The real value of Cloud – its not what you think it is!

The real value of Cloud – its not what you think it is!

Over the last couple of years, as I spoke to various enterprise customers, the most common cloud use case that I heard was test/dev cloud. This is a great first step as enterprises become familiar with the technology. Most customers easily understand the top benefits of adopting cloud i.e. lower cost and increased IT agility. But one key advantage often ignored early on is the strategic value of adopting cloud to rapidly innovate and compete. True business innovation is achieved by delivering products and services quickly, gathering actual customer data and making incremental changes to proactively respond to customer needs.

In todays age, every company is a software company and companies that embrace this reality will emerge winners in the long run. It is true, that developing distributed software required to harness the benefits of cloud infrastructure is hard and cloud software expertise is difficult to find. But cloud leaders like Netflix, LinkedIn, Google and a few others have successfully overcome these challenges and invested in the right software architecture that allows them not only to grow and scale but also rapidly innovate and fail fast. A great example of this is how LinkedIn launched its Influencers platform in just six weeks! With a relatively small investment, LinkedIn could test an idea and ‘fail fast’ if it didn’t work out. For any company, having this option is priceless!

Startups know this all too well. The build-measure-learn cycle popularized by lean startup movement recommends companies to fail fast and fail cheap. To succeed though, in addition to applying lean startup concepts, companies need to focus on business model innovation and continuous delivery. For software oriented companies continuous delivery is now more a reality than ever before as a result of easy access to (relatively) cheap cloud infrastructure and tools to rapidly develop software.

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For larger enterprises though, it is a lot more difficult. After adopting virtualization, enterprises have been somewhat slower to adopt the level of automation necessary to truly deploy private clouds. But I think it is just a matter of time. Enterprises do have various public cloud options provided they are comfortable with security implications, if any. Even if infrastructure agility is achieved, software development will become the bottleneck for achieving rapid innovation cycle. Most custom software developed by enterprises is not cloud ready. Moreover the team structure and software development processes don’t facilitate continuous development and delivery. Most enterprises will find it tough to justify software development resources necessary to build a platform similar to the one LinkedIn has built. Their next best option would be to adopt open source technologies and piece together their own solutions or partner with a next generation cloud platform provider.

No matter which option they choose, enterprises should not risk ignoring the strategic benefits and options made available by cloud computing. Enterprises that realize this and move quickly will be well positioned to rapidly innovate around new products and services, uncover new opportunities potentially generating additional sources of revenue and build a huge competitive advantage just like Netflix, LinkedIn, Google did.

What challenges does your company face in adopting the lean startup methodology? What is your company’s strategy to innovate in the cloud?

— Ritesh Patel

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