial

lessor

Physical

lessor

IP lessor Contrac-

tor

Broker Financial

broker

Physical

broker

IP broker HR

broker

Based on the work by Weill et. al.IP = Intellectual property

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

Hybrid Business Model for Software as a product

Type of Goods/Services offered

Financial Physical Intangible Human

Creator Entrepreneur Manufacturer Inventor n/a

Distributor Financial

trader

Wholesaler,

Retailer

IP

distributor

n/a

Lessor Financial

lessor

Physical

lessor

IP lessor Contrac-

tor

Broker Financial

broker

Physical

broker

IP broker HR

brokerSoftware vendors provide maintenanceand support services and/or consulting

Business pattern used in the business model

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

Hybrid Business Model for Software as a service

Type of Goods/Services offered

Financial Physical Intangible Human

Creator Entrepreneur Manufacturer Inventor n/a

Distributor Financial

trader

Wholesaler,

Retailer

IP

distributor

n/a

Lessor Financial

lessor

Physical

lessor

IP lessor Contrac-

tor

Broker Financial

broker

Physical

broker

IP broker HR

brokerSoftware vendors provide operating, maintenance and support services

Software vendors provide hardware usage to customers as part of SaaS

Business pattern used in the business model

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

SAP Revenue Models (excerpt)

Revenuemodel for

SaaP

Revenuemodel forSoftware adaption/ extension

Revenuemodel for

maintenance

SAPRevenue

consists of

Revenuemodel forsupport

Revenuemodel for

SaaS

Revenuemodel forpartner

ecosystem

Revenuemodel

for consulting

consists of

Revenuemodel for reselling partner solutions

Largest share of revenue

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

Microsoft Revenue Models (excerpt)

Direct Revenue model for

SaaP

Revenuemodel for

maintenance

MicrosoftRevenue

consists of

Revenuemodel forsupport

Revenuemodel for

SaaS

Indirect Revenue model forpartner

ecosystem

Revenuemodel

for consulting

consists of

Largest share of revenue

Revenue model forappliance

sales

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

Google Revenue Models (excerpt)

Revenuemodel for

SaaP

Revenuemodel for

broker

GoogleRevenue

consists of

Revenuemodel forsupport

Revenuemodel for

SaaS

Revenuemodel forpartner

ecosystem

consists of

Largest share of revenue

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

Google Search Services and Compensation

SearchCustomers

AdvertisingAdvertisingCustomers Google

Products,Assets orServices Compensation

PPC adver-tisingservice

SearchService

SearchCompensation

Advertisingpayments

Search customers compensate for the search service with

data about their search interest

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

Comparison of the three revenue models

SAP Microsoft GoogleMain business

model

Software as a

product (hybrid)

Software as a

product (hybrid)

Broker

(hybrid)

Main source of

revenue

Maintenance and

support

Indirect license

revenue

Advertising

non-monetary

Revenue streams

No Yes (Bing) Yes (Broker)

Revenue synergies

between e.g. …

SaaP maintenance,

support and SaaS

Ecosystem and SaaS Advertising and all

other businesses

Impact of existing

ecosystems

Customer ecosystem

funds innovations

and subsidizes new

business

Partner Ecosystem

funds innovations

and subsidizes new

business

Customer and

partner ecosystem

subsidizes new

business

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

Background information

Business Models in the software industry

http://www.drkarlpopp.com/BusinessModelsintheSoftwareindustry.html

Profit from Software EcosystemsISBN-13: 978-3842300514Business Models, partnership models and ecosystems in the software industryExamples from over 50 software companies

click here to order

Copyright © 2011 Dr. Karl Popp http://www.drkarlpopp.com

Video lessons

• Get your education online at mindbites.com:

• http://www.mindbites.com/lesson/13903-software-business-model-basics

• http://www.mindbites.com/lesson/13904-software-revenue-models