The role of the cloud in business agility

Jane McCallion

3 Apr, 2018

If you want to start a business, first you need a great idea. Once you’ve got that idea, though, you need to invest and in this technologically advanced age we live in, there’s a lot you need to invest in.

Similarly, if you want to grow your business, you’re going to need to invest in people and core resources, of course, but also IT.

In the fairly recent past, this would have meant significant capital expenditure in your IT estate and all the services and expertise to go along with that. Even if you were a small or micro-business, you would need at least one server if you wanted to share files and do email. If you had larger aspirations, you would be looking at a server room or data centre.

The truth is, not every business or would-be entrepreneur could afford this level of upfront investment. If you could convince your bank for a business loan, you could start down that road, but you would be saddled with that debt for a long time. If you weren’t able to raise those funds, at best growth stalled and at worst businesses died and ideas failed to even get off the ground.

About 10 years ago, however, all that began to change, thanks to the cloud.

The software buffet

For entrepreneurs of all stripes, cloud has removed many of the barriers to entry — you can host your own virtual storefront on somebody else’s infrastructure for a monthly fee and you probably don’t even need a website designer (or not at first, anyway). You can use other cloud-based Software-as-a-Service (SaaS) applications to manage sales and customer relationships as well, rather than investing up-front for perpetual license software. Once you’re ready to bring onboard other people, you can also opt for cloud-based payroll management and other HR software.

The popularity of SaaS among SMBs is demonstrated by figures gathered by market research firm Techaisle in February 2018. These showed that in the US the number of SMBs using at least one SaaS application increased from 27 percent in 2011 to 73 percent in 2018.

A September 2017 study by the same organisation found that customer-focused cloud services were most important to SMBs, with 76 percent expecting to adopt at least one of these applications during 2018.

The beauty of this software buffet is it allows businesses of all sizes, not just startups or SMBs, to mix-and-match services, selecting what they need in the moment and adding to it as they go along. The subscription nature of the services also means that if a given service doesn’t fit the business’ needs, they can drop it and go elsewhere, without losing money or falling into contractual issues.

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Managed agility

For startups and small businesses, which face slim margins and greater vulnerability to market forces, the benefits of the flexibility offered by the SaaS model are fairly obvious. But larger businesses — all the way up to the very largest enterprises, in fact — can also benefit from it in the form of increased agility.

In a 2017 report called Cloud Strategy and Leadership, analyst house Gartner recommended: “As part of the cloud strategy, CIOs need to educate their CEOs and boards of directors about the need to invest in cloud as a style of computing that drives greater speed, agility and innovation.”

Large businesses and their CIOs are no stranger to the cloud, though. It was in some of these organisations where cloud first started to take off, albeit in the form of “shadow IT”, with the likes of Salesforce and Box making a name for themselves as companies that could deliver what the rank-and-file of an organisation needed faster and with less friction than their own IT departments.

Over time, such services have been legitimised as they have proven their value through greater productivity and ROI versus traditional software — assuming there even was a perpetual license equivalent of the service in question. Indeed, although productivity software for word processing, spreadsheets and presentations existed previously, the collaboration elements of cloud-based platforms like G Suite and Office 365 are completely novel. And it’s these types of features that can enhance agility, creativity and flexibility within a business and with external parties like partners and customers.

But the role of the CIO remains crucial when it comes to adopting cloud services, especially for agility.

As Gartner research vice president and distinguished analyst Janelle Hill pointed out in the same 2017 report: “Independent and uncoordinated journeys into cloud SaaS mean the goals, selection approach, initiation and ongoing implementation of services will be fragmented at best and siloed at worst.”

“A coordinated, value-optimised approach has the advantage of enabling multiple business units to benefit from joint decisions and shared end-user support for all of the various SaaS solutions,” she added.

Future trends

When it comes to running an agile business in the future, there are dozens of new trends gaining popularity that make use of the power of the cloud, with notable ones including DevOps and low-code/no-code (LCNC).

For these types of more technical trends, cloud is essential as it increases the speed of development and can also enable developers to offer a self-service catalogue of apps and code hosted on a cloud Infrastructure-as-a-Service platform (IaaS). The flexible scale-up, scale-down consumption model of IaaS is also a benefit to DevOps teams, and their more traditional development counterparts, for trialling and testing new initiatives without anyone having to commit hundreds-of-thousands of pounds to building out new on-premise infrastructure.

This isn’t to say that on-premise IT is dead, though. As Gartner noted in spring 2017, the move among established, larger businesses is towards hybrid IT, which offers a more flexible solution to their needs. Indeed, the analysts predicted that by 2020 90 percent of all organisations will have adopted hybrid infrastructure management capabilities.

In short, cloud has levelled the playing field for organisations of all sizes, increasing opportunities for creativity, agility and innovation, and will continue to do so for the foreseeable future.

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