While cloud technology has been around for some time — in the form of utility computing, virtualization and grid computing, and now Software as a Service (SaaS) — it goes way beyond these, offering wide-ranging solutions that instantly provide every computing resource — hardware, software, networking, storage, etc. — to users. Cloud, perhaps, is one of the best examples of disruptive technologies during the present day. As a result, it’s the next element of focus on Insight’s ongoing series of articles.
Harvard Business School professor Clayton M. Christensen coined the term “disruptive technology” in his 1997 best-selling book, “The Innovator’s Dilemma.” He changed it to “disruptive innovation” in a later book, “The Innovator’s Solution.” On his website, he describes disruptive innovation as “a process by which a product or service takes root initially in simple applications at the bottom of a market, and then relentlessly moves up market, eventually displacing established competitors.”
For instance, in previous centuries we relied on iceboxes to preserve perishable foods. And while the domestic refrigerator was invented in 1913, it wasn’t until the 1920s–1930s when Freon was introduced, that the refrigerator market expanded. After World War II, the appliances went into mass production for home use, serving as an excellent example of disruptive technology in motion.
“Cloud computing has been around for a long time, right? And it’s getting better and better and better,” Google executive chairman Eric Schmidt said in a McKinsey Global Institute report. “After all, cloud computing is just mainframe computing in a different way, which is how I learned how to compute when I was a young boy. So the fact of the matter is these ideas have been around for a long time. Is that going to change the world? It certainly makes it better, but it’s another step in the evolution of computer architecture.”
The impact of cloud computing for business
Though cloud computing is not new, it’s an enabler of new and improved products and services. It’s like the introduction of Freon for refrigeration, growing the market and providing a better way. Cloud offers better pricing strategies, sales channels and technology. And it’s the next phase in the development of several industry offerings. That’s why we’re introducing our disruptive technology series starting with cloud computing. Let’s count the ways cloud is growing and improving industries:
- Small to Medium Businesses (SMBs) can run with the big boys. While there’s still a large gap in cloud spending between enterprises and SMBs, IDG Enterprise 2015 Cloud Computing Survey found midsize companies with fewer than 1,000 employees spent $578k in 2015, on cloud solutions and technologies. A healthy increase from the $400K spent in 2014. SMBs have to do more with less, and cloud is instant, always accessible, and involves practically no setup or initial investment. Plus, cloud services expand and contract with business demands.
- Local folders and shipped software updates are for #tbt. With an App Store, we can quickly download and manage all software from one location via subscriptions. Netflix partners with Amazon Web Services (AWS) so its users can stream shows and movies from anywhere in the world. Collaboration platforms, such as Dropbox, allow us to store and share files among web managers, partners, designers, agencies, clients and teammates.
- Tape and disk backup are quickly becoming obsolete. Cloud backup and storage beats both methods when it comes to efficiency, cost, maintenance and usability.
- Systems of engagement are changing to meet clients when and where they are, on any device. Short on staff and out of the office excuses are being used less frequently. Virtual offices allow us to communicate with customers at the right time from anywhere.
- Microsoft Windows Server 2003 is outdated. As the deadline for Windows Server 2003 end of support has passed, upgrading to Microsoft Azure, Office 365 or Windows Server 2016 is inevitable. But the migration benefits far outweigh the time and energy it takes, including continued, weekly bug fixes and security patches.
- The future of servers on premises looks different. According to Barron’s, survey statistics show 2% of computing workloads are expected to run in the public cloud by 2018. Besides efficiency, cost, maintenance and usability, cloud-based servers include anti-virus, intrusion detection, and network and data protection software — freeing up in-house IT. And security supplement blocks breaches at multiple levels, taking away the previous security concerns for moving to the cloud.
- The Managed Service Provider (MSP) model is growing along with cloud. With cloud computing for business now considered to be a mainstream technology for most companies, new opportunities have emerged for cloud service providers that extend beyond their traditional hosting infrastructure businesses, according to “Beyond Infrastructure: Cloud 2.0 Signifies New Opportunities for Cloud Service Providers,” a Microsoft-commissioned study conducted by 451 Research, LLC. The study revealed that nearly 70% of the opportunity for cloud service providers now centers on application hosting (email and business applications), managed services (backup and disaster recovery) and security services (threat management).
- Days stuck at your desk are over. “50% of users engaged in Bring Your Own Device (BYOD) have done so without their company noticing or in violation of the rules,” according to Gartner. “The proliferation of personal devices being used for work purposes has required the majority of organizations (82%) to make changes, from creating policies on how corporate data can be shared, to investing in Enterprise Mobile Management (EMM) solutions, and purchasing secure file sharing services,” according to the IDG Enterprise Consumerization of IT in the Enterprise (CITE) survey.
- Cloud is meeting the imminent needs of some industries. For the medical industry, government policy dictated the move to Electronic Medical Records (EMRs). Since the EMR mandate, studies published in the journal “Health Affairs,” found significant increases in the use of EMRs among the nation’s physicians and hospitals. Schools are supported through licensing programs and network solutions, to name a few.
- The Collaborative Economy Movement (CEM) is transforming business. The collaborative economy is a movement in which people are getting things from each other. “This means people go to a site like LendingClub to get funding for their new project, rather than a traditional bank. Or, they may go to a site like Etsy or Shapeways to get custom made goods, or go to a site like eBay to buy pre-owned goods, instead of buying new products from retailers,” writes Jeremiah Owyang on his blog.
Based on responses from more than 90,000 Internet users across the U.S., UK and Canada, the report, “Sharing is the New Buying: How to Win in the Collaborative Economy,” concludes that “Sharing online through sites like Airbnb, Uber and Kickstarter is growing, mainstream, pragmatic and satisfying, and as a result, has become a competitive threat to large corporations.”
Robotics, self-driving cars, drones, sensors, hybrid cloud and wearables are just a few of the technologies that could change our world over the next five years. Until then, look out for our next disruptive technology series post for what’s revolutionizing our world today.
