The desire to reduce costs clearly contributed to the first wave of cloud computing. To be sure, the cloud has helped companies get a better handle on IT costs. And that’s understandable given that many IT organizations remain stuck in a mindset of proving the business case for IT investment through cost savings.
But as we reach the midpoint of 2015, it’s increasingly clear that the promise of the cloud has more to do with the role it is fated to play in accelerating the enterprise’s rate of innovation.
IT managers describe the cloud as the most important technology initiative they have on their agendas for this year. They also say the cloud is causing fundamental changes in their businesses by helping them to improve service and generate new revenue streams.
“When we get software through the cloud, we get updates, new features, at three to six times the rate we had with traditional software,” Frank Gens, SVP and chief analyst at IDC, said in a recent interview. “We’re not talking about patches or bug fixes; we’re talking about driving new waves of innovation out to the market at a rapid rate. Companies that don’t use the cloud to drive this new value and innovation to the marketplace won’t keep up with the market.”
This shift will drive the next wave of cloud investments. Some 75% of enterprises have already transferred at least one segment of their data, infrastructure or apps to the cloud, a trend that will continue throughout the rest of the year according to Computerworld’s annual Forecast study of IT executives. And with more organizations updating their existing cloud services – or intending to do so over the course of 2015 – there’s also going to be greater recognition of the broader business implications of cloud adoption.
“Almost across the board it’s something that organizations are still prioritizing,” says Forrester senior analyst Lauren Nelson. “Companies are realizing that the development side is really what’s unique about cloud. Besides all the cost savings or consolidation efforts they were thinking about before, the true benefit behind the cloud really is in differentiating your business and creating net new workloads that are going to change your customer experience.”
It’s no exaggeration to suggest that the near-term evolution of business will hinge on the ability of the cloud to create new business value for companies. Indeed, Gens says that the cloud has tripled the number of new developers and innovators in IT who “are going to create about a tenfold increase in new killer applications.”
The signposts are clear: As companies retool to compete in an increasingly digitized world, the systems, services and processes they choose as they move deeper into public, private or hybrid cloud deployments will be critical to their overall success.
“Transforming any organization really means taking a fresh look at your own company, your own industry, and re-envisioning all of that,” said Gens. “That fast rate of innovation will go beyond IT to all parts of the business.”