The article by Bala Iyer and John C. Henderson titled “Business Value from Clouds: Learning from Users” discusses six benefit patterns of cloud computing, and further identifies five business-related strategic risks that can be managed effectively using cloud computing. The first benefit pattern is that cloud computing results in increased business focus. Cloud computing has allowed companies to focus almost entirely on their evolving business requirements while their IT capabilities are being constantly enhanced by cloud computing services providers (Iyer and Henderson 52). Secondly, cloud computing offers a reusable infrastructure as it can be customized to meet new demands. Thirdly, it provides collective problem-solving, especially because of the economies to scale in reducing costs. Multiple users can share data and processes owned by the vendor. Fourthly, it allows business model experimentation as customers are capable of developing their own applications on the existing platforms. Fifthly, it allows the orchestration of dependencies, whereby users can exchange or share their applications with other partners for mutual benefits. Finally, cloud computing creates a Facebook effect, that is, it encourages generation of content that is user-driven and allows the gathering of behavioral data that is key to business success.
Cloud computing can also be useful in managing business risks. Firstly, it is essential in managing demand risks as its services are elastic, and users can choose for what they have only used. Secondly, its economies of scale have helped manage the inefficiency risks, as the costs are shared across many users. It has allowed users outsource their infrastructure and even entire processes, which reduces their investment risks and operating costs (Iyer and Henderson 55). Thirdly, it has minimized innovation risks by allowing users access a variety of innovative applications and solutions from other users and third-party developers. Fourthly, it manages the scaling risks as its capacity can be expanded exponentially and efficiently to meet market growth. Finally, it is useful in managing control risks as user interface requirements can be customized while allowing interoperability across various user platforms.
The article provides recommendations that can be helpful to chief information officers (CIOs) who are developing their cloud strategy. To realize maximum benefits from cloud computing, the article advices CIOs to initiate strategic and fast experiments. This would enable an organization manage innovation risks and identify new technologies that matches its internal capabilities. Secondly, it advices users to minimize demand and efficiency risks by participating in cloud computing communities. Therefore, establishing a cloud community would help CIOs get answers to most of their questions about cloud computing services. Thirdly, it advices CIOs to closely examine the IT architectural capability of cloud computing infrastructure to evaluate its interoperability with its own applications before deciding which to adopt. It also advices CIOs to embrace the role of a business architect, in which the employees who will be using the system are actively involved in customizing the business’ architecture to maximize efficiency and adaptability to future use. Finally, it advices organizational strategists to consider the economics of networks when developing cloud strategy. This would ensure that the adoption of the cloud strategy has meaningful impact to other parties that the business in interacting with in its operations, for instance, streamlining transactions with suppliers and third-party entities.
The article is in-line with the course concepts that cloud computing is essential in providing businesses some competitive advantage over their worthy rivals (Aljabre 236). It is also evident behavioral data-gathering capabilities and the analytics functionalities are at the core of cloud computing and its benefits to businesses. Cloud computing is clearly instrumental in reducing a company’s initial investment costs in technological infrastructure, thereby allowing it to direct its efforts in meeting changing business needs and requirements (Furht and Escalante 35). The elasticity in cloud computing makes it adaptable and suitable to a wide range of businesses, from small startups to large corporations (Furht and Escalante 35).
The article has mainly focused on the benefits of cloud computing to businesses while ignoring the challenges that businesses face in developing and implementing cloud strategy. For example, it has not addressed the issues information security and privacy in cloud computing, considering that users share most cloud computing storage and processing resources (Metheny 71-72). Furthermore, it has not highlighted the trends in cloud computing, for instance, the increasing demand, use, and innovation in mobile-based cloud computing technologies, such as the increasing use of smartphones and tablets.
It is evident that organizations would increasingly develop and implement cloud strategies because of the greater benefits they can realize from it. Cloud computing is becoming an integral strategy of improving an organization’s competitiveness. Therefore, an organization’s overall success would be significantly be determined by how it maximizes on the benefits realized from cloud computing.
Some organizations are successful in developing and benefiting from cloud strategy because of their ability to match their strategic goals and organizational capabilities with the opportunities provided by cloud computing services. For example, determining the most appropriate IT architecture is critical in ensuring interoperability between cloud infrastructure and business applications. Businesses that fail to consider these conditions or factors would probably fail to capitalize on cloud computing, thereby losing their competitive advantage because of inefficiencies and high operational costs.
Aljabre, Abdulaziz. “Cloud computing for increased business value.”International Journal of Business and Social Science 3.1 (2012): 234-239.
Furht, Borivoje, and Armando Escalante. Handbook of Cloud Computing. New York: Springer, 2010. Internet resource.
Iyer, Bala, and John C. Henderson. “Business value from clouds: learning from users.” MIS Quarterly Executive 11.1 (2012): 51-60.
Metheny, Matthew. Federal Cloud Computing: The Definitive Guide for Cloud Service Providers. , 2013. Internet resource.