Cloud computing, transforming the game in Europe?

Cloud computing has all the ingredients of a true revolution in the way business, governments and individuals handle information.

Yet, contrary to most of the revolutions that preceded it, it lacks the ability to provide a real object that would symbolize it. The invention of the printing press produced books, then came automobiles, telephones, televisions, transistors, computers. All could be seen, touched and visualized. Cloud computing has to do with invisible flows (data) and processes because it is independent from the equipment and platforms it involves therefore it is much more difficult to describe, explain, and promote.

In such situations, new developments and possibilities, when still in their initial stages, tend to generate more fears than excitement, more defensive moves than adoption waves. Especially in times of economic and financial uncertainty, caution tends to prevail over audacity and ability to change.

One way to address such challenges before they become a roadblock on the path to innovation is to show that the changes considered contribute positively to solving long-standing issues and addressing unquestioned objectives. For policy makers and high-level decision makers in business and the public sector, documenting the linkage between cloud computing and national competitiveness is hence of critical importance to generate support, and prevent concerns (legitimate or not) to overtake enthusiasm about contributing to a major improvement in the way our societies can generate growth, jobs and better quality of life from information, intelligence and knowledge.

Showing how cloud computing can enhance national competitiveness is the purpose of the IMC2 project (INSEAD eLab-Microsoft Cloud and Competitiveness project) recently launched as a joint initiative between Microsoft and INSEAD. The core of the project explores linkages between cloud computing and national competitiveness and how this could be better identified, measured and strengthened.   As preliminary results start to emerge from this pioneering approach, one aspect seems of particular interest. It regards the human capital and skills aspects of cloud computing.

A perfect storm?

It is becoming clear that all organizations adopting (or considering to adopt) the cloud, whether public or private, acknowledge this technology as a tool for better management. In other words, cloud computing is not just regarded as a way to cut costs and access new resources and processes, but also as a transformative tool by which business strategies, business models, competition and innovation can be improved and qualitatively changed.

What is defining about this movement is that it offers new bases for transforming business, both internally and externally.

  • The internal business transformation that it has started to generate stems from recombining the fundamentals of business performance: cost reduction, better usage of resources, better alignment with core business, shorter time-to-market for innovation, finding new partners, accessing data and knowledge resources that were out of reach before – especially for SMEs -, adopting new business models. 

  • The external transformation of business includes elements such as broader and deeper market presence, mostly through innovation but also through better anticipation of global changes and trends likely to affect one’s industry or markets. 

This dual phenomenon has all the ingredients of the ‘perfect storm’ by which businesses and sectors could be entirely redefined. It is rapidly spreading to spheres as different as large and small businesses, central and local governments.

Europe, and the skills challenge

Identifying and mastering the most profitable aspects of cloud computing will require the development of specific skills at all levels of public and private organizations. Such skills will include for example the ability to think strategically across platforms, sectors and functions. It will also include a distinct capacity to identify new opportunities by which existing comparative advantages can be leveraged through cloud computing. This calls for innovative and curious minds that are able to spot relevant experiences from other firms, other sectors and other countries.

Can European businesses and public entities identify and mobilize such skills in the short run? If they do not already have them on board, how can they attract and keep them? How can private business, universities and governments cooperate to generate them? Thus are some of the questions that will need to be addressed rapidly, imaginatively and decisively if cloud computing is to fully play its role as a competitiveness booster and as a game changer in Europe, as it has started to do in other parts of the world.

The results from the IMC2 research will be released by the end of the year. Stay tuned!

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