weigh points and a clear destination are required to be successful.
Cost, time and resources all are important factors that must be
considered. The first step in this transformation should focus on
getting beyond the firewall and gaining control of the data generated by your products. Harnessing the power of cloud technologies is critical in taking this first step.
Why You Need a (Better) Cloud Strategy
If you’re like most companies today, you probably need a better cloud strategy. In doing so, development cost should not
be the primary driver. Planning for this transformation requires
an understanding and balancing of cost, time, resources—and
most importantly, risk—to maximize the return on investment
of a product.
The business philosopher Peter F. Drucker identifies four
kinds of risk:1
The risk that one cannot afford to take is missing the market
window. Virtually all product-based companies are jumping into
cloud-based strategies. Some will win, some won’t. However,
the early mover advantage in this area could prove to be insurmountable. Launching (or re-launching) your product within the
increasingly short market windows for cloud-based products and
services will determine whether or not the market opportunity
can be capitalized. Introducing a product or service after the market window has closed, or even just late in the market window,
can be financially devastating. Today’s disruptive technologies
have narrowed the market launch window to such an extent that
total loss of market share is a possibility. And, meeting market
windows has become increasingly challenging.
According to a study by McKinsey & Company, in market-window-constrained opportunities, being late to market with
product introduction incurs, by far, the greatest direct profit penalty across the product life cycle while development cost overruns
have little overall impact, as shown in Figure 1.2 (The lower three
bars in Figure 1 come from McKinsey & Company, representing
averages, while the top bar represents the disaster scenario.)