Is The Cloud Losing Competitive Advantage?

by CXOtoday News Desk    Aug 17, 2015


The cloud no longer offers a strategic advantage to businesses because of its universal adoption. The reason is, cloud vendors are so aggresively pushing cloud technology that businesses are finding that it no longer offers them a competitive advantage. That’s one of the conclusions found in a survey of 452 business and IT managers conducted by the Harvard Business Review Analytics Services. The report found that only 16% of those surveyed saw a competitive advantage, compared to 30% in the previous year.

According to the report sponsored by Verizon Enterprise Solutions, the ability to adapt quickly is less of an advantage when everyone can do it. However, businesses are realizing not adopting cloud would have dire consequences, one respondent warned: “Cloud is no longer a differentiator. However, not being on it would be a significant disadvantage.”

Harvard Business Review analytics author, Angelia Herrin explains, “The prime benefits of cloud are impressive, with 40% of respondents claiming that using cloud has increased revenue, and 36% say it has increased profit margins.”

Herrin believes, advantage in the future will come from how well cloud is managed and to what extent companies can use it to decrease friction in all of their business activities. “To maintain a competitive advantage, organizations need to “develop a more strategic approach to cloud adoption, management, and use,” she mentions in the report.

That’s because experts believe organizations have moved beyond sales force automation and other simple cloud tasks and deeper into their software infrastructure operations, including supply chain management. Eight-four percent of the survey respondents reported increasing their use of cloud. This is perhaps somewhat surprising, given the historical reluctance of companies to trust cloud with the most mission critical operations.

According to the report, there is a strategic shift in what part of organisations are making cloud purchases. Instead of line-of-business going around IT, it is the IT that is making 43% of purchases.

Advantage in the future will stem from effectiveness of adoption and management, the amount of collaboration realized as a result of it, and achieving speed to market. “Success will depend on how well organizations manage not only their use of cloud but also the changes required in skills, processes, business models and relationships — both inside and outside the traditional enterprise walls,” Herrin states.

The 452 organizations surveyed included 32% of 10,000 employees or more and 31% with 1,000 to 10,000 employees. Thirty-seven percent of company locations were in North America, 25% in the Asia/Pacific region, 19% in Europe, and 12% in Latin America.