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Firms using cloud for competitive advantage double revenue, claims IBM study

Archana Venkatraman

Organisations that use cloud computing platforms robustly for big data analytics, collaboration and customer relationship management are reporting nearly double the revenues and profit growth of those that are more cautious about using cloud, according to an IBM study.

The global study of over 800 enterprise IT decision-makers, found one in five organisations is ahead of the curve on cloud adoption and is gaining a competitive advantage over hesitant users, in addition to benefiting from other cloud advantages such as cutting costs and driving IT efficiency.  

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Over 40% of respondents said they had realised major improvements in organisational efficiency through using cloud. Cloud computing is also helping enterprises to more rapidly respond to changing customer needs and market shifts, expand into new markets and target new segments, respondents said.

Early cloud adopters are building competitive advantage in three ways – through strategic reinvention, better decisions and deeper collaboration – the study found.

More than half of the cloud users said they had altered their business model through cloud because of better insights. With access to more data and expertise – and fewer capacity constraints – they can more easily create new revenue streams, new value propositions and even brand new markets, respondents said.

Early cloud adopters are also more likely to use cloud platforms for more data analytics to derive insights for better business decisions and to re-invent customer relationships, according to IBM.

The study also found that cloud’s strategic importance to decision-makers, such as CEOs, CMOs, finance, HR and procurement executives, is set to double from 34% to 72%, beating their IT executive counterparts at 58%.

Compared with more cautious cloud adopters, the robust cloud adopters are 117% more likely to use cloud to enable data-driven decisions; 79% more likely to rely on cloud to locate and leverage expertise anywhere in the ecosystem for deeper collaboration; and 66% are using cloud to strengthen the relationship between IT and lines of business. Most are using cloud to integrate and apply mobile, social, analytics and big data technologies.

How London Met University uses IBM Academic Cloud for competitive advantage

London Metropolitan University has become the first UK university to implement IBM Academic Skills Cloud – a cloud computing technology designed to help focus the academic faculty, students and business on developing workplace skills in an education environment.

IBM Academic Skills Cloud is part of the company’s Lab initiative. Launched in 2010, IBM uses it to make key parts of its software portfolio available in a cloud computing environment to allow academic institutions to incorporate technology into their curricula. It runs on IBM SmartCloud Enterprise

The cloud resources give the university’s business & law faculty students the opportunity to experience IBM products and business culture first-hand, so they have the tools and confidence to compete in a highly competitive global environment and, in turn, provide greater value to their future employers.

Read the full story here.

The findings come as the overall cloud market is estimated to reach $244bn by 2017. Gartner has estimated the worldwide market for public cloud services in 2013 at $129bn.

IBM has invested more than $6bn in more than a dozen acquisitions since 2007 to accelerate its cloud initiatives. Earlier this year, it acquired cloud provider SoftLayer Technologies for $2bn.

“The traditional model of IT delivery had run its course and we had to make the transition quickly and that was the most challenging aspect,” Jim Comfort, general manager for cloud development and delivery at IBM, told Computer Weekly. “We have now moved from a product-first to a cloud-first and services-first mentality.”

“Five years ago, we didn’t have a cloud model, but today it is a big part of our business.”

Among enterprises using IBM cloud to gain a competitive advantage are the United States Tennis Association (USTA) and the US General Services Administration. In Europe, London Metropolitan University, and the Institute of Technology Blanchardstown use IBM cloud services.

But despite gaining a competitive advantage, as much as 51% of early adopters admitted their cloud journey has been difficult and fraught with complexity. But users have found ways around the challenges, such as adopting open source cloud platforms, using hybrid IT strategy and developing a holistic approach to cloud computing.


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