Born, or born again, on the cloud

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Last updated 05:00 03/02/2015
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COMPETITIVE ADVANTAGE: The cloud gives business, IT and development leaders the speed and flexibility to match the pace of business with economics they can afford.

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New startups are rising at a rapid rate and undermining existing vendors or disrupting industries - Netflix did it to BlockBuster, Uber and Lyft are trying to do it to cab companies, Spotify and Rdio are doing it to the radio and general music world. Looking at these examples it would be easy to think that the future is very dire indeed for existing organisations.

The truth is a little more nuanced than that, and relates to innovation and agility.

Rod Drury, CEO of unquestionably our best known tech company, Xero, often quotes his favourite line, "It's not the big that eat the small, it's the fast that east the slow."

While cloud and its related technology themes are but part of making an organisation "fast" as opposed to "slow", it is a fact that cloud gives business, IT and development leaders the speed and flexibility to match the pace of business with economics they can afford. It enables new business models and digital services that can be composed and integrated together to transform the user experience, accelerate growth and deliver unique competitive advantage.

So what does it take to make a great cloud-based company, whether that company is born on the cloud, or uses the cloud to reinvent themselves? What traits do 'born on the cloud' companies demonstrate that existing organisations can learn from?

These 'born on the cloud' companies represent a new phenomenon within business. They arose as the result of a new method for acquiring IT infrastructure, but have quickly evolved to embody a new philosophy for operating a business. The thesis here is that a cloud-based company demonstrates traits both of a technological, and of a cultural nature.

So what attributes do they demonstrate? They tend towards:

* extensive use of cloud infrastructure and applications (from infrastructure to email, from project management to accounting)

* an unconstrained mindset - no conventional thinking here!

* flat corporate structures - no corner offices or inflated egos allowed

* customer focus - since many businesses are moving to subscription-based models, they have to be extra focused on the customer. If your customer can switch off your service on a month by month basis, you have to keep them happy

* a flexible workforce, often distributed - hire the best, most multi-skilled people, wherever they may be

* a flexible mindset and willingness to take risks (and to sometimes fail)

* considering themselves as part of a broader community and a heavy reliance on partnering

* thinking with a global mindset.

Start-ups are creating and using a new set of business processes - if not an entire business philosophy - that sets them apart from traditional organisations. It's a philosophy that is proving to be highly successful, in ways that were often unimaginable before they first appeared. At the heart of this philosophy is the belief that just because a process has always been executed in a particular way, this does not mean it is the best way.

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This has resulted in a range of new approaches to doing business: everything from the technology platforms used, through to attitudes towards risk and how staff are incentivised and remunerated. And it has led to a variety of new approaches to tackling age-old problems, resulting in a wide range of new and innovative services.

Cloud is certainly a way of doing technology, but more importantly it is about a fundamental shift in the way a business operates. Whether you're a new organisation, or an existing one, absorbing some of this "cloudy" way of thinking will help secure your future.

Companies like Xero show us what cloud in the context of a technology company can do. In the next article we'll take a look at cloud in some unexpected places.

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