Is Bigger Better? Not with the Cloud on Your Side

Is Bigger Better?

Growing up, bigger almost always equated to better. The bigger kid hit the baseball farther, threw the ball faster, shot the hockey puck harder and usually won the fight. In school, we were taught that larger companies were better than the smaller ones. Bigger, meant better economies of scale, more market share and, efficiency and larger, more profitable revenues.

bigger-company

As a businessman in today’s economic environment, I see things differently. The smaller, more agile companies are disrupting the market, innovating without the baggage of the larger companies, reducing barriers to entry by leveraging cloud services and social media, thereby causing headaches for the larger, slower moving companies. Research provided by Innosight and referenced by Richard Forester, shows that Fortune 500 companies are turning over or going bankrupt at an alarming rate. More than 50 percent of the Fortune 500 had been eliminated from the list since 2000.

Forester states the life span of a corporation is determined by the following three principles:

1. Running operations effectively.
2. Creating new businesses which meet customer needs.
3. Shedding business that once might have been core but now no longer meets company standards for growth and return.

Balancing three of these principles can been quite difficult, especially for a large company. Creating new business, while trying to maintain operational excellence of existing business is tough to do and we all know about the companies that did not shed core business to seek new opportunities—Kodak, Blockbuster…enough said. While this is all true, companies were able to somehow to maintain dominance for a much longer period than they are now as depicted by the following statement: “Fifty years ago, life expectancy of a firm in the Fortune 500 was around 75 years. Today, it’s less than 15 years and declining all the time.” So, what changed to cause this drastic shift in power?

What did not exist 50 years ago was the rapid pace of innovation, ease of taking an idea to a business almost instantly, direct reach to customers and agility to move at lightning speed that now comprises the DNA of today’s business environment. Companies build upon these genes are disrupting the market, constructed from the ground up to execute with excellence and meet customer demands, while remaining agile to change business strategy at a moment’s notice.

How are they doing this?

Businesses are leveraging the cloud and its three main services; Infrastructure as a Service (IaaS), Software as a Service (SaaS), and Platform as a Service (PaaS). IaaS provides these companies with an instant, on demand platform for their servers, storage and backup. No big capital expense is required; merely a monthly payment for what is used.

SaaS provides access to business application, such as Salesforce, email, accounting applications and customer relationship management (CRM) applications, all without having to hire people to manage these applications or the infrastructure upon which they reside—another pay as you go model, allowing minimal up-front investment.  PaaS allows these companies to leverage existing infrastructures for application development, reducing the cost and complexity of managing these environments in-house, also enabling the ability to quickly move new features and code from development to test to production. For example, Amazon adds a new feature every 10 seconds while its competition takes seven to nine months. Now that is a competitive advantage.

competitive

As you can see, these new companies have all of their needs taken care of for a monthly fee, and can keep their employees focused on the core needs of the company. The on-demand nature of the cloud gives them the agility they need while access to cloud-based social media such as Twitter, Facebook and Linkedin, gives them instant access to their customers, enabling instant feedback on their product ideas, allowing them to quickly address customer demand. Additionally, crowd-funding sites, such as KickStarter and Indiegogo allow an idea to become a reality in months. No longer do companies need to write a 50-page business plan, seek investment funding, test market and then deliver a product. The barriers of entry to a market have been eliminated by the Cloud and its’ benefits.

This is not to say that all big companies are doomed, but they should take a page out of the book of these disruptors; leverage the cloud for the transformative technology it is, capture its benefits, continue to innovate at a rapid pace, never rest on your laurels and stay in tune with your customers’ ever-changing needs.

Marc Malizia

Or Lenchner

Destination IPPN: why the travel sector must harness a global IP proxy network

Destination IPPN While massive growth in the travel sector has been predicted, the digital environment has also massively upped competition amongst service providers, keen to ...
Miha Kralj

SaaS Native – Design, Delivery and Management of Applications

Going cloud native, the right way Moving from a traditional IT organization to one that’s cloud native is an inevitability for all businesses. This is ...
Signal Messenger: How to Successfully Resist Wiretapping Attempts

Signal Messenger: How to Successfully Resist Wiretapping Attempts

Successfully Resist Wiretapping Attempts Against the backdrop of events in the US, the popularity of the Signal secure messenger has grown sharply - from 6,000 ...
Employees Digital

A Winning Data Strategy Series Part 1: Off to a Faulty Start

A Winning Data Strategy Series This is the first piece of a 5-part series on plugging the obvious but overlooked gaps in achieving digital success ...
David Discenza

Four Ways to Improve Cybersecurity and Ensure Business Continuity

Four Ways to Improve Cybersecurity Cyber-attacks on businesses have become common place. In fact, it’s estimated that a cyber-attack occurs every 39 seconds. Who are ...
Sergey lypchenko 

The Top 7 Latest DevOps Trends to Follow

DevOps Trends to Follow Awareness of the latest DevOps trends is important for companies which consider the integration of DevOps into their development processes as ...
Hair Loss.png