Cloud and Value in the Digital Economy

Digital is transforming – and in some cases sweeping away – the old ideas, models, and value streams, and revealing them to have been not just set in stone, but possibly fossilized. For example: information about a transaction is now worth more than the transaction itself. How can this be?

 

Most of us never thought the whole definition of ‘value’ could change its appearance so dramatically; we are accustomed to the gold standard, where economic value always equates to a certain baseline rule. If we no longer need to hoard gold, what now do we attach value to? No wonder so many businesses are facing the wrong direction.

 

In a similar way, the digital revolution is increasingly rendering ‘intangibles’ like Cloud services at least as valuable as the platforms and products that launched them.

 

Further, we are at last beginning to see some real numbers for the impact of cloud technology. We’ve been hearing the hype for the last five years or so, but where were the numbers to justify the claims and capture was happening? Seems like we may have crossed a divide; Cloud is now on the numbers sheets and it doesn’t look like budging: http://www.wired.com/2015/04/amazons-cloud-is-the-best-part-of-its-business-aws/

 

In addition to IBM’s dubious news bulletins about its “leadership in enterprise cloud”, we also see for the first time that Microsoft wants to now talk about its revenue and growth in Azure; although it is still cautious about putting real figures against it, it seems that its cloud sales are on track to top $6B this year – which is still about one tenth of the revenue of Amazon.

 

There is still lots of general dissatisfaction with the reality — but that may be as much about poor deployment practices, and even worse transformation/change practices as the “old guard” move from traditional technology and practices. Getting in the new kit, and switching from a large corporate data centre full of racks of computers to cloud-based storage and services, is only the first step. Everything around it needs to change as well: from procurement, to governance, to (internal) billing, to service desk support; the list really does go on and on, as change on this scale affects every corner of business.  And, of course, these are the core processes running the business on which much power and many careers hang; control of these areas is traditionally how we know who we are and what our status is in the corporate world. So it’s no surprise this is not all welcome.

 

Welcome or not, the digital economy is here. How can business start facing the right way at last? Get in touch with us at CoDE to find out what we’re doing to help, and how we can help you.

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About the Author : Kris Henley

Communications and Outreach for Surrey Business School's Centre for the Digital Economy, a newly-founded research centre to explore the implications of the Digital Economy for business, government and society.

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