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.
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.
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.
Bryan Kirschner is Vice President, Strategy at DataStax. For more than 20 years he has helped large organizations build and execute strategy when they are seeking new ways forward and a future materially different from their past. He specializes in removing fear, uncertainty, and doubt from strategic decision-making through empirical data and market sensing.
In 2006, he was named the first Director of Open Source Strategy in the history of Microsoft. The company’s reorientation toward constructive engagement with Open Source developers, users and buyers drove significant advances in business results, engagement with customers, and standing with regulators. Later he was instrumental in a task force that resulted in then-CEO Steve Ballmer’s 2010 landmark speech declaring that Microsoft was “all in” on cloud computing.
Bryan founded the Apigee Institute in 2013, bringing Apigee customers, world-class experts, and groundbreaking research together to help enterprises accelerate digital transformation. Following the company’s acquisition by Google, he led research and strategy for Google Cloud Developer Relations and DevOps Platform.
A frequent speaker at industry events on digital transformation and platform strategy, he has cultivated strong relationships with leading academic researchers on these topics for over a decade.
He holds a Bachelor of Arts in Philosophy from Yale University and lives in Seattle, Washington.