Cloud Computing: Are You Ready for Co-Creation?

CIO — I saw a fascinating interview on Forbes.com last week that implies the death of IT as we know it. In it, Michael Chui, senior fellow at the McKinsey Global Institute, described a trend that his firm views as the way IT will be done in the future.

Chui uses the term distributed co-creation, which is companies working with external parties, both individuals and other companies, to cooperatively create new business offerings.

Chui is quoted: "Co-creation and collaboration allow you to extend your enterprise through geographical boundaries" and then goes on to say:

"We have talked about the power of orchestration vs. ownership of specific assets, employees or intellectual property. Increasingly we're seeing companies create competitive advantage with a network or ecosystem and orchestrate activity to capture value."

Chui also describes how companies are gathering much more data about these cooperative ventures and running analytics to understand how to create more value from the overall offering as well as their piece of the solution; in fact, he uses a term coming into vogue, "big data," to characterize this element of co-creation.

Turning to the role of the IT organization itself, Chui says:

"The IT organizations that are partners with the rest of the business, and which are taking these ideas and getting ahead of the game, are going to be profit drivers for those companies or organizations. Those IT organizations that confine themselves to traditional IT--servers, desktops and maybe mobile phones--will miss out on the application of these trends, and they might find themselves replaced by outside providers that are in the business of leveraging these trends."

This last point echoes an interview with Gartner VP Mark McDonald that I discussed in last week's post in which he made the same point: IT organizations that focus on efficiency are likely to be displaced by less-expensive external providers, while those that concentrate on building offerings that are part of their company's core offerings will prosper. This latter point, by the way, is not the same as the commonly-presented "partnering with business units," which is supposed to ensure that IT delivers what the business unit wants—too often, that results in better efficiency in rolling out standard apps. Instead, what this means is that IT must implement these kinds of co-creation capabilities.

The implications of the future were limned for me in a discussion I had this week with Tom Lounibos, CEO of SOASTA. SOASTA is a cloud-based testing and monitoring service used by companies to ensure their systems can respond to large and unpredictable loads. For example, Denny's used SOASTA's service to ensure their website could handle the 59 million (!) visits it received after it ran a Superbowl commercial offering a free breakfast.

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