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Cloud technology is becoming a way of life for many businesses. With the advent of the Internet of Things (IoT) and artificial intelligence, more and more aviation companies are moving from selling products to selling services. Using ubiquitous, on-demand access to a shared pool of computing mechanisms that can be provided quickly and released with minimal management effort, companies are now turning to service models that include device and service telemetry for customers, and that requires proper support and management.
We are seeing this particularly in capital-heavy industries like aviation. It means that providers of heavy equipment, like the aircraft maker itself, can provide rental or maintenance of a plane as a service model for their customers. For manufacturers, this decreases their dependence on revenue from large, unpredictable deals, by adding new revenue streams based on additional service value, which provide a steady flow of income.
It also removes the big capital barrier to entry for airline operators. They no longer need to source millions of dollars of financing every time they want to buy an aircraft, and instead can just get one from a main manufacturer and rent for the amount of flying or airtime they require or that the vendor allows. It’s a win-win scenario for both the vendor and the customer. Think Uber air: renting an aircraft from anywhere and at any time.
Aviation-related companies that are tapping into Cloud aren’t doing so because it’s the hip word on the street; rather, they are doing it to drive specific goals that lead to key performance outcomes, company growth and profitability. Cloud has multiple purposes and is available everywhere, which means it can be quite elastic and self-served for those using it. It can also be metered and it can draw from a large pool of resources.
“Cloud is a gateway to higher business intelligence and because of it everyone is turning into a service-oriented company,” according to Michael LaPalme, director of product management at Bell. “Telemetry data mining as it relates to offering a monthly reoccurring revenue service is much easier to do in Cloud, and having access to this key data allows companies to optimize performance much better and make sound research-based decisions.”
More and more, we are seeing this shift from product to service. Companies that sell you the equipment will also sell you the service of the management and monitoring of the equipment, and this is all courtesy of Cloud technology. For example, if someone wanted to launch a new airline, why buy planes when you can pay for only the thrust or mileage that you actually need?
While working for an energy company, I witnessed the transition from selling only the utilities to tackling the much bigger problem of system breakdown. The company then changed its business model and started offering proactive substation monitoring of substation equipment.
Cloud also helped John Deere to build in a company service called “talk to your tractor.” They have morphed from selling large farm equipment to selling a service that predicts and analyzes customer equipment usage through the IoT. They have started to move into adding sensors to their equipment, so that they can predict breakdown or servicing issues by monitoring the environment, ground and soil that a tractor works in. The tractor then communicates to the user when maintenance is required and on a monthly basis John Deere makes a profit off that service. These are just a few ways that Cloud technology fosters industry growth.
“Cloud can enable some compelling business innovations. People are seeking to purchase more than a product or an asset. They want to purchase the service around the product, and they want to buy outcomes that allow them to reach a goal or objective,” says LaPalme.
With the adoption of Cloud by aviation and airline companies, they now have access to infinite processing and telemetry through the Internet, giving them the capabilities to diversify and shift to be more competitive. They can change their role in the industry or even enter new industries.
There’s no cloud clearance requirement here, and this cloud won’t block your view. It will only enhance it by providing you with a new platform for creating and delivering true business value.
Nabeel Sherif is the creator and lecturer for University of Toronto’s Cloud Computing Certificate program. He was former cloud product manager at Q9, a division of Bell Canada, and has spent most of his career in technology conceptualizing, developing, and marketing computing and communications products for a variety of ICT providers and global electronics manufacturers.