Strategic

An interesting finding concerned the complexity of discerning strategic benefits relevant to an organization seeking to be innovative:

“In the market, we have many service providers, who have taken on the task of running customer infrastructure, IT infrastructure, so they are already buying compute as a service in a sense. Many of them don’t have to buy their own servers and manage. Many hosting providers are doing it for them. For this type of customer to go to the cloud, they will find that server for server ratio is not positive. There are no big savings in cash, but what you have are the strategic gains, and those are hard to quantify. So that is the biggest challenge. How do you quantify them? It’s the famous 70/30 percent of management in IT. You spend 70 percent of your time managing your IT and 30 percent on innovation. You want to flip that.” (Interviewee I)

Nonetheless, several factors surfaced. An overall consensus presented itself around the fact that speed was a clear benefit of going cloud:

“In general, for me, the cloud is speed. You can initiate an R&D project on Friday and have it up and running on Monday if you like rather than having people buy boxes, get someone to install it, get cables into it, make sure that everything is working together, and do testing. You just push a button and, or even better, write infrastructure as a code. So the main thing with the cloud is speed. You have to accept a few truths when going there, but mainly it is a huge enabler for business and technology to move forward.” (Interviewee G)

“The benefits of having standardized components and also certification in the cloud is that resources have a common language, toolchains, and processes to build the services that you would require. Doing that is basically having a standardized IT organization that is essential to deliver on the time frames that we are supposed to. Not during the Pandemic, but in general, IT needs to deliver faster and better to cope with the business.” (Interviewee H)

The speed did not come without caveats but nonetheless empowered organizations to deliver improved services. Moreover, agility emerged as a significant advantage of the cloud:

“Companies that jump into the cloud can change faster because they are not so set. If you’re investing in technology and running it in-house, you rely on building loads of competency on that technology, and if they leave, you need to find new people to cover that area. If it’s cloud technology, you still need to find competency, but you don’t need to worry about running it, and you have more flexibility to change faster. That’s important from a business perspective as business and customer needs are changing faster and faster all the time.” (Interviewee B)

“It enables companies to get global reach from the command line. So our team in Norway can deploy code from our desktop into a data center in Australia. It's absolutely fantastic. We derail huge enterprise data centers from the command line. The power of that is immense and fantastic flexibility. If you look at the drivers of cloud, it's the web interface that you can use and do anything from, such as me talking to you on Zoom from my car with outstanding quality.” (Interviewee A)

This flexibility was specifically relevant in current times of the Pandemic, forcing organizations to

reconfigure their business processes and adapt to the Force Majeure of the market. Furthermore, the majority of interviewees disclosed the construct of scalability:

“Scalability is one critical factor. If you make use of as a service product from, for example, Microsoft and Azure, you will have much better services. You can make use of a database as a service, for example, operated from Microsoft. You have the security patches and basic infrastructure operated by the cloud provider. You still need to think about what you will run on top of the platform, but you most probably have a more secure and more effective platform. You can start up a service in a day and finish it off after a month if you don’t need it anymore. So the scalability both up and down is the one big success factor and the most important to think about when using the cloud.” (Interviewee F)

“If you are using a public cloud provider like Azure, you’ll have much more room regarding scaling, auto-scaling, hyper clustering, which allows scaling business on demand. Suppose you were serving customers in Norway and expanding to the entire Europe. In that case, you could set up existing features and connect them to whatever you have in the cloud in the portal with Powershell or Command interfaces and build on what you have. It’s a competitive advantage, but everyone can do it.” (Interviewee C)

Speed, scalability, and agility surfaced as benefits of the cloud. Still, another finding was that organizations were able to focus on their core competency by outsourcing exhausting resource components to the cloud:

“I think the cloud is an enabler for companies to spend more of their time and resources on what they are good at. You outsource the task of operating infrastructure, applications, and servers that you don’t need to run in-house. Unless it’s your core business, you should have excellent arguments about why you should not go into the cloud. If you can focus on core competency and spend less time on the hassle of maintaining, upgrading, and managing systems, you will be better off.” (Interviewee B)

“The essence of technology is that most new features and technologies come to cloud-first nowadays, so companies that focus on having everything on-premises are going to have to keep much focus on their IT environment have people trained, and spend much money in this area. So, the question is if that is in their interest? Is IT a core part of their business? If it’s not, the outsourcing bit is just a natural move. You don’t want to run servers in your basement.”

(Interviewee I)

Not running servers in the basement was a reoccurring theme during the interviews, as it would impede organizations to gain competitive advantage:

“The strategic gains is that you are on top of the technology, which means competitors are not going to run away ahead of you because you are lagging behind.” (Interviewee D)

“Very easy to get stuff out there, test out to market theories, so that's the primary opportunity around the cloud technology. Rapid innovation, become more competitive and create value to your customers and employees by doing digitalization.” (Interviewee A)

“You have a global presence, a massive amount of computing, storage, networking power that you could never hope to get. The innovation opportunities are much closer or easier to start. You can ramp up a thousand servers in a week and turn it right off, so you don’t have to make big investments. So the hurdle is much lower.” (Interviewee I)

In addition to investment savings, organizations would benefit from the experience and resources of the providers, who applied best practices to deliver superior productization and technology experiences for customers:

“Today, the cloud is a requirement. The benefits are the productization and the market getting more mature for the customer. We know what they really want. We see it from our existing clients what really creates value. Then, we take those best practices to our product development and the productization of services and processes. Customers benefit from the existing customer base and experience our experience about HR-tech.” (Interviewee E)

These findings underline how value creation, innovation capabilities, and integrating cloud technology to fit business needs pave the way for an edge over competitors, as exemplified by the following example:

“Netflix can fully vacate in 15 minutes a full region of Amazon, move all the clients to a different region, that’s counted in the millions. So they move, for example, from Ireland to New York without anybody noticing. It’s not science fiction.

It’s structured work. They have taken that sort of approach and invested a huge amount of money in making sure that sort of thing works because that is crucial to their business.” (Interviewee G)

Moreover, an exciting remark related to externalities such as the ongoing pandemic facilitating usage of cloud services as an advantage in times of crisis:

“I guess Covid has accelerated that. Our main customers, the Oil and Gas companies, have geologists working with high-end 3D graphics. Even though we have been working from phones and laptops for years, working from home with high-end 3d graphics with acceptable performance has been a problem, so some of our clients have been using one of our geologists' offerings, geo-cloud. They have been pleased to send their workforce home and continue business as usual, finding oil and optimizing production. Services we produce have been proving its worth now more than ever.”

(Interviewee A)

“For example, what is one on one discussion in Covid times? So that is something we can deliver to our clients with marketing, with best practice approaches in their system, so they don’t have to invent those things by themselves. The key thing here is that it is not just paper, or hype, or a thing you just think about. It’s a practical thing. There is an update. There is a best practice process, do it like this. Then integrate that practice and get benefits without spending much time thinking by yourself.” (Interviewee E)

The findings valued many strategic benefits. I was also able to delineate benefits occurring at the organizational level.