Live From Pulse 2012: IBM Study — Cloud Computing to Rewrite Corporate Business Models

The number of enterprises turning to cloud computing to revamp outdated business models will more than double in the next three years, as business leaders move to capitalize on the rapid availability of data and the growing popularity of social media, according to a new study released today by IBM.

Organizations clearly intend for cloud to improve their business capabilities, in addition to enhancing internal efficiencies.

Businesses that embrace the transformative power of cloud will have a significant advantage in the race to introduce new products and services and capture new markets.

To better understand the shift in how organizations use cloud today and how they plan to employ it in the future IBM, in conjunction with the Economist Intelligence Unit, surveyed more than 500 business and technology executives worldwide. The findings were compiled in a new study, titled “The Power of Cloud: Driving business model innovation.”

“Companies are starting to understand — cloud isn’t just about gaining efficiencies and cost savings; it’s about driving the kind of fundamental innovation that provides lasting marketplace advantage,” said Saul Berman, IBM global strategy consulting leader and co-author of the study.

Changing Motivations for Cloud Adoption

According to the study, as they strive to better meet customers’ needs and drive future growth, business leaders will increasingly tap cloud to develop new business models that can exploit the capabilities resulting from these digital trends.

While 16 percent of the executives surveyed indicate they are already using cloud capabilities for sweeping innovation, such as entering new lines of business or reshaping an existing industry, by 2015 35 percent intend to use it to transform their business models. 

While a little more than half of the respondents indicated “improving organizational efficiency” as a top business challenge today, only 31 percent anticipate it will be a top challenge in three years. Instead the study indicates that their focus is shifting to growth and competitive initiatives in the future. The objectives cited by survey respondents for adopting cloud are in line with these business goals, indicating that business needs will soon rival IT motivations for cloud adoption:

• 62  percent of survey respondents said increased collaboration with external partners is a key objective for adopting cloud;
• 57  percent cited competitive cost advantages through vertical integration as a major motivation and;

• 56 percent pointed to opening new delivery channels and markets as an important objective.

Examples cited in the report showcasing how cloud is being tapped to drive new revenue streams and enhance business models include an online marketplace for handmade goods that has taken advantage of cloud’s cost flexibility to gain access to more powerful analytics online.

The company is able to cost-effectively analyze data from the approximately one billion monthly views of its Web site and use the information to create product recommendations, providing it with access to tools and computing power that might typically only be affordable for larger retailers.

The study also cites an online health information network that enables the exchange of health information and transactions among healthcare providers, employers, payers, practitioners, third-party administrators and patients in India.

By connecting more than 1,100 hospitals and 10,000 doctors, cloud computing’s capabilities are facilitating better collaboration and information sharing — helping the network to pursue a more collaborative business model and deliver improved care at a low cost.

Masking Complexity, Enabling Consumer Needs

The study’s authors point to cloud’s capabilities to mask complexity and enable user-defined experiences, as well as its overall scalability and cost flexibility as key reasons companies are planning to move it into front office operations in the near future.

“Cloud has the power to open doors to more efficient, responsive and innovative ways of doing business, and we believe the companies that will come out on top will be the ones that find ways to leverage it as a key point of differentiation in driving business value,” Berman said. “Whether they choose to tap cloud to optimize, innovate or even disrupt their business models, they need to start working on it now.”
 
Visit here to download and learn more about the study.

Help Desks In The Clouds

More IBM clouds are on the horizon.

Today, IBM announced the availability of some new online software services from our Tivoli business that will help provide improved automation and control of IT Service desk functions.

The new solution, which will be offered as a monthly subscription offering, can help organizations large and small with their help desks, which often deal with labor-intensive services like onboarding new hires, fixing laptops, and resolving IT issues.

Many companies struggle with slow, inefficient service request handling because the the core their application support, networking, facilities an IT assets aren’t integrated and depend on manual updates.  Yet IBM estimates that only 5 percent of service and support issues are resolved by self-service, making automation and integration crucial for service management.

To help meet this demand for automating IT service functions, IBM Tivoli Live – service manager will allow clients to start small with IT Service Desk functionality and grow into more extensive IT automation services as a company’s needs change.

Since IBM Tivoli Live –service manager is delivered on the IBM Cloud and based on a subscription model, the service reduces the complexity and management required by on-premise deployment.

There is no need to purchase hardware, software licenses or engage in extensive software configuration. This software-as-a-service is based on IBM’s on-premise, enterprise software that hundreds of clients use today.

In addition to choosing which IT processes clients want to automate first, they can also choose which ones they want to access through the cloud or deploy on-premise.

Unlike competitors, IBM offers software-as-a-service that integrates IT Service Desk with monitoring services that manages the health and performance of IT resources, including operating systems, virtualized servers, middleware and software applications.

This is available by integrating Tivoli Live – service manager with Tivoli Live – monitoring service, offering clients a fully integrated service management environment.

You can learn more about this new offering here.

Gartner: SaaS Clouds Growing

Gartner just issued its 2009 SaaS revenue forecast, in which it said it expected the sector to grow nearly 18 percent this year, to $7.5B.

Gartner also expects the sector to show consistent growth through 2013, when it suggests the worldwide SaaS revenue will total over $14B.

The content, communications and collaboration (CCC) market (visit LotusLive to see how IBM plays in this space) and the customer relationship management (CRM) market continue to have the largest amount of SaaS revenue across market segments.

Gartner says that the CCC market generated $2.6 billion in 2009, up from $2.14 billion in 2008, and the CRM segment generating $2.3 billion in 2009, up from $1.9 billion in 2008.

The future of SaaS seems to be so bright you gotta wear a raincoat.