As Cloud Computing approaches its 18th birthday, it’s a good moment to consider what comes next. Given that “the Cloud” has completely upended the IT industry during its adolescence, knowing where it’s going in the next 18 months – let alone 18 years – is key to making smart IT and business decisions. Here are four dynamics that should shape your investment, sourcing, and management strategies for the next stage of technology evolution.
The Cloud is becoming the Platform ...
The Cloud’s great leap forward was in allowing developers to see – in real time – how software was used. This seemingly simple step saw the birth of Amazon, Google, Salesforce.com, and Uber (amongst many others) that have become the new titans of our Digital Age. If the software you write – or consume – doesn’t do this, it’s toast. Cloud vendors provide “platforms” that learn, grow, and develop through analyzing transactional metadata that customers or users provide with every click, like, browse, swipe, and buy. The Amazon of today is very different from the Amazon of 2005. The Uber of 2025 will be very different from the Uber of today.
Enterprise software and solutions vendors have been slower to leverage this development, but are now racing hard to catch up. Enterprise IT departments likewise have been cautious in leveraging these new trends, but similarly, are increasingly investing in platforms to power processes like telco expense management, fraud protection, and medical billing reimbursement.
Platforms are becoming way more important and valuable than any single piece of technology (check out Uber’s current valuation). In its toddler years, everyone thought that Cloud was about cost reduction through multi-tenancy. While a crucial development, it was really only a stepping stone on a longer journey. Platforms pre-integrate “below the app” components and facilitate easy “above the app” extensions. With that – and the ability to constantly improve the user experience through API generated feedback - Metcalfe’s Law kicks in; the value of the platform is proportional to the square of number of users.
The Internet begat the Cloud. The Cloud begat the Platform.
... which is powering the Internet of Things ...
As sensors and processors wander further afield from their spawning grounds (i.e. the datacenter and the desktop) it’s becoming clear that technology’s past is simply prologue. We ain’t seen nothing yet.
The Cloud a.k.a. The Platform is central to the great digital build-out that is ramping up. As “things” become “smart,” the big commercial opportunity will be to orchestrate interdependencies; a smart fridge that can “automagically” order milk when you run low and have it delivered will only become reality if a complex set of integrations occur.
The key to solving this challenge will be the mechanism that pre-integrates components and facilitates extensions, learning all along the way, i.e. the Platform.
The vendor-side war to monetize this challenge is heating up by the minute; Wink, Iris, Revolv, Vivint, Alljoyn, Allseen, Brillo – all solutions that seek the early lead in establishing platform dominance.
As the Cloud has become the Platform, it becomes more obvious that seeing the Cloud as simply a means of reducing cost in your “as-is” business is to miss its role in generating your “to-be” business i.e. your future. The Platform generates and harvests data, understanding and leverage of which, is central to the Digital Era.
... which forces you to choose between being a developer or a Consumer ...
The central role that Platforms play now, and will increasingly play in the future, means that much of current enterprise IT is unfit for purpose. Consider, does your accounts receivable software learn from its users? Does it suggest that if you did x you should now do y?
At the same time though, the cost of developing modern platforms that can support your business users to compete and win in the commercial market is prohibitive for many. For those enterprises, one course of action is to decommission existing in-house applications and supporting infrastructure and staffing, and re-direct spending toward buying commercial platforms. Reduce the number of developers; increase the number of contract negotiators.
Many CIOs baulk at this idea. Having gotten to the top through technology it’s hard to contemplate saying “goodbye” to it.
But the sophistication of the modern Cloud a.k.a. The Platform, and the fact that platforms produce “winner take all” results, means that only those with strong constitutions (and deep pockets) will be able to continue to operate as developers; the better, more logical route, will be to be a savvy platform consumer.
... but everything rests on the Platform being secure
However you see the future of the Cloud, and however you plan to leverage it, one thing is clear: Everything rests on white hat beating black hat. The simple truth is that whatever you’re spending on security, it is far too law. That doesn’t mean doubling it; it means – at least - quintupling it. With the future of your business resting on a digital platform, security failures are not an option.
The Cloud a.k.a. the Platform is core to the future of your work. Mastering it is the great task ahead.
This piece was originally published at CIOreview.com