Social Networks as a New “Concession.” “Social networking” is a service delivered via the Internet to an entire universe of end-users who wish to find ways to link to other individuals using common software tools. Companies such as MySpace, Facebook, LinkedIn, Spoke, Plaxo and proprietary software developers offer custom-built software tools enabling such end-users to become “affiliated” with others in the same profession, business, non-profit membership organization, university or other institution. As such, the social networking services offer a new distribution channel for marketing of individual services as well as corporate identity and business services. By aggregating potential customers for business, social networks offer a modern day business model of the classic governmental concession. [LINK TO CONCESSIONS at Unique Customers:
Government Procurement and Public-Private Partnerships (“PPP”)
] Social networks can be platforms for new business creation, for which the developers and hosters of the social networks can ask for some royalties or some share of profits from the new business generated.
Social Networks as a Service: Differences from SaaS Model. Social networking technology offered as a service differs from the “software as a service” (SaaS) model.
- In the SaaS model (such as www.salesforce.com), the software developer designs a suite of software tools and may even allow others to create “plug-ins” that are sold separately to the interested enterprise customers. The software is used by a limited number of authorized users in the enterprise to perform their business functions and connect with customers and suppliers. The enterprise customer pays only a monthly service fee.
- In the “SNAS” model, the software developer creates a self-service platform for a large universe of users. The social network becomes a channel for distribution of new services, products. The social network creates affiliations leading to commercialization of new services and products. The software developer can use that channel to build new proprietary business models for the enterprise customer, with shared rewards or at least some form of royalty. The enterprise customer might pay both a monthly service fee plus some form of gain sharing.
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