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The power of cloud


Driving business model innovation

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Although cloud is widely recognized as a technology game changer, its potential for driving business innovation remains virtually untapped. Indeed, cloud has the power to fundamentally shift competitive landscapes by providing a new platform for creating and delivering business value. To take advantage of cloud’s potential to transform internal operations, customer relationships and industry value chains, organizations need to determine how best to employ cloud-enabled business models that promote sustainable competitive advantage.

Cloud has already changed both business and everyday life – from consumers who perhaps unknowingly use it to access their favorite music to companies that purposely harness its powerful resources. While much activity and buzz relating to cloud involves its technological capabilities, the benefits of cloud adoption actually extend into the business realm.

When utilized effectively, cloud capabilities offer numerous opportunities to drive business innovation. Recent technology and social connectivity trends have created a perfect storm of opportunity for companies to embrace the power of cloud to optimize, innovate and disrupt business models.

To more clearly determine how organizations use cloud today and how they plan to employ its power in the future, we surveyed, in conjunction with the Economist Intelligence Unit, 572 business and technology executives across the globe. Our research suggests that while cloud is widely recognized as an important technology, relatively few organizations today actively embrace it to drive business model innovation. However, our survey also indicates this will change dramatically in the next few years, with more and more organizations looking to cloud to drive new business and transform industries.

Through our research, we also identified some game-changing business enablers powered by cloud. Organizations are exploiting these business enablers to drive innovation that extends well beyond IT and into the boardroom. Our analysis reveals that some organizations are harnessing cloud to transform both product and service development and recast customer relationships.

 

We observed three business archetypes, representing the extent to which organizations use cloud to impact company and industry value chains, and customer value propositions:

Optimizers use cloud to incrementally enhance their customer value propositions while improving their organization’s efficiency.

Innovators significantly improve customer value through cloud adoption, resulting in new revenue streams or even changing their role within an existing industry ecosystem.

Disruptors rely on cloud to create radically different value propositions, as well as generate new customer needs and segments – and even new industry value chains.

Whether companies choose to become optimizers, innovators or disruptors depends on a variety of factors, including how much risk they are willing to assume and their current compet-itive landscape. We suggest business leaders carefully assess their organizations to determine which archetype they most closely match – as well as which one they aspire to in the future – and how they can leverage cloud to create new business models that promote long-term growth and profit


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Meet the authors

Saul Berman, PhD

Connect with author:


, Vice President and Chief Strategist


Lynn Kesterson-Townes, Global Cloud & Quantum Leader, IBM Institute for Business Value, Global Business Services

Anthony Marshall, Senior Research Director, IBM Institute for Business Value


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