Clouds Help Companies GrowBy Jeanne G. Harris and Allan E. Alter Print
Top-line growth is an under-appreciated benefit for users of cloud computing.
If an IT leader works for a company that isn’t named Amazon, Google or Facebook, chances are that company hasn’t gotten a big revenue boost from the cloud. It’s much more likely that it has used the cloud to cut costs, replace a standalone software application or back up older documents.
Research by Accenture, however, shows that 40 percent of all businesspeople with a knowledge of cloud computing believe it will support their product or service innovation in the next five years. If they’re right, the cloud will move from its current position—of providing operational benefit—to a new position of strategic value.
Many early initiatives involved using the cloud as a delivery mechanism for something they already sell to consumers. Take the paid apps that The Wall Street Journal and Time magazine have developed for the iPad. These organizations had digital news products, but are banking on iPad versions to bring in new revenue.
Likewise, Best Buy and Netflix began streaming movies and television shows over the cloud in addition to selling or renting DVDs. Consumers loved the immediate delivery model, and Netflix has reported that many new customers sign up to use its streaming service exclusively.
Now, new cloud services are targeting business customers. Fujitsu has launched an initiative to let local governments in Japan put digital images of worn-out bridges in the cloud, where construction companies can study the images (and other data) and provide the government with assessments. This is a cost savings to the government and a potential source of new revenue for Fujitsu. The system may get a real test in the wake of the devastating earthquake and tsunami that hit Japan this year.
BGCantor Market Data—a provider of fixed income, credit and derivatives market data—is offering its service directly to customers through a cloud product called BGCantor On-Demand.
Deeper Connections To Customers
One obvious way that companies have been using the cloud is by communicating with new and existing customers through social media. Hundreds of companies have set up Facebook fan pages to create awareness of what they do and to build goodwill in a place where (theoretically) the network effect can multiply that goodwill overnight.
Many restaurants are following the example of Starbucks, which has used social media for many promotions and contests. For instance, the Outback Steakhouse restaurant chain offered a coupon for a free appetizer on its Facebook Web page to the first half-million people who requested it.
However, companies are going beyond generating publicity and goodwill to using clouds for tracking and analytics. A third of the executives in Accenture’s research are using—or will soon use— cloud computing to analyze customer data.
3M’s marketers are using cloud services to mathematically analyze images that appear in their promotions and evaluate how visually effective they are to customers. Other companies use Twitter to send information and to track any negative comments. The ability of the cloud to quickly analyze oceans of data makes it a powerful tool.
Moving Into New Markets
Finally, some organizations have found that the cloud makes it easier for them to set up shop in a new location or reach new customer segments. Motech Automotive, a chain of automotive service centers in the Philippines, has cut months off the time needed to open new branches in its home country by using cloud services.
GE Healthcare, which had previously focused on selling to enterprises, has introduced a cloud-based service that small groups of physicians can use to maintain patient medical records and manage their practices digitally. And Xiwang, a Chinese food processing company that sells sugar and other grain products to food manufacturers, is using a cloud-based CRM system to support its first efforts in the consumer market.
Cloud computing can also help companies as they acquire other firms. For example, Brady, a manufacturer that has acquired 30 companies in recent years, is turning to cloud services to assimilate its acquisitions more quickly.
All of this is just a start. In the next few years, growth-oriented businesspeople everywhere will be looking for cloud applications that can generate incremental revenue.
For retail chains, it might be mobile promotions; for automobile makers, it might be in-car information and entertainment. The specific applications will depend on the industry, the products being sold, and the expertise available within the company.
None of these innovative ways of adding revenue will be possible without the involvement of corporate technologists. Smart IT managers and executives should jump at the opportunity.
Jeanne G. Harris is a senior executive research fellow at the Accenture Institute for High Performance and co-author of Analytics at Work: Smarter Decisions, Better Results. Allan E. Alter is a research fellow at Accenture and the former editorial research director of Ziff Davis Enterprise.
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