Cloud-Driven Competition Compels Company Collaboration

When it comes to both cloud software development and enterprise cloud adoption, there’s good news and there’s bad news.

This was the primary message at February’s Boston presentation of the invitation-only Oracle Cloud Roadshow, an eight-city tour of talks on Oracle Cloud developments particularly pertinent to software resellers, independent software vendors (ISVs), original equipment manufacturers (OEMs), and other enterprises and SMEs. Speakers highlighted both the positive outcomes of increased cloud deployment and the new pain points that have arisen with the democratization of efficiency.

Jeff Kaplan, Managing Director of Massachusetts-based cloud computing consultancy THINKstrategies, delivered a keynote at the event with the running theme of a tale of two cloud cities, frequently referring to the present-day market climate as “the best of times and the worst of times.”

“[T]here have never been better market opportunities…or business models…to sell the solutions we have today,” Kaplan told a roomful of Roadshow attendees. “The barriers to entry continue to go down…and customer loyalty continues to go down.”

Discussing Netflix versus Blockbuster and Uber versus traditional taxi service, both of which have are now practically seminal examples of new age technology beating back classic business models, Kaplan noted that the adversity faced by old-model organizations has a silver lining.

“[W]e’ve got an opportunity to use…software in entirely new ways,” said Kaplan. “[C]onnected cars, connected homes, and…connected health [–] subscription [models] and business ideas that are software enabled[.]”

Enterprise demand for cloud efficiencies growing

As cloud computing and new XaaS innovations continue to make organizations dramatically more efficient, independent software vendors and other enterprises are being forced into a more competitive marketplace.

This is a good thing for the many enterprise CFOs and other top executives who feel that their own companies are lagging behind. Kaplan pointed to the dismal results of a 2013 CFO Research and Alix Partners survey, which measured the attitudes of senior financial executives. Only five percent of those surveyed indicated that they felt their company was performing at an “A level” in terms of financial returns from big data-related and other discretionary IT projects implemented to add to the company’s bottom line. About two-thirds of these senior financial executives gave their companies a C or a D. Only three percent, Kaplan pointed out, said that their companies were “excellent” in meeting expectations in business growth by way of new IT projects.

“The message from CFOs and other senior finance executives is loud and clear,” said Meade Monger, AlixPartners Managing Director, in a press statement accompanying the results of the survey. “[C]ompanies are spending too much on IT, and they’re not getting the business information that they truly need.”

In other words, businesses are crying out for the improved efficiency that the cloud can offer.

“The interesting thing that people don’t think about…when you run an application, that application inherits the features of the cloud,” observed Kevin O’Brien, Oracle’s Senior Director of Worldwide ISV and OEM Sales, in a later presentation that night in which he highlighted the social, mobile, and analytics capabilities of his company’s cloud solutions. “This is really where our ISV business is going, tapping into these rich capabilities[.]”

Kaplan demonstrated this realized cloud need by highlighting the results of Gartner’s much more recent 2014 Financial Executives International CFO Technology Study ,which reveals enhanced CFO involvement in IT business decisions.

CFOs as cloud and IT decision-makers

“When Gartner says it’s true, the market is always well ahead by that point,” quipped Kaplan. “CFOs are opening their purse strings. They’re not only at the end of the line in the decision-making process; they’re getting more active [earlier].”

The result of this enhanced, roll-up-the-shirtsleeves IT project collaboration, according to the Roadshow’s presenters, has been a breaking down of departmental jealousies and political barriers for the sake of the greater interests of the business.

“[S]oftware companies can get very siloed,” noted O’Brien. “[A]ll the [parts of the company] need to work in orchestration to bring them [to] SaaS.”

“[L]ike it or not, we’re all in the data business,” said Kaplan. “IT, who used to resist the ‘Ides of SaaS’ because they were afraid of losing control of their apps and their executives, [are now] envious” of the ‘SaaS haves’ – resulting in greater acceptance, greater adoption[.]”

In turn, this coming together of like minds across the business has led to, according to Kaplan, a focus on the bigger picture.

“What we’re also seeing…is a change in expectations,” continued Kaplan. “What happens is that after they discover [that the cloud can save them money], they start thinking about the value add…scalability, security, and performance. [W]e’re living in a hybrid world[;] how portable are your solutions…how scalable…how manageable…?”

Thus, as executives are thrust into competitive environments where cloud efficiency is emphasized, a we’re-all-in-this-together attitude has taken hold, focused on adding value for customers instead of on a price-based “race to the bottom.”

Of course, if this is the result, then maybe these cloud developments aren’t such bad news after all.

Joe Stanganelli is a writer, attorney, and communications consultant. He is also principal and founding attorney of Beacon Hill Law in Boston. Follow him on Twitter at @JoeStanganelli.

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