Rethinking Your Business Model with Cloud Mark Tomlinson CTO Cloud Computing, IBM UK & Ireland
The digital revolution Pacesetter characteristics Reinvention with cloud Partnering for success Start today
The combined impact of new technologies is profound, driving radical innovations in business regardless of the state of the economy Disrupted industries Social media explosion User generated content Organizations subject to instant critiques Collaborative buying and revenue sharing Mobile revolution Power of Analytics Location-based services Personalized consumer service Mobile wallet turns dollars digital Integrate internal / external data sources Miniaturization of mobile devices, from palm-sized to wearable Big data and predictive analytics Retail Entertainment Transport Financial services Healthcare Manufacturing plus many others Cloud Enablement Subscription access to enterprise applications Cross-platform on-demand content Boundary-less computing 3
Business model innovation is also occurring inside value chains with open platforms and data radically disrupting whole industries Value chains will fragment Industries will converge New ecosystems will emerge Inbound logistics Design and operations Outbound logistics Marketing and sales Consumer experience Margin Healthcare Distribution Electronics Inbound logistics Inbound logistics Inbound logistics Operations Operations Specialist Operations Outbound logistics Outbound logistics Outbound logistics Marketing and sales Marketing and sales Marketing and sales Consumer experience Consumer experience Consumer experience M M M Retail Inbound logistics Operations Outbound logistics Marketing and sales Consumer experience M Next generation value chain disruption will involve fragmenting established value chains and contesting specific functions Functional specialists from one industry will begin competing in specific value chain functions of other industries Ecosystems will typically cut across multiple organizations, functions and industries, providing a foundation for seamless consumer experiences New entrants empowered by rapid access to capabilities and services with consumption / benefit- based commercial models 4
Organizations leverage digital capabilities and connectivity to enable new business models and create new revenue opportunities Organizations transition from intense focus on operating costs toward growth and transformation 1 New business models are impacting organizations and industries Reduce operating costs Reinvent customer relationships Change current business model -32% +21% +41% 64% of executives believe new business models will impact their industries more profoundly than ever before 2 Embrace new technologies +19% Anticipated change (%) between previous 3 years and next 3 years 37% of executives say new disruptive business models will be the biggest organizational impact on their companies 3 Sources: [1] 2013 CEO Study Q5: What are the top priorities in your business strategy ; (n=4183); [2] 2013 Global Digital Reinvention Executive Study Q12: Please rate the extent to which the following trends will have an impact on your business (n = 1089); [3] 2013 Global Digital Reinvention Executive Study Q24: What is your biggest organizational change likely to be caused by digitization? (n = 1090); 5
Most established organizations have not begun preparing for the radically different environment ahead Challenges to implementing a digital strategy 1 Lack of cohesive strategy 65% Other competing priorities or initiatives Undefined return on investment measures 51% 50% Lack of appropriate technology Legal and security concerns 38% 36% Lack of leadership support 28% Source: [1] 2013 C-Suite Study, CEO POV B5: Which of the following are the most significant challenges to implementing a digital strategy within the enterprise? (n=4183) 6
The digital revolution Pacesetter characteristics Reinvention with cloud Partnering for success Start today
To learn how new digital capabilities are impacting organizations, we surveyed 800 decision makers, asking them to categorise themselves as pacesetters, challengers or chasers within their industry Revenue 2009-12 CAGR Gross profit 2009-12 CAGR Pacesetters 12.7% 15.3% 12.7% Challengers 6.6% 9.5% Chasers 6.8% 6.4% Pacesetters vs. Chasers 1.9x 2.4x How would you categorise your organization? Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation (n=800). Revenue and profit information taken from public sources. Respondents spanned 13 countries and 24 industries, with 50% in IT and 50% in LOB. 8
We have found three key characteristics that set pacesetters apart from their competitors Partnering is in their DNA Analytics is their fuel Integration is their breakaway move Leveraging skills from the ecosystem Pacesetters run their enterprises on insight CAMS 1 integration for greater effect Source: IBM Center for Applied Insights 2014 Raising the game: The IBM Business Tech Trends Study (n=1447) [1] CAMS Cloud, Analytics, Mobile and Social Technologies 9
Partnering is in their DNA exploiting the API Economy as likely to use start-ups for help with project execution as likely to use academia to help develop products as likely to engage citizen developers Science & Technology Facilities Council, encore and IBM HPC-as-a-Service Source: IBM Center for Applied Insights 2014 Raising the game: The IBM Business Tech Trends Study (n=1447) 10
Integration is their breakaway move - delivering an even bigger punch by combining CAMS 1 technologies 4-7x More likely to use cloud to deliver mobile, social, and big data & analytics More likely to deliver social business via mobile More likely to use mobile analytics Source: IBM Center for Applied Insights 2014 Raising the game: The IBM Business Tech Trends Study (n=1447) [1] CAMS Cloud, Analytics, Mobile and Social Technologies Monitise partners with IBM cloud, commerce and analytics to transform mobile payments 11
The digital revolution Pacesetter characteristics Reinvention with cloud Partnering for success Start today
Think cloud is just an IT obsession? Business leaders disagree Cloud is extremely important to overall business success LOB s strategic interest in cloud will soon surpass IT s and it spans virtually every area of the business Today In three years 72% LOB 112% increase 58% 49% 34% IT 18% increase Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation Cloud was defined as encompassing application, platform or infrastructure as a service as well as private, public or hybrid delivery models. 13
Looking forward, how will Pacesetters continue to stay ahead? Most valuable capabilities for the cloud of the future Industry-specific platforms: Cloud platforms with applications and computing environments designed specifically for their industry Pacesetters Chasers 27% 57% (Even bigger) big data: Access to and management of vast data stores they can t get to now Pacesetters Chasers 50% 59% Product/service building blocks: Easy-to-assemble industry or business service components they can use to construct new products or services Pacesetters Chasers 38% 60% Source: IBM Center for Applied Insights Under cloud cover: How leaders are accelerating competitive differentiation 14
Hybrid cloud enables the composable business powered by open technologies Reinvent and innovate your processes Make better decisions with real-time actionable insights Accelerate your time to market with continuous delivery (DevOps) Integrate across the enterprise Delivered on- and off-premise 15
Infrastructure matters for cloud deployments Resiliency (Still) Matters Responsiveness Matters Efficiency Matters As they struggle to become more agile, IT leaders know there can be no compromise on business operations Infrastructure automation minimizes friction between development and operations, facilitating continuous integration and deployment Continue to optimize the economics of IT through infrastructure efficiency and optimised commercial models Source: IBM Institute for Business Value The IT infrastructure conversation new content, new participants, new tone (n=750) 16
The digital revolution Pacesetter characteristics Reinvention with cloud Partnering for success Start today
You need a partner that s helped tens of thousands of clients to.. Think it. Strategize how to use cloud to drive revenue growth and efficiencies. Build it. Build and run your private or hybrid cloud. Tap into it. Utilize services delivered from IBM s cloud. 18
IBM offers an unmatched selection of systems, automation and experience to help establish your own hybrid cloud platform 3x Productivity improvement when managing Software Defined Environments 50% Reduced IT labour costs with IBM cloud infrastructure 20x Faster processing ability with IBM cloud servers 19 Source: Based on the results of multiple client engagements Live demos of IBM s hybrid cloud orchestration platform today! Nationwide (US) reduces power, cooling & space by 80% and makes $15m of savings over three years with IBM zcloud
IBM SoftLayer offers global access to a powerful cloud environment data centers worldwide Bare metal, shared or managed $1.2B Investment 40 data centers, 15 countries, 5 continents London South Bank University moves its IT infrastructure to IBM SoftLayer and implements Smarter Education solution 20
The digital revolution Pacesetter characteristics Reinvention with cloud Partnering for success Start today
See how cloud can help you improve your competitive position and catch up with the pacesetters Partnering is in their DNA Analytics is their fuel Integration is their breakaway move IBM s Cloud-enabled Business Model Accelerator aims to help clients envision new business models using cloud s game changing enablers in around 4 weeks Business objectives: Prioritize competitive differentiators to tackle via cloud Cloud strategy: Drive enterprise responsiveness through holistic strategy Cloud technology: Align platforms to business objectives 22
If you d like to learn more recommended reading Digital Reinvention Business Tech Trends Study Under Cloud Cover 23 Links posted today @markrtomlinson
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