At its simplest, cloud computing is a fundamental rethink of the entire Information Technology (IT) stack.

Seeing the new model

The pioneers are companies like Google and Amazon, whose IT systems look nothing like what has come before. Even their physical datacenters are wildly different, using outside air cooling, running the datacenters hot and building custom servers. These radical changes extend from the datacenter, through networking, storage and even to the types of people that Google and Amazon train and hire. In effect, this completely different computing model, “cloud computing,” which provides a dramatic opportunity across all industries.

"What the cloud is teaching us is that all businesses, large or small, is a technology business first and an industry specialist second."

Without cloud computing there is no Uber, Airbnb, Salesforce, iCloud, Xbox Live, Google, GMail or even Amazon. Our modern era simply ceases to exist without the cloud. This also means that new and old businesses are leveraging cloud to disrupt the existing incumbents. Airbnb challenges the hotel industry and Uber challenges the taxi business. It’s not just technology startups; large established businesses like Google are challenging telecommunications providers and the media industry. Everything is up for grabs.

Business 101

Cloud computing is profoundly disruptive in a way few can truly understand, but there is a commonality beginning to emerge: Cloud is ultimately about using IT for competitive advantage. The average business thinks of itself as a retailer, hotelier, constructor, financier or other industry “vertical.” What the cloud is teaching us is that all businesses, large or small, is a technology business first and an industry specialist second.

Your ability to embrace cloud computing and use technology to drive your business outcomes is central to cloud. Are you still spending money running your own email server? Stop. Don’t do it. Use Gmail or Microsoft Office 365 instead. Are you still running your own servers? Stop. Don’t do it. Use Amazon Web Services, Microsoft Azure or Google Compute Platform instead.

Staying fit

In the long run, the entire business community must move from spending 80 percent of their IT budget to “keep the lights on” to spending 80 percent of their IT budget for competitive advantage. Failure to do so ultimately leads to inability to survive.

This isn’t new. The first major disruption in modern times was the advent of electricity. Businesses that embraced it thrived and those who did not, died. That was followed by general purpose computing in the 1980s. Now, it’s cloud. Your business and its success depend on deeply understanding and adapting to a new cloud world. The bad news is it’s going to take effort, but the better news is that it opens up a whole new world of opportunity.