Keeping ahead in a highly disruptive marketplace
David Gildeh, director of Cloud Services for Alfresco, looks at cloud IT and the marketplace.
Cloud is now hitting the mainstream market; cloud has officially crossed the chasm from early adopters to mainstream customers, with some of the largest companies making strategic investments into the cloud. For the past few years, potential cost savings drove this adoption, particularly after the 2008 financial crisis. CIOs were being asked to do more with less, and the cloud saw an acceleration of adoption as enterprises started cutting costs on running on-premise systems and data centers by switching to the cloud.
However, while Total Cost of Ownership is still an important concern for CIOs, the real driver is agility in the face of competition. It’s a well-known fact that a nexus of technology forces are coming together and enabling companies to create new innovations at a faster rate than ever before. Companies that barely existed five years ago are disrupting the incumbents at an unprecedented rate, taking advantage of new technology and the agility of being a small nimble company. It’s this agility that larger enterprises will need to enable in order to stay competitive in today’s marketplace, and this will drive significant changes throughout all areas of the enterprise, particularly IT.
You see, in the 20th century, most enterprises were built for efficiency – to deliver goods and services faster and cheaper than competitors. This drive saw enterprises shift their manufacturing to the Far East, outsource departments and processes to lower cost regions, and drive IT projects that promised to deliver cost savings and productivity throughout the organization.
However a new breed of companies is emerging, the start-ups of today, which are leveraging the cloud and technology to build smaller, more agile enterprises that are disrupting the incumbents. No start-up today would consider building their own data centers, or using rigid on-premise systems to run their business. Without the weight of all this infrastructure to hold them back, this new breed of companies can execute and pivot faster to meet the needs of the marketplace and their own business users.
IT will shift from spending 80 percent of its resources on just running and maintaining expensive and rigid on-premise systems like they do today, to spending 80 percent of their resources delivering real differentiated innovations and solutions to help the enterprise compete effectively in the marketplace. IT will play a strategic role as software eats the world.
Already an internal ‘war’ is waging between the business and IT. Line of business execs are able to provision their own solutions in the cloud without IT getting involved, but IT departments still need to worry about security and compliance concerns. However the business needs to move as fast at the market and CIOs will be driven to meet the needs of the business faster than ever before. This will mean letting go of outdated models and systems to provision IT solutions, and figuring out pragmatic ways to address their security and compliance concerns while leveraging the cloud.
The good news is many cloud enterprise vendors are focused on helping IT address their concerns, while providing the solutions business users need today. The shift may take several years, and hybrid cloud will likely be the strategic stepping stone towards cloud for many larger organizations today, but the end point is inevitable. Cloud is here to stay and will become the defacto model to help enterprises maintain the agility they need to compete in a highly disruptive marketplace.