In September, the Australian Government Information Management Office (AGIMO) released its guide to implementing cloud services, and recommended that government agencies should identify the ‘trigger points’ that present opportunities for a move to cloud-based services. Freya Purnell spoke to Mark McWilliams, director of Datacom, which was recently been selected for the AGIMO Cloud Panel, about what those triggers points are for both public and private sector organisations.
According to Mark McWilliams, cloud adoption has been quite slow because it has tended to be positioned as a technology substitution, and with many Australia organisations already taking advantage of the benefits of virtualisation, the advantages cloud presents are not immediately clear.
However McWilliams believes that as we move into the age of the ‘Internet of Everything’, this is a lost opportunity. To truly leverage the cloud commercial model, we need to see beyond the well-publicised benefits of lower price, flexibility and standardisation.
“New business models are really driving disruptive products into previously stable sectors, and where IT departments used to be viewed as a real cost or a tax on the business, in this digital age, we really need to be viewing information and technology as the foundation of our competitive advantage,” McWilliams said.
He identified four ‘trigger points’ that could mean cloud brings great value to the organisation.
1. New business models
With cloud technology enabling some innovative and potentially disruptive business models, as we are seeing with web-based businesses such as Airbnb and Kickstarter, businesses should look at their own markets for both opportunities and threats that could be presented by this technology.
“Could a competitor take away massive chunks of your market by deploying a new digital way of doing things? With these new consumption-based cloud models, highly functional mass-market solutions can just take off,” McWilliams said. “Businesses need to think about what is going to drive the revenue of the future, and where their competitive threat is going to come from. Cloud is just the foundation enabler for this.
2. Driving business improvements
The next opportunity comes from looking internally for obvious areas which could benefit from an efficiency overhaul.
“Are you able to drive improvements in your business and become more effective and efficient than your competitors? This affects your ability to price the market,” McWilliams said. “The cloud obviously helps a lot with that because you’re able to roll out new ways of doing things – new systems, new tools, technologies – very rapidly because you’re not having to wait to implement new solutions and infrastructure the same way that you used to.”
3. Actually using big data
Big data is the talk of the town, and with the exponential growth in the number of ‘things’ – devices, sensors and so on – connected to the internet, we’re seeing a corresponding explosion in data volumes.
The challenge for business is not big data collection and storage for its own sake, but actually using it to drive customer value.
“Would your business be more successful if you could understand the data that you create from potentially thousands of sensors in your business? Cloud helps with that, because the economies of scale that cloud providers can deliver means you can be storing many terabytes or even petabytes of information very cost-effectively,” said McWilliams. “You have to consider how you actually bring the net volume of data into a product that you can either offer to attract new people or you can sell and drive revenue from. Big data is the term that’s applied to it, but cloud is the foundation of being able to really make use of this.”
4. Meeting the challenges of consumerisation of IT
BYOD, widespread app usage and the proliferation of cloud stage available to consumers has shifted the goalposts on what they expect from IT.
“People expect modern, flexible, powerful functional tools to be available in real time. Your ability to attract and retain talent in your business will be dependent on your ability to be flexible with your infrastructure,” McWilliams said, adding that the flexibility of cloud does make decisions about deploying new technology easier.
“I think that’s why we’re seeing a move away from monolithic software and hardware deals, where organisations have to tie themselves into long depreciation cycles that inhibit future choices. With cloud-enabled businesses, it’s a two-year commitment, and if I want to walk away, it’s going to be pretty easy.”
These four areas of opportunity should therefore be considered carefully in the context of what cloud can bring to the table, rather than just moving in-house technology directly to the cloud as part of a technology refresh.
“Why wouldn’t you take the opportunity to look at what businesses they’re supporting and what threats are coming into the business as a consequence of the digital age. If I just pick that stuff up and move it, am I allowing our competitors to bring a new product to market that we’re not even thinking about?,” McWilliams said. “Some people are just ticking the box and that’s a real shame when they could take it so much further.
This article was originally published in Inside SAP magazine Summer edition
