4.1 Types of IT Business Models

IT business models are evolving rapidly in the digital age. Cloud computing, recurring revenue, and open-source strategies are reshaping how tech companies operate and make money. These models offer flexibility, scalability, and new ways to create value for customers.

E-commerce and marketplace platforms are transforming how businesses connect with consumers and each other. From B2C to B2B to D2C, these digital models are creating new opportunities for companies to reach customers and streamline transactions in innovative ways.

Cloud Computing Models

Service Models

Top images from around the web for Service Models

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  C’est quoi ‘IaaS’, ‘PaaS’ et ‘SaaS’: Le Cloud! – CloudReady CH – Medium View original

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  UML Deployment Diagram for IaaS and PaaS Cloud Systems - Stack Overflow View original

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  C’est quoi ‘IaaS’, ‘PaaS’ et ‘SaaS’: Le Cloud! – CloudReady CH – Medium View original

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  UML Deployment Diagram for IaaS and PaaS Cloud Systems - Stack Overflow View original

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Top images from around the web for Service Models

• 

  C’est quoi ‘IaaS’, ‘PaaS’ et ‘SaaS’: Le Cloud! – CloudReady CH – Medium View original

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• 

  UML Deployment Diagram for IaaS and PaaS Cloud Systems - Stack Overflow View original

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  C’est quoi ‘IaaS’, ‘PaaS’ et ‘SaaS’: Le Cloud! – CloudReady CH – Medium View original

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  UML Deployment Diagram for IaaS and PaaS Cloud Systems - Stack Overflow View original

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• Software as a Service (SaaS) delivers software applications over the internet, eliminating the need for users to install and run applications on their own computers or infrastructure (Salesforce, Google Workspace)
• Platform as a Service (PaaS) provides a platform for developers to create, run, and manage applications without the complexity of building and maintaining the underlying infrastructure (Heroku, Google App Engine)
• Infrastructure as a Service (IaaS) offers virtualized computing resources, such as servers, storage, and networking, over the internet, allowing users to scale resources up or down as needed (Amazon Web Services, Microsoft Azure)

Deployment Characteristics

• On-demand self-service enables users to provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction with each service provider
• Broad network access allows services to be available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms (mobile phones, tablets, laptops, and workstations)
• Resource pooling enables the provider's computing resources to be pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned and reassigned according to consumer demand
• Rapid elasticity capabilities can be elastically provisioned and released, in some cases automatically, to scale rapidly outward and inward commensurate with demand, appearing to the consumer as if the capabilities available for provisioning are unlimited and can be appropriated in any quantity at any time

Revenue Models

Recurring Revenue

• Subscription model charges users a recurring fee, typically on a monthly or annual basis, in exchange for access to a product or service (Netflix, Spotify)
• Freemium model offers a basic version of the product or service for free, while charging for premium features, functionality, or virtual goods (Dropbox, LinkedIn)

Open-Source Revenue

• Open-source model makes the source code of the software publicly available, allowing users to modify and distribute the software
• Revenue is generated through various means, such as offering paid support, consulting services, or selling complementary products (Red Hat, MySQL)
• Dual licensing offers the software under both an open-source license and a commercial license, providing the option for users to purchase a license with additional features, support, or indemnification (MongoDB, Elastic)

Digital Business Models

E-commerce

• Business-to-Consumer (B2C) e-commerce involves online transactions between businesses and individual consumers (Amazon, eBay)
• Business-to-Business (B2B) e-commerce refers to online transactions between businesses, often involving wholesale purchases or supply chain management (Alibaba, Shopify)
• Direct-to-Consumer (D2C) e-commerce enables manufacturers to sell products directly to consumers, bypassing traditional intermediaries such as retailers or distributors (Warby Parker, Casper)

Marketplace Platforms

• Two-sided marketplace connects buyers and sellers, facilitating transactions and earning revenue through commissions, fees, or advertising (Airbnb, Uber)
• Multi-sided marketplace brings together multiple groups of participants, such as buyers, sellers, and service providers, creating a platform for interactions and transactions (Etsy, Fiverr)
• Managed marketplace takes a more active role in the transaction process, offering additional services such as payment processing, quality control, or customer support (Opendoor, Carvana)