It is late 1950 and you are an American fighter pilot in the skies of Korea flying one of the country’s hottest jets. Out of the blue, a wicked new adversary with sweptback wings and tail comes gunning for you. It’s speed and ability to turn leaves you wildly outmaneuvered. This is the first war of the jet age and you are facing the deadly Russian-built Mig-15. Its novel design runs circles around the more conventional straight wing US jets. A critical lesson is driven home – speed and agility equal success.
Flash forward to today’s corporate battleground. Fast moving, rapidly innovating new entrants are disrupting whole industries. Companies like Amazon, Netflix, Uber, and Airbnb, to name a few, are rewriting the rules at a blistering pace. Old-line stalwarts are going down in flames. What are the “sweptback wings” of these new top guns? What do they all have in common? They all use cloud computing extensively, even exclusively.
Let’s dig in deeper. When cloud first appeared many advocates pointed to financial justifications for adoption. Considerations like cash flow improvement by turning Capex into Opex and lower Total Cost of Ownership (TCO) were part of the rationale. Forget it. Yes, cash flow is better – so that one is easy and obvious – but sometimes the TCO debate sounds like clerics arguing about how many angels can dance on the head of a pin. Focus on speed and agility. That’s the ticket. That’s the overarching value of cloud. Why does cloud adoption make you faster and more agile and why is this so important? It’s because the battle with your competition is not what you think it is.
Back in 2011 Marc Andreessen, the noted entrepreneur and investor, quipped in the Wall Street Journal: “software was eating the world”. He meant: “More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense.” He recognized that all businesses were transforming and the kind of IT engine they ran on would have a fundamental impact on the odds of success.
Think about it. What is the biggest key skill shortage today? It is people who can code. Why? Your enterprise needs these folks to support your increasingly software based business. And, where do they do their work – on cloud computing platforms. The old IT way is just too slow with its many month long procurement cycles and the drag of legacy systems. Come on, you have got to enter new markets or launch new products and features now, not in a year. You have got to spin things up quickly, try new approaches, shut down what doesn’t work and move on. Cloud adopters rise to the top. A recent survey reports that 40% of companies claim increased revenue and 36% indicate increased margins due to their use of cloud.
Sure, you might say, that may be true for others but in my industry things go much more slowly and conservatively. Sorry, the writing is on the wall for all. GE’s CEO Jeff Immelt recently talked about GE’s journey from being a company that was a “knuckle dragging industrial company” that outsourced technology and IT. “Then we woke up one day and realized we had to change,” said Immelt. “If you go to bed tonight as an industrial company, you’re going to wake up a software company. The world changed. If we followed that same (old) strategy something bad was going to happen.” And guess what, GE’s CIO confirmed that they are using Amazon Web Services (AWS) cloud to enable a big part of that journey.
Cloud is a necessary element to have in your arsenal. Just by using today’s new “sweptback wing” your organization will move faster and be more adaptable. Sure, there is much more other work required to bring the rest of your shop along. But, if you don’t start with building on the right fundamental underlying engine, how can you even hope to succeed?