Enterprises pursuing digital transformation must be prepared to adapt their business strategy to changes and evolution in cloud services.
Dr Will Venters (pictured), assistant professor of information systems at the London School of Economics, explained that companies integrating cloud services into their IT infrastructure need to establish fluid partnerships with multiple vendors, as opposed to purchasing a static product.
“[Companies] still see computing as a product. We still do transactional deals, shaking hands and purchasing products which we will stick to rather than creating a relationship where both sides continually evolve and change dynamically,” he said at Cloud Expo in London.
“These decisions to buy cloud services are much more about partnership arrangements than a product purchase decision. We need to think about organisations as part of an ecosystem, and we need to think of technology as changing, adapting and having an agenda.”
Many companies undergo a digital transformation by adopting multiple interwoven cloud systems, such as software-as-a-service that sits on top of cloud infrastructure provided by another vendor.
“You now create these dynamic partnerships with all the cloud service providers to create an ecosystem of your organisation,” he said.
Netflix is an example of a company consisting of various connected cloud-related services, like using Amazon Web Services as its platform, but plugging into content management systems, smartphone operating systems and app stores.
Venters and his research colleagues have dubbed these ecosystems the ‘cloud corporation’. This connectivity means that companies need to be prepared for changes in cloud service that are out of their control but can affect business operations and strategy.
He cited the impact of Google’s ‘mic drop’ April Fool in Gmail as an example of a cloud service vendor changing something without their users' knowledge that resulted in embarrassing and compromising email exchanges between people who use Gmail as a professional email service.
Venters warned that cloud vendors may even modify the service they deliver to adapt to changing market conditions and technology evolution.
“Let’s think about technology in terms of dynamic change. We need to think about digital business strategy for these types of organisation,” he said.
Smarter digital transformation
Coming up with a digital business strategy may be a daunting prospect for enterprises that have barely established inroads into how they will use the cloud and related digital services.
However, this could be the crux of getting the most out of a digital transformation and ensuring that cloud services offer benefits that extend to the whole business rather than simply optimise the operations of an IT department.
Digital transformation should be seen as an IT revolution not evolution if it is going to have the maximum effect in the enterprise world.
Venters said that enterprises can respond by understanding the direction and business models in which cloud vendors are heading and creating a business strategy in response. This can evolve with them and if necessary pivot in the opposite direction if the objectives of both do not align to the benefit of each other.
“When we buy a service [from a vendor] we need to understand their business model and how it might adapt in the future, and then adapt our business model to align with it,” he explained.
Such a strategy means that all IT procurement should be seen as acquiring sustainable services, not products, that operate in tandem with a company’s business strategy.
Effectively, each purchase needs to work in the context of the business and the wider cloud ecosystem to which they connect.
Cloud adoption should not be seen as the final part of digital transformation but as an evolving service and ecosystem that fuses business and IT strategies.
It could be argued that approaching cloud integration with the need for such considerations throws a hurdle in the way of IT leaders pursuing digital transformation.
But a savvy approach in the early stages will yield bigger benefits in the long term, and help enterprises keep up with other organisations well under way with digital transformation projects.
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