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Yu, Chunling;Zhao, Ziqian
Information technology industry;Software development industry;AI, big data, and cloud computing industry;Enterprise technology industry
When Yonyou''s founder Wang Wenjing was considering the pros and cons of fully embracing the cloud-based SaaS (software as a service) model, the company was on the road to becoming China''s leading ERP software provider. It took years for Yonyou to entirely change its business model from selling software licenses to collecting services fee. Industry-wide, the trend was more than clear that providing cloud-based service would become a predominant business model, but it was still a difficult decision for individual competitors because it would mean a series of changes, including reshaping executives'' mindset, reorganizing teams, cutting staff, redefining key performance indicators and incentive plan, to support its shift from the traditional cash cow business to an emerging one. Some actions were painful but necessary. Additionally, Yonyou''s management needed to keep a close eye on its financials just in case that investors might not be satisfied with the results. The new business model that Yonyou adopted was a cloud platform that provided a base and a set of uniform standards for partners such as independent developers and service providers to join and prosper. The biggest challenge ahead was to take every opportunity to educate the market and grow its subscription-based revenue so that it was able to stand fast in terms of domestic market share.
Cloud computing;Digital transformation