Tionomics

Tionomics

Total Information Outsourcing business models can be grouped in 6 categories, 2 of which require the user to pay and 4 of which generate revenues through side-effects:

  • Subscription: the user pays a monthly or yearly flat fee to access the service. Infrastructure services such as server hosting (ex. OVH, Amazon EC2), name server hosting (ex. DynDNS), domain hosting (ex. Gandi) are based on this model. Some online application providers (ex. Salesforce) also follow this approach. The subscription fee may depend on the number of servers, the number of users, the number of domains, etc.
  • Pay per use: the user pays each time he / she wants to access the service based on the quantity of service he / she uses. This is the usual model for human intensive services such as online support (ex. XXX) or online consulting (ex. XXX). It is also the business model for IP telephony (ex. GrnVOIP) and for CPU intensive data mining services (ex. Lokad).
  • Pay for extra: the service access is free, user is proposed to pay for extra options. Some application providers follow this approach (ex. ERP5 Express) for enterprise applications which require a high level of privacy protection. The profit made on extra options is sufficient enough to cover the expenses required to provide the base service for free.
  • Advertising: the service access is free, ads are displayed to the user. Some application providers (ex. Google) follow this approach for applications which involve a lot of text and data to build user profiles. Ads which are displayed generate enough profit to cover the expenses required to provide the service for free.
  • Private data retail: the service access is free, data entered by the user is processed and sold to third parties. Some application providers (ex. Google) follow this approach with some degree of privacy enforcement. The financial figures in relation with this business model are too few though.
  • Differentiator: the service access is free and is mostly used to diffrentiale a generic offer by adding value to it. For example, OVH hosting company also provides domain registration, GANDI domain registration company also provides advanced Web Mail, etc. The profit generated through differentiation covers the expenses required to provide the service for free.

Business models can be combined. For example, SalesForce is provided at reduced subscription rate to users who accept ads to be displayed within their application (XXX Reference). Some VOIP services (ex. Keyyo, Blueface) combine subscription for each user and pay per minute for every call made. Google provides an option not to display ads in Gmail if users pay a yearly subscription (XXX Reference).

All business models are sustainable. They are not equaly transparent to the end user. Private data retail, which is also a common practice in the credit rating industry, can have tremendous costs which are extremely difficult to predict for a company. Displaying ads may lead to reduced productivity of staff.

It is important to increase the awareness of companies towards TIO business models in order to make sure that their choice becomes fully transparent.