How Cloud Computing Promotes Business Growth

For Coty, IHG, Synaptics and Lojas Renner, using cloud computing is a key part of a strategy to expand business operations and increase profits.

By Stephanie Overby
Mon, April 11, 2011

CIO — Coty is growing.

Last fall, perfume giant Coty purchased cosmetics companies OPI and Philosophy, acquired a brand out of Germany, bought the sixth-largest makeup manufacturer in China and signed Lady Gaga to develop a signature fragrance.

“We’re on a serious growth incline,” says Coty Global Director of Information Management Carmen Malangone. “IT is expected to roll with the punches and perform.”

InterContinental Hotels Group (IHG) (IHG) is growing.

In 2010 IHG opened 259 hotels and relaunched its Holiday Inn brand. Five years ago, to support that growth, Bryson Koehler, IHG’s senior vice president of global revenue and guest technology, would have been purchasing servers, building software and retooling custom business processes. Today, he says, “I don’t want to go into the data-center-building business.” Or the software business. Or the business-process-assembly business.

Lojas Renner is growing.

Brazil’s second-largest department store chain, Lojas Renner plans to double in size in the next five years. “We’re growing faster than ever, and I could not afford to have the same lead times I had before to grow the infrastructure, expertise and teams,” says CIO Leandro Balbinot.

Synaptics (SYNA) is growing.

A touch screens and track pads maker, Synaptics has been growing 25 percent a year for the last three years. “Our objective is to stay in front of the market, so we have to put more and more money into engineering,” says Senior Director of Information Systems David Riley. “We can’t put all that money into IT.”

Do you sense a theme?

All these businesses need to put time and money into growth; they don’t want to invest time or money in IT. And that’s why these companies—each in its own way—are turning to the cloud. (For expert advice about cloud-vendor contracts, see "How the Cloud Can Turn Toxic.")

A New Value Proposition for IT

While cloud computing adoption has been swift among startups and small-to-midsize businesses with little or no legacy IT operations, larger enterprises have been slower to adopt cloud-related services. Selecting the right providers and services is a gamble when products, pricing and performance change daily. Also, companies that have large capital investments in custom software or infrastructure can find it difficult to make a case for scrapping it all. Then there are the issues of integration, standardization, security and control.

But when the time is right, the cloud can be the way to grow, no matter the size of the enterprise. Not only can software as a service (SaaS), infrastructure as a service (IaaS), and platform as a service (PaaS) be fast and relatively cheap enablers of corporate growth, they can enable IT groups to serve the expanding enterprise more strategically. “From a corporate growth standpoint,” says Mark White, CTO of Deloitte Consulting’s technology practice, “it frees up time for IT to spend on improvement and innovation.”

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