Some innovations become part of a storyline that arcs from “visionary” to “comical.”
Take the cloud, for instance. Here’s what technology writer Nicholas G. Carr had to say about what we’ve come to call the “cloud” in his 2003 article "IT Doesn’t Matter":
“More and more, companies will fulfill their IT requirements simply by purchasing fee-based 'Web services' from third parties—similar to the way they currently buy electric power or telecommunications services.”
This was three years before the launch of Amazon AWS and seven before Microsoft CEO Steve Ballmer declared “This is the bet for the company… For the cloud, we're all in.”
At the time, straddling the fence on the disruptive potential of the cloud was totally excusable — visionary even, some might say. Today, it’s ludicrous.
Across the board, the verdict is in: when it comes to the cloud, the stakes are too high to sit on the fence.
Consider this: according to recent findings by UBS, more than one in three cloud users report cost savings in excess of 40 percent by the second year of adoption, and nearly all cloud users reported savings of more than 20 percent by year two.
And that’s just the cost savings. Beyond the economics of the cloud, it’s a matter of competitiveness. In other words, making the most of what cloud has to offer has now become table stakes for companies competing in today’s markets.
To assess this, my company Apigee surveyed 800 IT decision makers in companies with more than $500 million in annual revenue and found that more than 80 percent agreed with the statement “the types of external resources available to IT have changed a lot over the past five years.”
We also used the performance of respondents’ companies when it came to delivering mobile apps — a must-do for every enterprise — as a benchmark to assess the impact of a taking wait-and-see approach versus making the most of new resources.
Additionally, we asked those who made use of external resources for supporting app delivery in the past year — ie. people, Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (Paas) or Backend-as-a-Service (BaaS) — to rate the degree of impact external resources had on cost, time and business value from negative 100 percent to plus 100 percent.
We divided respondents into three groups, based on other profile questions:
Those who rated strategic use of cloud as something “extremely relevant” to their company’s competitive position over the next five years (“Strategic Cloud Users”)
- Those who both rated cloud “extremely relevant” to their company’s competitive position and reported already adopting of IaaS and PaaS ahead of the average across all 800 companies (“Cloud Power Users”)
- And a composite of the two for the average.
The balance of risk and reward is stark. Compared to those who haven’t both embraced the cloud as strategic and taken action on it as they have, Cloud Power Users report between 1.6–2.4 times the benefit from external resources. They also report a dramatic reduction in external resources that turn out to be a liability.
It is tempting to resort to parody to illustrate reasons why, but a YouTube video of one team racing to stand up a physical server versus another making an AWS or Azure API call seems fitting. Entertaining as that might be though, it’s not so far from the truth when it comes to life-or-death issues for enterprise IT right now.
Ultimately, digital competitiveness requires acting like a software company. That means mastering continuous delivery, APIs and devops — which in turn means making the most of cloud. Michael Coté, someone I’ve known and respected since I began embracing cloud, and who is now at Pivotal, explained this well at Gartner’s Application Architecture, Development, and Integration Summit.
Likewise, in Geoffrey Moore’s seminal Crossing the Chasm, innovations reach the Late Majority at 50 percent penetration and the Laggards at 84 percent. The same UBS report referenced above states that today 65 percent of companies have some degree of IaaS and PaaS usage, which will rise to 90 percent within two years. In so many words: the time has come.
A decade ago, a full-on embrace of cloud may have been considered “skating to where the puck was going to be.” Today, anything but going “all in” is like skating toward where your grandfather’s memoirs say the puck might once have been.
The case for cloud is no longer a matter of “pro” vs “con.” It’s “pro” vs “comical.” So hop on the bus and start driving “cloud first” and “cloud native” practices in your organization, before it’s too late.
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