#36-Cloud Service Providers: The Potential to be the NEXT Big Disruptors?
Cloud Providers have the opportunity to Disrupt Few Industries
Cloud companies are DESIGNING solutions that are relevant to every industry and then packaging them as customized products.
Ecosystems-First Strategy- They are emerging as the one-stop solution for all Business requirements
- Consulting- The future of consulting is digital strategy and execution. Cloud companies with the kind of talent and resources (B2B order book) can afford to invest heavily in building consulting capabilities
- System Integrators and IT Software- Cloud companies are simplifying the process of system integration. The migration to the cloud ensured that systems become interoperable and over-reliance on complex IT software is reduced.
- Server Industry- Dell and HPE will face a constant threat from cloud providers and white-label servers (storage/computation) providers
- Enterprise Tech- Zoom will always need an external Cloud partner. Microsoft teams can easily be powered by Azure. Salesforce recently announced plans to acquire Slack to complete the enterprise tech ecosystem
- Telco- They are disrupting the B2B business of telcos. Most businesses prefer to get business connectivity solutions solved by their CSP’s.
Most in-house Data Centers for businesses (both large incumbents and start ups) are now migrating to CLOUD-FIRST models
IDG’s 2020 Cloud Computing research survey found that cloud computing is embedded into business strategy, as 92% of the organizations say their IT environment (infrastructure, applications, data analytics, etc.) is in the cloud to some extent today, and this is expected to grow to 95% 18 months ie, 2021–2022.
Why the CLOUD? Companies that have a Digital Transformation Agenda will need Cloud
- Cost-effective and on-demand-Pay as you go model (metered/usage-based)
- Agile, open, and flexible- Unlimited storage and computational power
- Reliable-99% uptime compared to on-premise data centers if you are willing to pay for it
- Secure- Reputed CSP’s -services and data centers have multiple layers of operational and physical security to ensure the integrity and safety of the client’s data
- Complex IT infrastructure for every business solution- Applications Hosting, Websites, Back-Up and Storage, Enterprise IT, Content Delivery, Databases
Clouds are taking over all the industries, with unique applications
There is barely an industry that does not use the cloud for storage and computational requirements. Some of them use the cloud platform from multiple service providers.
- Check Microsoft AZURE Case Studies- LINK
2. AWS Cloud Case Studies- LINK
Eventually, almost all businesses that need some digital transformation, or direct customer interaction, will move to the cloud. There will be few minor exceptions of the classified government and private organization due to matters of national security, data privacy, and cybersecurity.
Who all are leading the ‘CLOUD-PARTY?’?
Before the cloud tech mass adoption or migration, storage, computation, and data analytics were on-premise (owned data-center).
Dell and HPE were the market leaders in servers (still great companies as they are adapting and innovating very quickly). Yet, the Big Tech led by AWS, Microsoft Azure, is aggressively coming after the cloud opportunity. Google Cloud, Alibaba, IBM, Salesforce, Oracle, and Tencent are also aiming for their pie of the cloud.
They are all strong, competent, and aggressive cloud service providers.
“We are the only company with an integrated, modern technology stack — powered by cloud and AI and underpinned by security and compliance — to help every organization transform and reimagine how they meet customer needs.” “Our commercial cloud surpassed $50 billion in annual revenue for the first time this year. And this quarter our Commercial bookings were better than expected, growing 12% year-over-year,” said Amy Hood, executive vice president, and chief financial officer of Microsoft.
In Gartner’s first vendor evaluation covering both cloud infrastructure and platform services (IaaS & PaaS, or “CIPS”), AWS is evaluated as a Leader with the highest score in both axes of measurement, Ability to Execute and Completeness of Vision.
The world’s most successful start-up incubated by a parent company according to me is AWS (Amazon Web Services).
It is deservingly referred to as the ‘crown-jewel’ of the Amazon ecosystem and contributes nearly 60% of the entire Amazon Group profitability numbers, and about 12% of groups revenues (Q22020)
How the CIO’s, CTO’s and CDO’s make the most of cloud investment?
To optimize value from cloud platforms have a clear strategy :
- Higher margins-Think of business functions/domains where the cloud can lead to revenue growth and higher margins. Quick launch of an application and managing the reputation of up-time, the customer experience(e-commerce, mobility)
- Selecting the right CSP- Right Cloud Partner and technology that goes well with business growth strategy and risk factors (financial services data privacy/GDPR guidelines)
- Design the operating model — types of cloud computing IAAS, PAAS, SAAS. One/Multiple CSP’s and how to ensure that the business model is not disrupted by the CSP’s. Leverage “cloud bursting” (using a combination of private and public cloud hosting to manage peaks of demand)
- Use your Cloud-based business as a strategy, a product, or a platform that can be monetized, rather than just traditional IT cost. Alternatively, attack the IT/Backend/on-premise costs that are eating your margins with a proactive cloud strategy
What are the BIG disruptor moves for the Cloud Companies?
- Management consultants in Team-Build the ‘Star Sales’ Army who is also business and management consultants
- Digital Maturity Models-Know and build the Digital Maturity Model for every industry. Design client solutions according to the playbook.
- Unique industry solutions-Further, carve out solutions that are customized to the industry. Keep the cost advantage intact.
- Solve the pain points across the entire value chain of the industry- retail, FS, manufacturing, e-commerce, gaming, agri-tech
- Ecosystem Partnerships-Have the partners in place for what you cannot provide. Be the experts and broadcast the used-cases
- Contribute to Revenue and Growth Agenda- Bring money/newer revenue streams for the client’s digital business model rather than just being a Vendor.
- Data Monetization models-Enable clients to build and monetize data on their platforms ethically
- One-Stop Solution- Emerge as the one-stop solution for all business transformation needs for the CIO/CTO of the client. Be the digital transformation advisor for your client.
Sidhartha Sharma (personal views)
Digital Strategy and Platform expert
