THE POWER OF CLOUD
How Cloud Enables Enterprise Innovation
Cloud has made it easier for entrepreneurs to innovate digitally; armed with a credit card and an idea, they can rent resources and can source even very advanced capabilities – such as cognitive computing – from the same cloud. By removing barriers to entry, cloud has enabled a Cambrian Explosion of startups. We can see this in our own region where there are emergent startup ecosystems appearing in many cities, enabled—in large part—by cloud.
Whilst benefiting startups, these shifts simultaneously pose a threat and opportunity to enterprises. New entrants are disrupting incumbents and taking shares from existing market players by delivering services and experiences on users’ own terms, and they are leveraging new technologies, delivered from the cloud, to do this. However, enterprises can also take advantage of the same technologies to disrupt, innovate, and take shares from their competitors. Cloud has made innovation the basis on which companies of all sizes now compete.
The banking industry is one of several industries that have found themselves assailed by new entrants offering innovative approaches to services, such as payments or lending. Much of this has happened by taking the bank’s services and unbundling them into “apps.” As
Heather Cox, Chief Marketing Officer at Citi, noted at IBM’S Interconnect conference this year, people need banking but they don’t necessarily need banks.
This same pattern is replicated across industries. For example, whereas people need telecommunication services, they don’t necessarily need telcos. And as Uber is demonstrating globally, we may need transportation services but do we really need taxi companies?
Rather than face death by a thousand digital cuts, enterprises have an opportunity to transform. It is a fallacy to assume that enterprises are destined to always be disadvantaged when competing with nimble startups that are unencumbered by organizational complexity and technical debt. On the contrary, enterprises have tremendous amounts of data, applications, and services that, although hidden behind the firewall, represent untapped opportunity. They should look to unlock this value and, leveraging mobile, analytics, and cloud, deliver it to end users in a way that is engaging.
By doing so, they can capture new markets and maintain their foothold in existing ones. They must focus singularly on delivering value and experiences on their users’ terms; they must focus only on what delivers differentiation.
With much of this value delivered via apps, developers play a fundamental role in how enterprises transform and address these new opportunities. Just as they need to unleash their data and applications, enterprises must unleash the innovative power of their technical community. This means giving developers more technical freedom; something that can be anathema to the culture in many corporate IT environments but critical if enterprises want to compete in this new world.
It also means recognizing that if an enterprise just looks to the developers sitting behind their own walls, they are missing out; instead, enterprises need to look at how they can marshal the creative energies and talents of external developer communities. This is especially true in the Middle East where we see youthful tech savvy populations developing nascent startup ecosystems in cities such as Riyadh, Cairo, Amman, and Beirut.
Enterprises can do this by making their data, applications, and services available to the public as APIS and running initiatives to promote use of these APIS to create new apps or incorporate into existing ones. For example, Citi is working with IBM to run a global competition, called Citi Mobile Challenge, in which external developers compete to develop the most innovative apps, leveraging Citi, IBM, and third party APIS. The best apps selected will move to production. NASA is taking a similar approach with the Virtual Space App Challenge, which aims to create apps that contribute to space exploration. Think of it as crowdsourcing innovation.
To do this, we believe enterprises need a platform for digital innovation. This platform, delivered from the cloud (Platform as a Service or Paas) provides an environment wherein the developer can just focus on the code and the data, with everything else, such as runtimes, databases, and supporting services, provided by the cloud. Focus on what differentiates and rent the rest.
Speed is critical: digital competitiveness is now a function of how fast someone can deploy code, measure results, learn from the market, and factor into the next deployment. Paas allows enterprises to accelerate to the point where new apps can be deployed in seconds. This makes it possible to deliver new functionality – to address new market opportunities – more rapidly than in the world of traditional IT where release cycles can take weeks or months.
In conclusion, the right Paas gives enterprises the opportunity to start thinking and acting like startups – at startup speed. It can help them innovate to address new opportunities and new markets and deliver new value in new ways. Developers can rapidly test ideas, deploy code, and get feedback to evolve. It can be game changing.
The benefits become more profound when the platform is extended to external developers; now, instead of fearing the lone developer sitting in a cafe, enterprises have the opportunity to marshal this same creativity. The next disruptive app may still be born on this developer’s laptop. But, by providing this developer with APIS, a platform, and an incentive, the enterprise can shift from being a passive victim of these disruptive forces to being a major beneficiary of them.
“Cloud has made innovation the basis on which companies of all sizes now compete.”