In the last MetraTech blog, we explored the topic of how you price for cloud and other services. In this blog, we focus on the everything-as-a-service (XaaS) movement and the impact on current pricing and business models. While the cloud industry is heavily impacted by this trend, it is by no means alone. The cloud represents a radical business model change for those vendors that were not born into it. We’ve all seen the mass confusion out there about how to monetize cloud business models and in the process of figuring it out, service commoditization. But like all massive market changes, once the dust settles, a new player takes control. After all, Amazon didn’t exist as a cloud provider until relatively recently. It is important to focus on what it will take to unseat the market leaders and we all know price alone is a race to the bottom where even the winner loses. I can recall a quote from the CEO of one of the largest software companies in the world who famously said at an analyst conference in September 2008 (yes less than five years ago), “the interesting thing about cloud computing is that we’ve redefined cloud computing to include everything that we already do. […] The computer industry is the only industry that is more fashion-driven than women’s fashion. Maybe I’m an idiot, but I have no idea what anyone is talking about. What is it? It’s complete gibberish. It’s insane. When is this idiocy going to stop?» Of course at that same analyst conference, he also admitted that his company would start selling cloud services, too. And therein lies part of the problem, there is a fundamental sea change afoot that requires a new way, a better way. Not the old way.