CEO Perspectives 1: Surprise Benefits

Recently the Harvard Business Review reprinted an article by Andrew McAfee titled: What Every CEO Needs to Know About the Cloud.   McAfee is a principal research scientist at MIT who studies how technology is changing the business world.  In addition to providing a clear, concise introduction to cloud computing for a CEO, McAfee suggests that we don’t really know all the implications of cloud computing, and he points to a number of benefits that might come as a surprise.

To shake us out of our old habits of thinking, McAfee compares the shift from traditional IT into the cloud to a shift that took place in factories a century ago when steam power was replaced with electric power.  There were real costs involved in such a fundamental change: completely rebuilding production lines, buying and installing new equipment, and retraining or rehiring staff.  At a time when power was distributed mechanically from a central steam engine, few people could envision a factory where each tool has its own built-in electric motor.  Now it’s impossible to imagine ever going back.

In the same way, argues McAfee, the benefits from cloud computing often come in ways that exceed expectations.  He gives an example of a global contracting firm that implemented a cloud solution to provide remote access to reference data like estimates, blueprints, and images.  The time savings on data retrieval were substantial, and yet the company soon found out that a major bottleneck had been unexpectedly eliminated as well.  Before, to collaborate on such projects, an engineer would have to wait for the IT department to add the new user, give clearance for the FTP server, and provide space.  With the cloud system, the engineer can quickly enter the necessary access information and bring in a new collaborator right away, eliminating costly delays.

The article discusses other benefits of using a  cloud-based system, including providing an enterprise-wide platform for collaboration, opening new opportunities for data mining previously considered impossible, and readily enabling a space for development and hosting of new applications.  In summary, McAfee says that the cloud “allows companies to increase the scale and power of their IT and the speed at which it can be accessed and deployed.  It eliminates administrative headaches and works across locations, devices, and organizational boundaries.”

So how do these CEO perspectives apply to real-time data?  We’ve already discussed some of the benefits to expect from putting real-time data on the cloud.  What additional advantages does this new article suggest?

From our perspective, it implies the value of providing instant access to live data in real time to users in a collaborative environment.  It hints that data mining opportunities may open up when the coming “Internet of things” is connected in real time.  It leaves us wondering what would happen if an IT department could take even a part of the 89% of IT resources currently spent (on average) for infrastructure and maintenance and divert it to projects like creating seamless interoperability among all of a plant’s legacy equipment.

It is a little too soon to know exactly what to expect.  Those who implement early will be the first to find out.  And as the technology of cloud systems for real-time data matures, they will be well postioned to reap the benefits.