Universities are driving the need for IT consumption-based pricing models more than any other market segment. This is natural given the unique characteristics of their IT environments. First off they are at the forefront of the IT consumerization movement driven by new generations of students and work habits. With one fourth of the undergraduate population and half in most graduate programs changing every year, one can easily understand why this is the case. While BYOD has emerged in the enterprises over the past few years it has been a commonplace in higher education since campus networks were built in the 80s. When public cloud-based applications emerged college students were the first to embrace them and driving some to a prominent position in the industry. Facebook comes to mind.
It is not just students that make the universities very different than other markets. On many campuses you find different layers of IT functions and associated decision making. You have the central IT like all enterprises do. But then you have some lines of business having their own IT function either at the college or department levels. Most major research centers have their own IT groups especially if they house a supercomputing facility. Some grant-funded projects make their own separate decisions on IT services unique for such projects or for very short terms needs.
So what are the pricing models the higher education market is asking for? The answer is of course consumption-based pricing models but the devil is in the details. A simple subscription style “all-you-can eat” model may not be sufficient in most cases (and it is not really consumption-based after all, is it?). We see these in traditional enterprise applications that are converted to a SaaS offer. A utility style “pay-as-you-go” model while provides most flexibility might not have the cost predictability the universities require (remember long distance phone service?). Read More »