A case for the cloud: The business impact of the cloud, with skyline and tall buildings in background

A case for the cloud: The business impact of the cloud

Companies moving most aggressively to adopt cloud computing are being met with reward in growth and expansion 

Since the cloud’s emergence in the early 2000s, business leaders have been inundated with messaging, all emphasizing the multiple cloud computing benefits—cost reductions, security, improvements to operations and employee productivity are among them.  These inherent advantages are well known, but what is less discussed is the cloud’s effect on a company’s external success with initiatives like new product launches or expansion. We could attempt to confirm this from a simple perspective by implying internal factors can contribute to an organization’s market success. But for most executives, this isn’t compelling enough, leaving them to ask, “Will the cloud lead to business growth?”

The simple answer: yes.

But one condition demonstrates just how much.

The more a user extensively utilizes the cloud, the more likely it is that their business will experience a variety of new business initiatives. More detail comes from Harvard Business Review Analytic Services, which shows cloud leaders—companies that use the cloud in all relevant aspects of their business—are significantly more likely to have launched new products, expanded into new markets and entered into new business than companies that take a more ad hoc approach.[1] This isn’t to say that cloud novices and followers won’t experience an increase in business growth (because they do), but fully cloud operational enterprises are at least ten times more likely to do so across the board. [Figure 1]

 

[Figure 1]

BEYOND TRADITIONAL USAGE

Cloud leaders have been able to reap these business advancement rewards by seeing beyond the usual cloud capabilities of CRM, email and file storage, driving them to use the cloud for more fundamental business dealings such as procurement, billing and supply chain.[2] [Figure 2] These leaders have revolutionized the IT approach by using the cloud on a larger scale, which has since led to better business processes and given their companies a stronger competitive advantage. On the other hand, businesses who are not aggressively cloud computing have yet to recognize the cloud’s full potential. A study from The Economist Intelligence Unit and IBM reports, “Although cloud is widely recognized as a technology game changer, its potential for driving business innovation remains virtually untapped.” When novices begin to maximize their cloud usage, research shows that they will begin to feel the cloud’s power to generate new business within the first three years.[2]

[Figure 2]

THE FORCE OF BUSINESS AGILITY

In the early years of cloud computing, most business leaders were persuaded by cost to deploy cloud services. Now, business agility—which is a company’s ability to readily respond to changing markets—is the driving force for cloud implementation.[4] And according to numerous studies, the cloud has achieved this expectation. The “Cloud Computing Comes of Age” report states 64% of organizations have experienced a significant increase in business agility since utilizing the cloud.[5] This trait is critical to achieve key business outcomes and meet consumer demand, and use of the cloud has resulted in some very tangible outcomes, especially among cloud leaders. According to Harvard Business Review’s report, “Business Agility in the Cloud, “Cloud leaders are more likely to have entered a new market (49 percent compared with 35 percent of moderates and 36 percent of cautious) or to have been part of a merger or acquisition (49 percent versus 29 percent and 31 percent.)” [6]

The case is clear: the value of cloud computing stretches far beyond the typical benefits of cost savings and employee collaboration. It is also a leading force for business growth, especially among companies who deploy the cloud more aggressively and use it in a variety of core business functions. With these leaders recognizing the cloud’s potential, their corporations have since launched new products, experienced expansion and improved their overall business agility. Today, the cloud is no longer an innovative add-on; it is a strategic move for companies to adapt to ever-changing markets and flourish in their industries.

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[1] “Cloud Computing Comes of Age.” A Harvard Business Review Analytic Services Report, 2015, https://hbr.org/resources/pdfs/comm/oracle/19128_ HBR_Oracle_Report_webview.pdf 

[2] “Cloud Computing Comes of Age.” A Harvard Business Review Analytic Services Report, 2015, https://hbr.org/resources/pdfs/comm/oracle/19128_ HBR_Oracle_Report_webview.pdf

[3] “Cloud Computing Comes of Age.” A Harvard Business Review Analytic Services Report, 2015, https://hbr.org/resources/pdfs/comm/oracle/19128_ HBR_Oracle_Report_webview.pdf

[4] Olavsrud, Thor. “Business Agility Drives Cloud Adoption” CIO from IDG, 18 July. 2017 http://www.cio.com/article/2455960/cloud-computing/cloud-computing-business-agility-drives-cloud-adoption.html

[5] “Cloud Computing Comes of Age.” A Harvard Business Review Analytic Services Report, 2015, https://hbr.org/resources/pdfs/comm/oracle/19128_ HBR_Oracle_Report_webview.pdf

[6] “Business Agility in the Cloud.” A Harvard Business Review Analytic Services Report, 2014, https://hbr.org/resources/pdfs/tools/Verizon_Report_June2014.pdf