Ray Wang: Cloud Is The 'Foundation For Digital Transformation' 12-24

Ray Wang:

 Cloud Is The 'Foundation For Digital Transformation'

Here’s a startling little factoid: Since 2000, 52% of the companies in the Fortune 500 have either gone bankrupt, been acquired, ceased to exist, or dropped off the list.

That’s a massive shift, and it’s only going to increase, says Ray Wang, founder and principal analyst at Constellation Research.

Speaking at CloudWorld Boston, Wang examined how the convergence of a host of technologies is powering digital disruption. Mobile, social, analytics, connected devices, 3D printing and cloud computing are all part of a process enabling businesses to digitize their processes and their business models.

“Digitalization of business is a key factor in this accelerated pace of change. Information flows faster,” he said.

The technologies themselves are essentially table stakes—widely available and easy to use. Businesses differentiate themselves by using the technology to create new strategies of such disruptive power that they can wipe out entire markets.

“It’s not technology alone, it’s how that technology is being applied to business models,” said Wang.

For example, look at the iPhone, which has obviated the demand for items from flashlights and wristwatches to alarm clocks, cameras, and CDs. When Apple introduced its iconic device in 2007, who could imagine that one device could destroy 27 business models, as Wang asserts that it does?

“That’s why you have to get to digital, and that’s why we need to talk about cloud—it’s the foundation for digital transformation,” said Wang.

Indeed, Wang points to the cloud as the single most disruptive of all the new technologies – if only because of its ubiquity and ease of adoption. Cloud not only provides a source of unlimited and dynamic capacity, but also helps users consume innovation faster. For example, rather than having to wait for IT to upgrade an in-house application, SaaS users get the latest software innovation as a matter of course.

should consider to reinvent themselves for the digital economy and build a new digital identity.

1. Design new experiences and business models. Yes,

 cloud removes many of the barriers of on-premise systems. But companies still need to spend time thinking about what a digital user experience is and design new processes or businesses around that. Customers seek outcomes and experiences while many organizations continue to think in terms of selling products and services, said Wang. Businesses can use the cloud as a platform for change. “The worst thing you can do is replicate the same crap you had into the cloud,” he said.

2. Develop a culture of digital DNA. 

Digital transformation requires skills across the board, and companies must rethink the attributes that will help a digital business thrive. Balance the quant jocks and engineers with people with digital visual skills, for example.

3. Apply new technologies to existing infrastructure. 

Tech convergence of these digital disruptors is a starting point, but that doesn’t mean you hold a yard sale for your existing systems. Instead, figure out how to combine the new with the old to further digital transformation. Can you use PaaS and SaaS together, for example, to make applications globally portable or simplify your company’s ability to consume innovation via seamless upgrades? (It helps if you’re using a PaaS that supports Java and SaaS apps also built using Java.)

4. Move from gut to data-driven decisions. 

Data is at the heart of digital transformation, said Wang, and companies must figure out how to turn the data they collect from every online touchpoint into information that delivers real-time context and relevancy for decision-making.  Information needs to flow freely across platforms in order to build the foundation that allows companies to quickly move from data to insight to decision.

5. Co-create and co-innovate with new partners. 

In today’s always on, interconnected business world, digital business models work best when drawn up as an ecosystem, not a monolith. You’ll need strong leadership to find the right partners, from vendors to suppliers to customers, to create an ecosystem that supports your strategy. Again, cloud is key. “Very few companies today can open up their systems and have their partners build on top of them,” said Wang. “Cloud helps you do that.”

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