19th April, 2017
4 Min read
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In recent years the cloud became much more than just a trending innovation, it became mainstream within the IT industry. Its benefits have overflown well beyond just technological innovation. In fact, cloud solutions enable businesses to rethink, optimize, innovate and disrupt. It opens the door for better and more efficient processes with positive impacts that go beyond just the digital realm. The cloud makes it easier to generate new business models and sustainable competitive advantages. With a constantly increasing number of businesses embracing the cloud, those that manage to harness the most out of it will come up on top.
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As said, there are numerous applications of cloud solutions for all kind of business goals. IBM researchers that were studying its adoption detected three main patterns of usage within a cloud-enabled business strategy. They studied and analyzed 572 companies and looked into how they were impacting the business ecosystem. The patterns segmented those companies into three major organizational archetypes:
- Optimizers
- Innovators
- Disruptors
Next we’ll dive a bit deeper into each of the subsets.
Optimizers
This specific archetype comprises those businesses that use the cloud to improve customer experiences and/or boost operational efficiency. Because of the cloud’s flexibility and scalability, optimizers tend to use it mostly for customer services. The cloud eliminates the usual risks related to new business models. It eliminates the infrastructural and development hassle that legacy businesses would face. Optimizers also leverage the flexibility of cloud computing to progressively test and launch new services. In terms of customer services, maintaining customer care centers usually came with huge attached costs. Also with fluctuating customer demands, effective optimization processes were hard to implement – a hassle that cloud computing alleviates or eliminates completely. Pay-as-you-go offerings enabled optimizers to implement scalable processes while minimizing the risk of overarching costs for unneeded services.
Optimizers focus on improving and expanding the value they are already providing with their products or services. While they do enhance customer experience and amplify delivery options, optimizers tend to achieve lower revenue and market results when compared to innovators or disruptors.
Example:
The North Carolina State University created its Virtual Computing Lab, a cloud-based solution to optimally assist students, faculty and researchers. Results:
- Increased flexibility to shift computing capacity between instructional, research and administrative needs
- The ability to scale up to match significant growth in university enrollment
- A chance to share resources with students throughout the state, improving education opportunities
Innovators
In simple words, the innovator archetype leverages cloud solutions to create new revenue streams. By bringing in new solutions, innovators upgrade and expand their role within an existing ecosystem and often tap into adjacent markets and industries. By doing so, they reinvent their value propositions and often generate a notable competitive advantage.
Cloud computing made it much easier to measure user needs and act on the gathered data, provide adequate services and offer them to consumers in an easy and user-friendly manner.
Example:
Netflix revolutionized video-on-demand and made its reputation by using scalable and interactive cloud platforms. Their platforms easily handle large peaks and valleys in data usage specific for the video-streaming industry. Results:
- Entrenched tech innovation into marketing
- Higher outputs with significantly less resources and manpower
- Innovative, fast and scalable services resulted in boosted revenue
Disruptors
The disruptor archetype from IBM’s Cloud Enablement Framework are all those companies that successfully leverage the cloud to form new markets. They manage to drastically reinvent customer experiences and ignite consumer desires. It all translates to the creation of completely new value chains by creating products or services that the users didn’t even know they needed. Disruptors take bigger risks in order to gain that “first-mover” advantage when creating a new market or by revolutionizing an existing industry. Cloud technology itself was a disruptive innovation. And now it’s just beginning to disrupt other adjacent industries.
It is hard to predict what will be the next market disruptor, but what is certain is the fact that disruptors are pushing legacy subjects to up their game and embrace the cutting edge of cloud technology if they want to avoid being pushed out of the market.
Example:
The Comcast Xcalibur project (later rebranded as X1 Platform) leveraged cloud architecture to deliver live TV services through IP technology to any Internet-connected device. Results:
- Meeting customer demands for easier access to TV and other Internet-enabled content
- Delivering content to more devices than before
- Creating new apps faster and more cheaply
- Making UI changes more quickly and easily
To Sum Up
It’s up to business leaders to properly assess their company’s needs and goals, evaluate the risks they’re willing to take but also take their respective competitive context into consideration. Only then it’s possible to determine which archetype they belong to or aspire to become. Once this strategic assessment is completed, businesses can move to leverage cloud technologies to generate business models to achieve growth and ultimately profit. Whether they choose to move as optimizers, innovators or disruptors, cloud technology will be the common denominator in achieving increased business value. If you need help determining your cloud strategies and needs, you can always talk to our experts here at GlobalDots. We will help you get the best value out of your cloud.