R ‘Ray’ Wang on the Cloud in 2020, Part 1: Achieving Business Outcomes
By Sven Denecken, Vice President, Cloud Solutions, SAP – @SDenecken
As more and more organizations across industries embrace the cloud, they want to know what the future holds for cloud computing and their business. R “Ray” Wang has thought more about the cloud than just about anyone.
As founder and chairman of Constellation Research Inc., Wang speaks and writes frequently about disruptive technologies and business innovation. His popular blog, A Software Insider’s Point of View, attracts millions of page views a year, and Global 2000 companies seek his advice on technology and business strategy.
I recently caught up with Wang by phone while he was on the road in Tokyo to get his insights on the cloud in 2020. Following are excerpts from our conversation.
Q: Increasingly, organizations will look to the cloud to drive business outcomes. Where do you see the cloud heading?
RW: Cloud is one of the entry points to digital business, and the digital business transformation that’s happening is heavily dependent on outcomes. We no longer sell products or services. That’s a very bold statement for most companies to understand.
What we now deliver is experiences and outcomes and, more important, brand promises. These things require innovation in the cloud. These things require access from the cloud. These things require storage and memory and computational power in the cloud.
But it’s not just the cloud. The other four pillars of digital are converging. When we think about mobile, that’s the access point. When we think about social, that’s the way we manifest how we communicate. We’re talking about collaborating, sharing, publishing.
But the cloud is the focal point that enables this to happen. That’s really the big transformation piece. This is the technology that allows us to deliver outcomes.
Q: Cloud can be overhyped. What do you consider the fundamentals of cloud computing?
RW: Cloud portends a world that’s always on, always connected. It’s our ability to connect with people, with machines, with ideas. At a practical level, for folks to be part of that, they have to be part of the cloud. They have to be connected, to have access to other individuals and organizations. That’s the power of the cloud.
Q: What do you foresee as the biggest digital disruptions in the immediate future, and where does cloud fit into that?
RW: The big disruptions are occurring at both the business-model level and the cultural level. First, to access this power, to access these networks, to connect to these people, it no longer takes 5 percent to 10 percent of your revenue as capital cost and years and years to build an infrastructure. So the time-to-value aspect of the cloud is one of the big shifts.
Second, organizations are going to treat the cloud not only as a utility but also as a strategic weapon. Because the information inside the cloud is the foundation of Big Data business models. Bringing all that information to light, gaining insights from that data—that’s where the power of the cloud really emerges.
It’s not just a transaction. It’s not just an engagement. It’s when we get to mass personalization of scale. It’s when we take lots and lots of data and glean insights from it so that people can take better actions. And we’re seeing this happen.
Q: Can you offer examples of where this is happening?
RW: Sure. In the financial services world, a stolen ATM card can now be tracked down to the ZIP-code level, to the block level, to the four or five ATMs in the area. In manufacturing, where recalls might have taken eight weeks in the past, now they can happen in eight days.
But imagine when we can get recalls down to eight hours or even eight minutes. Because we have that information, we have that connectivity, we know exactly what the tracing routes are, we know exactly who’s touched what at what point in time. We can get that down to the machine, the operator, the hour on the shift, and exactly where those pallets were shipped, and we can do it in eight minutes.
That could be a savings of $100 million compared with doing it in eight days. In some cases, it could be a savings of $1 billion dollars compared with doing it in eight weeks. That’s what we’re talking about, a level of speed but also a level of context that has never been possible before.
The entire agenda of the Cloud in 2020 Forum can be found here. We are looking forward to welcome you onsite in Orlando on June 4th.
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