Hey! You! Get Off of My Cloud!

I recently posted a tweet “Apple unveils iCloud storage, new operating systems...let the games begin”. I received this tweet back from a Finance leader at a F500 firm:

"OK, Sean for us finance dorks - what does this mean to my bottom line and those of my customers?" - John H.

Here’s what’s happening:  Apple is trying to cut off Microsoft and Google before they make serious headway at the device level (phone and tablet), and drive up switching costs before the equilibrium in the device occurs (which will happen). This will also help differentiate them against Amazon. WhileRolling Sones - Get off of my Cloud! Amazon can provide cloud storage, there isn’t much to store at this point that consumers would actually buy from Amazon so it will simply drive the cost of doing business without driving much incremental revenue (little or no music, photos, videos, etc).
These four companies are colliding in a huge way. And in almost every market, only two major players can last profitably. It will be an interesting war, especially since all are too large for one to actually acquire one of the others.  And the battleground will be in the cloud, at your device (tablet and Smartphone…RIP laptops) and the offerings (apps, services, etc). Of course the first casualty has been Blackberry. While mine is not yet a Beast of Burden, sadly, its days as a leader are fading quickly as its market share has been cut in half over the last two years. Every day they wait to make a bold move will move them from tattered to shattered.

Here’s what it means to you and all consumers:  Accelerated innovation, heightened customer experience, stable technology, choice, flexibility, accessibility, and simplicity all for less money. This will be a really fun time for the consumer. Once people try it, wild horses couldn’t drag them away.

What does the cloud mean for your company and its customers?  This innovation will provide small, mid and large customers the same benefits along with agility, operating efficiencies, easier collaboration between suppliers, partners and customers if you are quick to adopt and apply a point of differentiation. I was recently in a meeting with CIOs discussing the cloud – two companies in the same space. One company is launching a three-year plan to move to a cloud configuration. This will drive 40% of the cost out of the IT organization, and they are re-investing this back into new offerings (development and acquisitions). The other company is simply trying to improve short-term cost and only yielding 8-10% savings. Most of this saving is being pushed to the bottom line (shareholders). It’s a pure low-risk, short-term return. All other things being equal, in three years a clear point of separation will occur. That should give finance leaders some satisfaction.

And while you finance dorks can’t always get what you want, I hope this time, you get what you need.

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