We know the world is becoming increasingly digital. All the movies you used to rent can be watched on Netflix, there are no requirements to go to a bank, grocery shopping can be done online, and even one can do their master’s degree online. The new digital economy has drastically changed our day to day lives. To enable businesses with these new digital disciplines, businesses are focusing on how do they create and deliver service requiring IT to play a crucial role.

Let's identify what value cloud brings to the business. We will identify how Cloud computing at its fundamental level can be thought as the new way of performing IT. IT has traditionally been delivering tactical systems for an organisation, e.g. a telephone system. Let’s categorise such system as tactical systems because it acts as a hygiene factor. Its presence does not add any revenue to the organisation’s top line however its absence creates a huge impact.

Tactical, Strategic or Existential?

So, let’s understand what other types of values Cloud can bring to the business. Cloudonomics categorise these values under three categories

Tactical Strategic Existential

Strategic systems are those systems that will bring extra value to the business, e.g. recommendation engine on Amazon and Netflix are likely to increase the revenue to these companies and can be considered delivering strategic value.

Google, Facebook and Uber are some excellent examples where their fundamental IT systems are hosted on Cloud and are the reason for their existence. Without the scalability of Cloud, it would be impossible to imagine their business model.

Looking Forward