Much of the technology industry focuses on the “what” of cloud architectures and the “how” of implementation. So we are awash in acronyms like IaaS, Paas, SaaS - and more recently - APaaS, IPaaS and who knows what others. After all, a technology market has not reached maturity unless it has garnered a certain quota of acronyms. By that measure, cloud computing has certainly arrived!
But whatever the acronym, why should customers care about the cloud? Trillium’s go-to-market approach has focused on that motivation as a key element of why we do what we do in the cloud and why it matters to our customers. Our research has found that the motivation that prompts clients to consider cloud computing is really not focused on the minutia of deployment details or what kind of “aaS” Trillium Cloud is (it’s SaaS, by the way). Details do matter, but only after consideration of something more basic - “what’s in it for me?”
And part of that answer involves trying to have some perspective, recognizing that there is a significant shift happening within the computing landscape that is reflective of the changing roles of hardware and software and a certain maturation of decision-making. In May of 2003 Nicholas Carr famously argued in in the Harvard Business Review that “IT doesn’t matter” [as a source of competitive advantage]. The headline was provocative and controversial, but the reasoning was thoughtful and worthy of consideration. His premise was that spending on technology should offer the possibility of providing some kind of competitive advantage in business. But if everybody is doing it (spending on technology), then it is hard to argue that it offers much competitive advantage. Yes, you can achieve some differentiation in terms of how you spend your IT dollars, but it’s in the margins.
Yet, as I noted in my prior post, enterprises allocate considerable amounts of their technology budget to things that do not offer competitive advantage and – if that is true – they are spending on things that do not matter. Infrastructure is important, no doubt, but it is not really a foundation for differentiation. What company’s 10K outlines their technology spending and highlights the middleware investments and their new server architecture? Who goes to a cocktail party and talks about their new message-oriented middleware? Who has a mid-life crisis and goes out and buys a shiny new red database server? If you do, you need to get a life.
With that in mind, I suggest that we stop looking at cloud computing as a dramatic disruptive technology upheaval and rather look at it as a form of prioritization of IT spending on areas where the enterprise can get competitive advantage. Cloud computing is a mechanism for outsourcing technology spending that does not, of and by itself, convey competitive advantage. Rather than spending 75% of your technology dollars on things that “do not matter”, take advantage of the economies of scale that a cloud provider can offer. Rather than learn an aspect of technology that is not central to your go-to-market strategy, leverage the expertise of an organization that focuses in that area and can apply it to your business. Focus on what you do well, let others take on the rest.
Outsourcing is a natural mode of operation. Technology markets tend to look at it as disruptive or novel, but we outsource things in our personal lives all the time. In the modern world (unless you have gone off the grid) you are likely to be outsourcing things every day, but you just don’t call it that. We purchase our clothes, often our food, our transportation and so many other things rather than provide for ourselves in a self-sufficient manner. You are outsourcing those things. The whole premise of currency is to facilitate the exchange of goods and services – so that you can outsource activities to others.
Cloud computing is a logical extension to an outsourcing approach, one that should be embraced by both the line-of-business and internal IT. Cloud computing allows the organization to delegate responsibility for things that are better done elsewhere and focus on the areas that will convey competitive advantage. And it allows the organization to leverage expertise that itself can provide competitive advantage and do it in a financially attractive way. It is the natural order of things. And for many organizations, it’s time to get on board.