Why You Should Aim for the Clouds to Grow Your Business

January 26, 2011

According to global market research firm MarketsandMarkets, the cloud computing market will grow from $37.8 billion this year to $121.1 billion in 2015.

Let that marinate for a second. That represents more than 300 percent growth over the next five years. So, if you’re looking for one of the best current business growth strategies, it might be worth looking to the clouds. A great InfoWorld article explains cloud computing and its importance in the information technology world quite well:

“Cloud computing comes into focus only when you think about what IT always needs: a way to increase capacity or add capabilities on the fly without investing in new infrastructure, training new personnel, or licensing new software. Cloud computing encompasses any subscription-based or pay-per-use service that, in real time over the Internet, extends IT’s existing capabilities.”

At its core, cloud computing enables internet based, on-demand network connectivity that accesses shared resources, infrastructure, software, and other information.

Businesses can leverage it to provide applications, software, or services in a much more malleable product offering.

The businesses that embrace cloud computing have a new delivery model that allows their customers to consume and interact with the product.

A post on WebHosting Unleashed quoted a study by technology research firm Gartner Inc. that predicted by 2012, 80 percent of Fortune 1000 enterprises will pay for some form of cloud computing service, while 30 percent will pay for cloud computing infrastructure. That’s a lot of potential. At the moment, the relatively nascent technology does have its imperfections. But the article’s author, Cindy Waxer, argues that there are five undeniable benefits:

  • Scalability: With cloud computing, companies can adjust its capacity based on its network’s needs. Service costs are based on consumption, so it’s an incredibly efficient model. A company only pays for what it uses.
  • Easy Implementation: Because cloud computing doesn’t require hardware, software licenses, or implementation services, companies can implement cloud computing quickly and at a fraction of the cost of in-house solutions.
  • Skilled Practitioners: Cloud computing vendors are typically reputable, reliable, and big enough to offer more than enough storage and computing capacity for your business. Companies like Google, IBM, and Microsoft offer cloud computing solutions and that list is sure to grow over time.
  • Freeing Up Internal Resources: By using a third-party provider, a company will free up its own servers and IT team. That will allow you to refocus your resources to important in-house issues.
  • Quality of Service: By using cloud computing, the burden to provide constant customer support and emergency response is taken from a company’s IT department and placed on the shoulders of the vendor. Network outages can still occur, but they’re often resolved within a matter of hours.

Taking Advantage of the Clouds

Regardless of your current position (installed software, appliance, SAAS, infrastructure technology, development tools, application technology) there is likely an opportunity to draft off of cloud computing’s enormous technology spend and position your product to gain more sales.

You may need to refine some of your company’s development strategies to support it, but most issues are easily resolvable. For example, you may need to adjust your IT staff according to their cloud familiarity. Or you may need a business development point person to help build your ecosystem while you rework licensing agreements to support the new platform.

The key is to get the market strategy right and determine how to implement it. That could involve adjusting whole product, customer development, and company development strategies, but the reward might be worth it.

Here are some ideas for how software companies can take advantage of the newest fad:

  • Move the cloud from a fundamental delivery point of view.
  • Create or improve your Application Programming Interface so that cloud services can easily connect and utilize your platform.
  • Develop your ecosystem of partners so that you can make your product easier to integrate and allow it to be part of a broader platform.
  • The cloud frees up enormous amounts of data and information that can be integrated into your platform. Figure out how to use it in a way that adds value to your customers.
  • There’s probably plenty of trapped data and information in your system. Free it up and allow others to create value for your customers.
  • Identify the ongoing pain points of cloud deployment and remedy at least one of them.
  • Use cloud in your messaging. It might make you sound fresh and new.
  • Develop a vision for the future of the cloud as it relates to your sector and figure out what position you want to own. Work toward that end in an iterative manner.

There are numerous ways that you can exploit the cloud for business growth strategies. Spend some time thinking about it as it relates to the context of your company. If your company commits to it, you might be able to take advantage of a market that has the potential of growing exponentially in the coming years. Even better, you could be creating distinct competitive advantage.

Founder & Partner

As the founder of OpenView, Scott focuses on distinctive business models and products that uniquely address a meaningful market pain point. This includes a broad interest in application and infrastructure companies, and businesses that are addressing the next generation of technology, including SaaS, cloud computing, mobile platforms, storage, networking, IT tools, and development tools.