During the lectures and while reading the financial news, some themes are recurring and may give you the feeling of buzz-word bingo. AI, Big data, IoT, Saas and the topic of this blog: Cloud Computing. It sounds broad, it sounds vague, but nonetheless, the cloud could be one of the biggest advances of the coming years.

What is Cloud computing?
Cloud computing is the availability of different services over the internet, mainly tools and applications like data storage, servers, databases and software. The main added value is: the customer does not have to have these tools and application in their own possession, but can access them over the internet for a way lower fee than an investment would be to actually own these tools or applications.
In the guest lecture JP, from Amazon Web Services, stated that Cloud Computing was the main driver behind innovation and agility. With the usage of a cloud computer, any company, at any place in the world, can alter their code and test their products at very low costs. Instead of building a whole infrastructure, a company can just hire an extra server in the cloud. Exactly this testing capability is the key to success in many digital business models, as was confirmed in the Cool Blue guest lecture of today.

Snowflake
To sketch the amount of money that goes on in this market, and the appetite for investors in companies that deliver cloud services, the IPO of Snowflake is a good example. In September this year, Snowflake went to the stock market. It actually was the largest IPO ever for an American tech company, and at the end of the first day, the company was worth $90 billion. Quite a large value for a brand most people never heard of.

Market for the big players
The tech giants of the world have played into the cloud businesses well at the time. Amazon is market leader, with 32% of the worldwide market share, followed by Microsoft (17%), Google and Alibaba (both 6%). Together, these players account for 62% of the market. One could argue that these early movers positioned themselves very well, participating on a new high-growth market in which they can dominate.
However, Cloud services are not only limited to the tech world. As discussed in classes from professor Ting, banks are not essential, banking is. To stay relevant, major banks Goldman Sachs and Deutsche Bank have partnered up with Google, and HSBC has closed a partnership with AWS. All to set up a cloud-based services environment.

And looking at the numbers, they have picked the right market. The global Cloud Computing market is expected to grow from a $371 billion value in 2020 to $832 billion in 2025. The current situation with the covid-19 pandemic, has even accelerated this growth, due to many companies switching their business to have an online infrastructure.

Get onboard
So, Cloud Computing is one of the technological areas with a lot of growth and a lot of opportunities in the future. How can we, as BIM students be prepared and participate in these developments? Well, at first we can lecture ourselves on topics via courses, relevant news-sources and blogs as this one. That way we are future-proof on the job market.

P.S. with the Library Access plug-in of the university, you have unlimited access to articles of many journals and newspapers, e.g. the Financial Times

At the beginning of August the Dutch newspapers and websites picked up the news that Kruidvat (a Dutch retail, pharmacy and drugstore chain specialized in health and beauty products), was adding wills and cohabitation-contracts to its services through a partnership with Ligo. Jokes as ‘Hair wax, paracetamol and wills in in one shop’ were the headlines in the news. You could miss the fact that this could be a sign of disruption in a very conservative market.

Notaries and their services
Notaries and junior notaries deal with all kinds of law (real estate, private, family and company). If you want to set up a will, want to make you cohabitation official, or if you want to start your own company, you have to go to a notary to make it official. The current business model is mainly based on hourly fees. This results most of the time in high prices for products, which leaves a lot of customers without a will (exact numbers are unknown, but a study by Dela in 2015 claims 60% of all Dutch people). One of the main causes: too expensive.
The services that are offered by Kruidvat and Ligo are standard-documents, customers that fall in an exemption category cannot use the product. However, if you are eligible for this product, you pay €199 for the product, instead of up to €750 at a notary. Quite a difference, and exactly where this is a solution to a painful problem: too expensive.

Christensen, disruption and the notary market
Looking at the Christensen, and his theory on disruptive innovation, the notary market is ripe for disruption, and the products offered by Kruidvat is a good start to this. The notaries are focusing on improving their products for their most demanding customers. Entrants (Ligo x Kruidvat) are successfully targeting those overlooked segments. Incumbents tend not to respond, and where the new entrants move up in the market and are adopted by mainstream customers, disruption has occurred.

Technology behind the disruption
This price reduction earlier mentioned, it has to be saved somewhere. So what do these start-ups do? Ligo uses software to automate the concept documents in the process of wills (and also incorporations of limited companies and foundations). This saves time, thus the services can be offered at a lower price and at a higher speed. Because of the legal position of notaries, customers still need to go to a lawyer (which is attached to the platform), to lawfully pass the deed of the incorporation of the will.

(Overlooked) consumers are the winners
Looking at it from a consumer perspective, these developments are great. Why would you pay an hourly fee, for setting up a concept, if you can use software for the same product. Looking forward, taking into account the new generation that come to the market, these kind of applications will be used more and more. One could think of the ‘older generation’ not feeling comfortable with online products, but the new generation certainly won’t have a problem with it. (After all, we will all get our Masters distinction via online education, right?)

Main takeaways
During the lectures of Information Strategy the term disruption has fallen frequently. Maybe yourself are thinking of a sector that is ready for disruption, and you want to start your own business for this. Let the business model of Kruidvat and Ligo be an example to you. To enter a market, the product itself doesn’t need to be that complex, you just need to start and serve the overlooked segment. (And if you start, use a platform like Ligo to incorporate your business, instead of the conventional way.)