Cloudonomics: The Business Value of Cloud Computing, + Website

Agility

The world is becoming more turbulent, and, consequently, yesterday’s core competencies may become tomorrow’s “core rigidities.”5 The sense that the world is more turbulent is not just a feeling; it can be measured in a market sector by examining shifts in relative market ranking from year to year. MIT Sloan School of Management professors Andrew McAfee and Erik Brynjolfsson, leading researchers at the intersection of IT and business, have found that not only has turbulence been increasing over the past decades but that it is dramatically greater in “high-IT” industries.6

These days, more and more industries are becoming high IT. The percentage of CIOs who recognize that IT is an essential part of their company’s product or service is growing. Over a third of CIOs surveyed by InformationWeek Analytics said that “introducing new IT-led products and services” is among their top priorities.7 Conversely, only 17% said that IT has no role in innovation. Beyond classic cloud examples such as Netflix or Zynga, even century-old companies are investing in cloud-based services enhancements to physical products: BMW is investing in mobile applications that provide information on parking availability and real-time traffic, thus detouring from the autobahn to the infobahn.8

As a result of increased incorporation of information technologies in products and services, we have entered an accelerating global race: Increased software components in the product increases the speed of change—a ...