Cloud Computing – A Paradigm Shift Within the World of IT

The IBM Center for Applied Insights collaborated with Oxford Economics to survey 802 cloud decision makers and users, as well as business leaders of all stripes.

What they found is the following:

Over the next three years, cloud’s strategic importance to business users is expected to double from 34 percent to 72 percent.

So what’s behind this growing strategic interest in cloud?

Simply put, it’s an evolution. Cloud computing is following the same pattern of other technologies that have shaped business and society. Take electricity, for example. Even after the first public power supply lit the streets, it took time for businesses to learn how to really capitalize on this new technology. In those early days, people were enthralled by artificial lighting – one of the earliest applications of electricity. Very few could fathom the innumerable product innovations, business models and industries that would ultimately be built upon this technology.

Business leaders are working through this transition with cloud right now. For some time, many have benefited from early applications of cloud computing and the basic efficiency gained from IT delivered as a service. But now cloud is sparking imaginations. And more and more business leaders are recognizing its profound implications for how enterprises can make money, differentiate and compete.

What advantages are early Cloud Adopters seeing in a business context?

Cloud Pacesetters are outperforming – delivering, on average, higher revenue and gross profit growth than their peers.

To outperform, Pacesetters are building competitive advantage in three primary ways: – strategic reinvention – better decisions – deeper collaboration.

Knowing Your Customers

Pacesetters are more than twice as likely to use cloud to rein¬vent customer relationships. Cloud enables them to listen more broadly and dig through big data to learn customer preferences and deliver more relevant offers. Through cloud, they can also integrate processes and systems to serve custom¬ers better or engage them in new mobile or social ways that weren’t feasible before.

Driving Innovation

The majority of Pacesetters (52 percent) – and even Cloud Challengers (51 percent) – are also using cloud to innovate their products and services more rapidly. Not only can cloud accel¬erate the innovation process through stronger collaboration and improved workflow; it can also enable new functions or fea¬tures in the product itself.

Reinventing the Wheel

Most remarkably, more than half of the Pacesetters say they’ve revamped their business model through cloud. With access to more data and expertise – and fewer capacity constraints – organizations can more easily create new revenue streams, new value propositions and even brand new markets.

The Power of Connectedness

Leading organizations also recognize the power of connecting their data, the information scattered across segregated servers and employee hard drives. Compared to Chasers, they’re twice as likely to use cloud to share data across applications. Cloud helps knit data together to spur fresh insight and enable more-informed decisions.

Improved Integration

Leading organizations are also taking advantage of cloud-based collaboration to help eliminate silos – especially within their IT organization. They’re 74 percent more likely than Chasers to use cloud to improve integration between develop¬ment and operations. By breaking down these barriers, Pacesetters can implement new capabilities faster.