The digital revolution that is transforming every aspect of our lives \u2014 work, learn, live or play \u2014 is being driven by the accelerating pace of innovation.\n\n\nDigitization \u2014 AKA digital disruption, digital transformation (DT), DX, Digital Cohesion or Industry 4.0 \u2014 is changing everything, and while tools like cloud, mobility, Internet of Things (IoT) and analytics are powering that transformation, it is innovation that will determine the winners and losers.\n\n\nOne of the many questions that must be answered by every organization is: Should innovation be entirely homegrown, i.e. do-it-yourself, or can some of it be outsourced to the public cloud?\n\n\nOver the last four years, the effective start of the cloud market \u2014 "a place to turn ideas into software faster," \u2014 widespread adoption has jumped from 10% of global companies to 33% this year, and it is expected to increase to 49% in 2017. Worldwide spending on public cloud services will exceed $195 billion in 2020, more than double 2016\u2019s $96.5 billion, and represent a compound annual growth rate (CAGR) of 20.4% over the 2015-2020 forecast period.\n\n\nThe importance of "innovation" spending has shot up as an IT category in recent years, from the eighth most important management concern in 2014, to fourth in 2015 to third this year. Cloud services account for just over 12% of an IT department's spending, and that's due to grow to 15% next year.\n\n\nBut how can cloud help fuel innovation? In simplistic terms a business can be divided into two components \u2014 run the business, and grow the business \u2014 and cloud can play a critical role in both aspects.\n\n\nLeveraging the cloud provides both business innovation and growth benefits, according to a recent study, in addition to savings in capital expenditures and staffing:\n\n\nA pay-as-you-go model allows organizations to avoid high fixed costs, and to be more aggressive in their growth strategies;\nIT staff can hand off maintenance activities, up to 80% of their workloads, and focus on innovation;\nMore flexibility to expand into new markets or diversify revenue streams through M&A;\nR&D staff can accelerate new product development with spinning up cloud resources on demand;\nFaster data analytics response to real-time business needs; and,\nBecause cloud is a \u201cmobile-first\u201d service, it lets applications run anywhere.\n\n\nEmbracing digitization \u2014 and cloud \u2014 can pay huge dividends in terms of speed to market, customer satisfaction and new business revenue. According to a recent survey, companies that embrace cloud are able to expand into new industries (76%), create new revenue sources (71%) and create new business models (69%).\n\n\nCompanies can expect to increase annual revenues by an average of 2.9% and reduce costs by an average of 3.6%, but \u2018first movers\u2019 who combine high investment levels with advanced digitization, are \u201calready gaining a nearly insurmountable advantage over competitors\u201d: both revenue gains of more than 30% and cost reduction of more than 30% at the same time.\n\n\nDigitization and innovation are team sports. IT must be much more collaborative across the business and organized in such a way to interact deeply with business process owners across the enterprise. This is both a cultural and organizational challenge, but cloud is playing a growing role in enabling these changes, while fueling innovation.