We’ve entered an era of exponential innovation. The pace of change we're going through right now is the slowest we’ll experience for the rest of our careers.
Large companies need to find ways to become more agile and innovate like start-ups if they’re to remain competitive and meet rapidly changing customer needs.
Cloud technology is emerging as a key enabler of data-driven decision-making and the ability to rapidly test and scale new services. As Dob Todorov, CEO and Chief Cloud Officer of HeleCloud, puts it, cloud has always had a compelling business case in terms of being the most secure, compliant and cost-efficient platform for running applications of all sizes.
And yet it took Covid-19 to remove the last vestiges of resistance to implementing cloud technology. The urgency to work from home and to serve customers from anywhere during the pandemic has overridden organisations’ concerns about sunk costs and their preference for maintaining the status quo.
Dob joined technology entrepreneur and academic Vivek Wadhwa and I on the latest episode of the Incremental to Exponential podcast, in which we explore how big companies can innovate to survive and grow. Vivek and I are the authors of the new book “From Incremental to Exponential - how large companies can see the future and rethink innovation”.
Now that cloud technology has become widely implemented, we discussed with Dob how it promises to unlock the insights sitting in mountains of unexamined data and to level the playing field in terms of access to scale and resilience. These two drivers of exponential change hold both an opportunity for and a threat to large, established organisations looking to innovate and compete with agile start-ups.
Data is the new oil of commerce, since it’s the raw material for insight and customer-centric decision making. The problem is that there is more of it available than we can meaningfully use, and the rate of data creation is speeding up.
Of all data in existence, 90% has been created in just the last two years and only 10%-15% of it is actually processed to become information. Even less is turned into meaningful, applicable knowledge. And so, there’s a huge gap between the opportunity for insight into what might create competitive advantage and what we actually know based on the existing data.
Cloud technology is a vital tool for generating that knowledge because you can create information lifecycle management pipelines and move data across various storage and application levels. Because you can store large amounts of passive data in the cloud cost-effectively, you can start to ingest and analyse it using artificial intelligence and machine learning to distil the wisdom that’s hidden deep inside it.
The second powerful force being unleashed by cloud technology is its democratisation of access to large-scale infrastructure, application and security services. No matter what size you are, you can have access to the same security, compliance and performance. Now resilience is available to everyone and that’s a critical factor in opening up competition for online business to smaller players. So, it's really a question of your ambition and not a question of your financial abilities anymore.
Now, that might sound like a threat to large incumbent businesses, but the flip side is that you no longer need to depend on your legacy systems, which might have been holding you back against more nimble competitors that built their systems to solve new customer problems. It doesn't make sense to have your own data centres, because you can get much better services and security through a platform such as Amazon Web Services or Microsoft Azure. That means your infrastructure doesn’t have to hold you back if you need to pivot like the small guys.
Given the cloud’s importance, how can we ensure that cloud technology initiatives deliver the benefits they promise? Many of the success factors revolve around the human in the mix and ensuring that we communicate and manage the change well. Has the leadership bought into what the future might look like? You need to create a culture of innovation and the right incentives to ensure support for the project. Getting the structure right is vital: do you separate innovation, or do you have it as part of the main organisational mission?
Large organisations who change successfully assume that everybody is an innovator. Amazon is a great example. Amazon Prime was created when a guy called Charlie Ward put a note in the innovation suggestion box that was read by Jeff Bezos. Now it’s a $10bn business. For that to happen, you need a certain culture: one that assumes that everybody has a good idea, and that the CEO is going to hear about it. That’s the sort of culture that will successfully innovate using the cloud.
Finally, what’s next for the cloud? The falling cost of technology, minimisation of components and so on that Vivek and I regularly talk about in our podcast are creating the golden age of innovation. It's going to allow us to do so much more. And yet the cloud won’t be immune to the cycle of destructive creation: the next exponential technology is already in development right now. And it will disrupt this one.