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September 13, 2010

The Cloud Flattens the Technology Landscape…But Should Enterprise Be Worried?

Joshua Geist

Enterprise accounts have always had a huge advantage over their smaller counterparts when it comes to their ability to fully leverage the benefits of technology. With large IT budgets and dedicated IT resources, enterprises invariably lead the way with new technology adoption, gaining the related competitive advantages that advances in technology usually deliver. 

Examples of how enterprises have historically leveraged their technology prowess and resources to great advantage abound, with one of the best examples that I’m aware of involving Walmart. In the early 1980’s when Electronic Data Interchange (EDI) was in its infancy and out of the reach of so many small retailers, Walmart blazed the trail by mandating EDI for its supply chain. The impact was substantial.  Walmart realized significant reductions in its operational costs, and was able to apply “just-in-time” inventory models to the retail sector. It used its access-to-technology advantage by leapfrogging its competitors on the way to becoming the most dominant retailer in the world.  

The landscape is changing, however. Access to game-changing new technology is now available to businesses of all sizes, and at affordable levels. Why is this happening? Largely because of the cloud and the emergence of cloud-enabled on-demand services. 

So, is this development a threat to the enterprises that have long held the dominant position when it comes to leveraging technology? Are their small and medium enterprise (SME) market competitors now going to neutralize the technology advantage the big guys have invariably had?

Only if the enterprises let it happen. 

Progressive enterprises are seeing the tremendous benefits that the cloud affords them, and are not sitting still while the technology world changes around them. They’re understanding that maintaining their in-house or outsourced technology silos is not the only path to continued competitive advantage, and that the cloud affords them new opportunities to stay on top.

Here are a few such opportunities that enterprises need to consider:

a) The cloud has dramatically expanded the number of vendors available to enterprises, with the list of those capable of handling their technology needs growing from 4 or 5 to numerous. More choices mean better negotiating power and a better technology fit.

b) Issues like platform support, scalability and encryption that were inherent features (and differentiators) of the big service providers, are now widely available to enterprises from a wide array of Cloud service providers. This can be leveraged and gives Enterprises to use different services from multiple suppliers.

c) Vendor lock-in, which can be a costly situation for enterprises, is no longer the concern it was thanks to the cloud. Enterprises can more easily move from cloud-to-cloud, leveraging substantial cost savings along the way – and maintaining their market advantage. The enterprise CFO who has been stuck in a maintenance contract for years because of vendor lock- will truly appreciate what the cloud can offer in this area.

 So, are enterprises seeing the opportunity that the cloud and loud-enabled services afford them? Certainly some are, and all signs point to a substantial increase in Enterprise cloud utilization in the next 24 months.  The applications driving Enterprise interest in cloud technologies are numerous, and with applications that cater to their two biggest IT priorities – infrastructure consolidation and surprisingly, BC and DR solutions – leading the way. (see Forrester’s Stephanie Balaouras excellent report).

  Progressive enterprises are determined to stay on top of the advantages afforded by emerging technology and are not only relying on their internal assets to maintain competitive advantage. They’re embracing the cloud and all that it has to offer.

The cloud may be flattening the technology landscape, but it’s also offering advantages for organizations of every size – big and small. Enterprises certainly can’t relax knowing they have a technology advantage today. But they shouldn’t be worrying either provided their exploring all the cloud has to offer.

The landscape is flat. The opportunities are anything but. 

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