Saturday, February 26, 2011

Advantages of Cloud Computing– Part IV – Reduced Cost

Now the subject of interfacing vs. integration might not seem important to you at the moment, but think about it. Walmart ‘integrates’ with their suppliers in their on-going commitment to provide their common customers with ‘everyday low prices’. The key phrase here is ‘common customers’, because Walmart sees themselves as a conduit for their manufacturers and suppliers to deliver their products to their customers. Walmart’s customers are their supplier’s customers, plain and simple. The result of these partnerships eliminates an enormous amount of cost in the supply chain process.

One of the greatest disadvantages Americans have in regards to technology is decision makers are more interested in investing in what everybody else has instead of what advantage a technology may give them over their competitors. This is why it takes us so long to catch up. It’s the main reason it takes ten years for anything new to gain public acceptance. But, every problem creates an opportunity for someone, and the decision to put off investing in the Cloud is giving competitors with greater vision a huge advantage over the rest of us.

It’s obvious, the bulk of American business people don’t possess the advantages of ‘market leaders’ like Walmart, and instead of competing, they resign themselves to operate within an environment their market leaders created, never making the slightest attempt to knock them off their throne.

In an article we mentioned in our book, we quoted Andy Grove, the chairman of the Intel Corporation, when he said, “Classical competition theory doesn't address situations like this. In fact, it implicitly assumes that the environment in which a company operates is basically a given and limits itself to suggesting ways in which a company can better its lot IN THIS ENVIRONMENT.”

It doesn’t have to be this way. Cloud Computing has opened up a whole new world and it’s taken ten years to earn the attention of the main stream media. Remember when computers first popped onto the scene? It took ten years before they gained national acceptance, and during that time, companies like Walmart built their empires on the backs of retailers who refused to change. It makes one ponder… who will be the next Walmart? Do we even dare to explore that question? Of course not. We are too busy struggling to better our lot in the environment Walmart created, when the keys to the vault were thrown on the floor for us to pick up over a decade ago.

Many of the businesses we have spoken to report back they are doing ‘many’ of the things that can be done with Cloud Computing, but at what cost, and at what level of efficiency, and most important of all, what’s next? Let me put this in a different perspective. If one is to exhaust all of their resources reaching a certain goal, only to have to go back and do it over again each and every day, how do they ever hope to advance past that point? 


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