Great article by David Linthicum in InfoWorld last week: Cloud providers aren't selling the real value of the cloud. The key point is that the big, overarching benefit of the cloud is not cost savings or efficiency gains but adaptability—as he put it, “the ability to quickly align with changing requirements.”
I completely agree that adaptability is the core value of the cloud. But let's take a closer look at what “adaptability” actually means, because it's easy to miss some of the hidden opportunities underlying that broad term.
Adaptability is the ability to meet the fast-changing requirements of your customers, so you can continue to serve them when, where and how they want to be served -- faster and more effectively than your competitors.
Yes, the cloud provides elasticity, so you can scale resources up and down as needed. It can help you streamline operations or even offload certain business functions, so you can focus on core competencies. It can help you deploy new software-based services painlessly. And yes, all of that helps you adapt to changing customer requirements.
But what most companies still haven't noticed is that the cloud makes it possible to innovate, to__ improve the customer experience_, and to __engage with customers_ and at an absolutely unprecedented level. I suggest that the value of those capabilities outweighs the other, more obvious benefits by an order of magnitude.
Consider the cloud's advantage for innovation. With the cloud, you can test every idea quickly. Bad ideas fail faster, good ideas come to light sooner. The ability to experiment inspires creativity, so you have more and better ideas to work with. That means you can accelerate the process of meeting evolving customer needs--and get great ideas to market faster.
For example, the cloud is perfect for enabling mobile innovation. You can prototype fast. You can try a variety of ideas and separate the winners from the losers quickly. You can do promotions, try out new apps, and know what's working right away -- and you can handle traffic spikes when you have a hit. It's a very dynamic way to test, iterate and refine. For more perspective about innovation, read the recent article in Forbes by our CEO, John Dillon: http://www.forbes.com/sites/ciocentral/2012/04/30/how-you-can-use-the-cloud-for-rapid-fire-innovation/
The cloud also changes the economics of improving the customer experience and customer engagement. With the cloud, it is now practical to create, deploy and track services or campaigns or promotions that truly engage consumers and allow them to experience your products on a deeper, more personal level. You get closer to your customers, partners and employees, and you can adapt to their tastes, preferences and opinions faster.
Also, cloud-based offerings such as Platform as a Service (PaaS) give you access to new tools and technologies without having to acquire and maintain them, so you focus on meeting the needs of customers, not updating software stacks.
While savings and efficiency will always be a part of your evaluation, don't let them obscure the greater value of the cloud. Take a closer look at the opportunities the cloud presents for improving your company's adaptability.