WebProNews

Tag: Business Model

  • ServiceNow CEO on “The Whole Point Of Digital Transformation”

    ServiceNow CEO on “The Whole Point Of Digital Transformation”

    “Business is really simple, and people are more productive, and they’re doing things that can lead to growth and opportunity,” says ServiceNow CEO Bill McDermott. “That’s the whole point of digital transformation. Right now, companies are hunkered down with systems that are absolutely wearing them out. It’s time to make the bold move, pivot to ServiceNow, and let’s get in there and fix the job.”

    Bill McDermott, CEO, and President of ServiceNow says that only one in four digital transformation projects actually deliver positive ROI due to lack of integration:

    Most Digital Transformation Projects Don’t Deliver

    We have a situation on our hands where digital transformation, cloud computing, and business model innovation, are all converging at once. ServiceNow is the platform, of all the enterprise platforms, that really makes business work. One of the big lessons that business has right now is trillions have been poured into digital transformation yet only one in four projects actually deliver positive ROI. The reason for that is lack of integration.

    Our system integrates with all the existing systems as well as all the collaborative tools in the enterprise. From day one, the customer gets it up and running swiftly because it’s in the cloud. They begin to derive value from it because you automate the way the work is done and ultimately, you’re now in a position to serve your customers the way they want to be served. It’s a speed game and ServiceNow is at the top of its game.

    Companies Have To Create New Business Models

    We’re an example. If you’re going to grow your company you’re going to take advantage of digital transformation. This is the only way out and it’s the only way forward. In the 20th Century companies put in big heavy on-premise systems. The issue is now they can’t, in a frictionless economy, immediately pivot those business models because they haven’t digitally transformed their business.

    About 25 percent of the opportunity of businesses out there today over the next three years will come from white space places they are not in today. They have to create new business models. They have to think about new partnerships and new routes to market. Without the baseline of a platform like ServiceNow they’re not going to get there. 

    That’s The Whole Point Of Digital Transformation

    I am very optimistic that the economies of the world not only are going to recover but actually going to do very well this year because people are going to be investing in digital transformation. We have seen that does not cost jobs. On the contrary, it frees people up to do things like go after new markets, derive new ideas, and so forth, because the AI revolution is also on.

    We have built-in machine learning and AI into our platform. So 80 percent of the soul-crushing work people don’t want to do is done by the Now platform. The 20 percent that involves a human immediately gets initiated through a workflow order from the Now platform. 

    Business is really simple, and people are more productive and they’re doing things that can lead to growth and opportunity. That’s the whole point of digital transformation. Right now, companies are hunkered down with systems that are absolutely wearing them out. It’s time to make the bold move, pivot to ServiceNow, and let’s get in there and fix the job.

    Fastest-Growing Pure-Play SASS Silicon Valley Company

    If you look at our actual earnings results, they were stunning and obviously achieved beyond expectations performance across the board. We also followed that through in the guide. We’ll continue to be the fastest-growing pure-play SASS Silicon Valley company. We will continue to have the best margin profile of all of them. Obviously, we’re going to continue to gain market share in industries around the world, in geographies around the world, particularly in Europe and Asia Pacific, and Japan. 

    We will also gain market share on personas. Lots of people are getting the memo now that ServiceNow obviously dominated the IT automation market but the same backbone platform has enabled us to change the employee experience, the customer experience. In these tough times with COVID we can write low-code onto our platform in minutes and roll out new applications to hundreds of thousands of people so companies can move super fast.

    We keep the guide consistent with the revenue that we generated in 2020. If there’s an upside to that… fantastic. That’s what good companies should do. They should go beyond expectations when they can but we stand by the guide and we’re looking forward to having a great year. 

    ServiceNow Was Born In The Cloud

    The whole idea of ServiceNow is so different than SAP which was a company that needed to pivot to the cloud in 2010. We did that and that was very successful. ServiceNow was born in the cloud. It’s a very young company with tremendous growth opportunity on the organic front. Having said that, (we would be in interested in an acquisition) if you have a situation where there is a partner out there that has a substantial TAM, that can be highly complementary and synergistic with ServiceNow on the revenue side. 

    It also would have to do great things for the customer, because we have a precious platform and we jealously protect the integration power of that platform. A lot of things would have to be right but I can tell you as responsible business people we always look at it. We don’t need it to make our goals but you always have to look at it. We do want to be the defining enterprise software company the 21st century. That’s our plan.

  • Does Facebook Have What It Takes to Succeed in Advertising?

    Can Facebook build a strong revenue model out of its advertising platform? This is the big question that a lot of people are asking of late, especially given the social giant’s IPO fiasco. With its more than 900 million users, it’s clear that consumers are fond of the service. However, the question of how Facebook can monetize all these users is the big concern now, especially since it must deal with Wall Street and investors.

    Tom Rikert, Director of Product Development at Wildfire Tom Rikert, the Director of Product Development at Wildfire, which is a company that works closely with Facebook and provides a social media marketing software suite, is familiar with the position that Facebook is up against. You see, Rikert used to work at YouTube and, of course, also faced the challenge of monetizing a massive amount of users through advertising.

    According to him, Facebook is the centerpiece of the majority of brands’ social media efforts. Through Wildfire’s close relationship with the company, it understands that Facebok has a huge audience, a global reach, and that it allows for rich forms of engagement for brands through the use of images, video, and more.

    “We find brands are finding Facebook… to have a lot of staying power, and ultimately… they’ve built an audience [and] they’ve accumulated a lot of fans,” said Rikert.

    “The question is now,” he continued, “what do I do with them to really engage them and to enlist them as advocates for word-of-mouth marketing and to also help them become customers, not just fans or conversation partners?”

    While this is a challenge, Rikert is confident that Facebook can succeed in its advertising efforts. As he explained to us, Facebook has a “treasure trove” of data. This, combined with its user base, could potentially give the social giant a lot of leverage on the advertising front.

    “I do believe, in the long run, that Facebook is sitting on a mound of amazing data on one of the largest audiences in mankind’s history,” said Rikert. “I think if they are smart about how they turn that into dollars through a strategic ad product – mobile [and] ads that could reach across the whole Internet beyond Facebook.com – I think they have incredible legs for long-term growth.”

    Rikert believes that Facebook is being aggressive in its advertising approach but that it has an advantage given all the information it has on users. The social network knows that users can get “ad fatigue” really quickly, which could completely turn them away from the service. But, he thinks Facebook is being smart in its strategy by providing relevant ads based on user’s activities and interests.

    “When done right, ads are actually value add,” Rikert said. “They are connecting people to information they care about and entertainment they care about.”

    “It allows a lot more advertisers to reach the users and gives them the higher comfort level that their ads are gonna be worthwhile and well-received by the users,” he added.

    He, along with Wildfire, feels so strongly about Facebook and its ability to be successful in advertising that he thinks its ad platform will become a critical factor in all online advertising going forward. Specifically, he envisions Facebook having a universal log-in system that could essentially be an open door for all things on the Internet and mobile devices.

    And, to answer the questions about Facebook developing its own version of Google AdSense, Rikert said he could “definitely foresee that” since it already has a “huge footprint of their social plug-ins on hundreds of thousands, if not millions now, of publisher sites.”

    Facebook has also been questioned for its mobile advertising efforts, especially since the company openly admitted in its S-1 filing that its monetization efforts for mobile were yet to be proven:

    “Growth in use of Facebook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results.”

    Still, Rikert has no doubts about Facebook’s mobile strategy either. The company has, of course, started out slowly in mobile, but he expects it to pick up its efforts in the near future.

    “What’s gonna be more interesting is when Facebook can take the mobile experience and really tailor ads based on where a user is and what they’re doing [and] who they’re with,” he said. “That’s when the ad becomes super relevant and much more interesting, and I think it will generate greater click-through rates and better results for advertisers, and more revenue for Facebook.”

    Overall, Rikert is confident in Facebook’s advertising efforts and believes the company’s new real-time exchange ads will further its goals of being profitable.

  • Facebook Privacy Questioned By European Commission – Facebook Reacts

    It appears that the European Commission is preparing to crack down on Facebook. According to a report from the Telegraph earlier this week, the EC is planning to introduce a new directive that would actually ban targeted advertising on the site.

    The newspaper raised privacy concerns and reported that the social giant “‘eavesdrops’ on its users to gather information about their political opinions, sexuality, religious beliefs – and even their whereabouts.”

    Facebook has a personalized advertising model that allows advertisers to target their audience based on various factors including location, demographics, likes, keywords, and other information it receives on users including registration data and information that users share on the platform. However, Facebook does not permit advertisers to know who its users are and also keeps its performance reports anonymous.

    Should Facebook’s advertising model be questioned? Let us know your thoughts.

    This type of advertising model is not only what Facebook uses to make money, but it is also the model that many other Web companies utilize. Nonetheless, Facebook seems to be the primary focus of this effort.

    In a response to WebProNews, a Facebook spokesperson told us:

    “The Sunday Telegraph article is inaccurate, sensational and misrepresents both how Facebook’s advertising model works and the current advertising privacy debate across Europe. By using Facebook, a free service, people agree to see ads that are valuable to them. Crucially people give their consent to be shown relevant ads by agreeing to our terms when they sign up – unlike other online advertising models. We also make clear that we do not share personal information with advertisers without their consent.  We have spent considerable time and effort building an ads model which allows people to see relevant advertising whilst respecting their privacy: https://www.facebook.com/about/privacy/advertising.“

    “We are fully compliant with EU law, have our international headquarters in Dublin and unlike some other online services, we do not use tracking technology to serve adverts. Our system only provides advertisers with anonymised and aggregated information for the purpose of targeting ads. We do not share people’s names with an advertiser without a person’s explicit consent and we never sell personal information to third parties.”

    If the EC agrees to implement this legislation when it meets in January, Facebook could face legal action or a significant fine. To make matters worse, the European Union’s data protection working party is meeting next week to analyze the social network and discuss how it should be audited.

    Incidentally, this European news comes just as Facebook reached a settlement with the FTC over user privacy. Through the settlement, the social network is required to give users a clear and prominent notice before it changes the way data is shared.

    In a blog post about the settlement, CEO Mark Zuckerberg acknowledged that mistakes had been made but promised better privacy and more user control going forward.

    “I’m the first to admit that we’ve made a bunch of mistakes… But we can also always do better. I’m committed to making Facebook the leader in transparency and control around privacy.”

    In the post, he also announced two new corporate privacy officer roles. Erin Egan was appointed to the Chief Privacy Officer of Policy, and Michael Richter was appointed to the Chief Privacy Officer of Products.

    Does Facebook’s money-making model raise a privacy issue, or is the EC making invalid claims?

  • Is Advertising the Best Option for a Business Model?

    It’s no secret that many businesses today, especially in the tech industry, create great services but wait until after their service has taken off to come up with a revenue model. Twitter, for instance, is one very useful company that began this way.

    This model works in many cases, such as with Twitter, but the question of whether or not it is an effective business practice is still debatable.

    Should the business model or the success of the business come first? What do you think?

    Many of these online businesses find their business model in an advertising platform. While we’ve seen multiple companies have great success with advertising, studies show that consumers are often frustrated by the excessive ads.

    In a recent interview with WebProNews, Jeff Tinsley, the CEO for MyLife, told us that businesses have more than one option when it comes to finding a revenue model. He said, “Advertising is not the only model that works, as proven by us and proven by LinkedIn.”

    In addition to MyLife’s free service, it also has a premium model with three different subscription services for users. He told us that users are willing to pay for what they consider to be valuable. In this case, in particular, users see value in connecting with people they want to hire and vice versa.

    Tinsley said that both sides benefit, so it makes it something that is worth paying for. He went on to say that this model has worked so well for MyLife that there is potential for an IPO in the future. He said that it is something that they “seriously want to take a look at.”

    More than likely, opinions are mixed on determining the best form of monetization for a business. However, I think it’s safe to say that most of the deciding factors depend on the business itself. Any thoughts?

  • LivingSocial Reacts to Recent Studies about Daily Deals

    A couple of recent studies brought out some interesting, but contradictory data pertaining to daily deals’ providers. The first study from Rice University found that the business model behind daily deals’ sites was unsustainable and predicted “tough times ahead for daily deal sites.”

    The study specifically examined Groupon, LivingSocial, OpenTable, Travelzoo and BuyWithMe. If you remember, the New York Times questioned Groupon’s business model in a report earlier this year as well.

    “The major take-away from the study is that not enough businesses are coming back to daily deals to make the industry sustainable in the long run,” said Utpal Dholakia, an Associate Professor of Management at Rice University. “And our results from three studies and close to 500 businesses surveyed show that the deals are nowhere close to the rates of financial success for participating businesses that some companies claim to be having.”

    Interestingly, a second study was released even more recently that revealed just the opposite. The study from ForeSee Results found that new customers were, in fact, coming in and purchasing offers through daily deals’ sites, namely LivingSocial and Groupon.

    Larry Freed, the President and CEO of ForeSee Results, wrote this regarding their findings, “31%, are brand new business (new customers who weren’t aware of the company before the deal plus those with some brand awareness), 27% were infrequent customers, and 4% were former customers. That’s at least 35% and arguably 62% of deal buyers that represent NEW business.  This is compelling data, and these are the customers that provide what the daily deal model is supposed to provide: bringing you new customers to try your business or products out.” (No emphasis added).

    Needless to say, these studies have resulted in some confusion in the industry. Should merchants and consumers put their trust in Rice University, ForeSee Results, or neither?

    What do these studies tell you about the daily deals industry? We’d love to know your thoughts.

    In hopes of clearing up some of the confusion, WebProNews reached out to Maire Griffin of LivingSocial. According to her, the studies help to enforce checks and balances on the industry, but they don’t dictate what the real goals of LivingSocial are.

    When we spoke to Aaron Batalion, co-founder and CTO of LivingSocial, earlier this year, he pointed out that LivingSocial’s focus was on “local commerce” and not daily deals. Griffin spoke further to this point and said that the company worked with merchants on an individual level to create deals that not only encourage consumers to buy, but that would also help move the merchant’s business forward.

    “We’re confident in what we’re putting together for all local merchants in all of our different product sections,” she added.

    She also brought up another important point regarding LivingSocial’s approach. She said, “Daily deals are an important part of our business, and they will continue to be an important part of our business; but one thing that LivingSocial is really great at is innovating our products… our different lines, be it Families, Instants, Escapes, build on what we know and we’ve really perfected from a daily deals’ perspective to help more and different kinds of merchants all around the globe.”

    Even though Rice University’s study shed some pessimism on the future of daily deal’ providers, it found that 83 percent of LivingSocial’s customers were new customers. Griffin told us that internal data from LivingSocial shows a similar high influx of new customers and also an increasing number of secured relationships between the company and its merchants.

    “Our tremendous growth has really reinforced that we are putting the right steps in place,” she said. “We really believe in creating relationships with our merchants; that’s why we have actual employees in every single one of our markets, so we can learn that merchant’s business.

    In terms of the overall space, she additionally stated, “The industry has proven that it is good for local businesses.”

    Do you agree with LivingSocial and believe that daily deals are beneficial to local businesses?

  • Thinking Ahead Is Key To Business Success

    Thinking Ahead Is Key To Business Success

    The fourth annual We Media Conference hosted at the University of Miami offered a peek into the future of media. The common thread from Tuesday’s mind-meld was not the same old “newspapers are dead” theme that so many of these conferences run into the ground. Instead, the focus was on the changing media landscape — an evolution that ultimately leads to a completely social and interactive media. If true, companies will need to focus on social engagement, placing higher expectations on corporate social responsibility (CSR) and in some ways blurring the lines between businesses and non-profits.

     

    This point was driven home again last night as I chatted over dinner with Alan Webber, founder and former CEO of Fast Company. Alan posed the question, “Why MUST we categorize everything as either for profit or non-profit?” He then answered himself, “This is stupid. It makes no sense. Why can’t we make money and make a difference simultaneously? The future of every business will include a foundation or non-profit arm that backs every prosperous company.”

    The changes to the business model as we know it offer far more opportunity than challenges. But — and this is a big “but” here — these grand opportunities only exist for the companies that recognize them and adapt quickly.

    The most prized benefit from quick adaption is increased revenue and corporate sustainability. And, by the way, you will also be doing the right thing, which will undoubtedly make your mother (and your shareholders) proud.

    In most cases, the more you responsibly give back and are able to tell that story the more your company will grow. That’s the advantage of being socially engaged. Your company’s reputation will create public trust and customer brand loyalty, improve investor relations, support employee recruitment and build partnership opportunities. The key is that you must have a strong CSR media strategy which will highlight your efforts in your overall business model.

    Earlier this year, Pepsi made a bold move when they opted out of buying Super Bowl ads for the first time. Pepsi is already on to the game — they saw an opportunity to gain social credibility using the would-be ad money to launch their Refresh Everything Project. The project calls for 1,000 idea submissions per month from people, businesses and non-profits to promote positive change. Ideas are judged on their merits and the prize money ranges from $5,000 to $250,000. Pepsi’s strong CSR media plan allowed them not only to capture news buzz around the Super Bowl, but it allowed them to also space out good-will news throughout the year, achieving many of the goals outlined above.

    Pepsi seized an opportunity. What opportunities is your company missing? You can lead the way forward today, but need to think differently. Don’t create a strategy around the model where business and media find themselves today — think ahead.

    Where will business and media be tomorrow?

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