Building A Cloud Business: Very Little Assembly Required

Author

Joe McKendrick, Contributor

September 29, 2014

The “transformational” age of cloud — in which existing applications are moved to cloud — has been well underway for some time. What really has peoples’ attention now is cloud’s second act — for re-imagining business. Innovators can pull together online resources that meet just about any business need, and assemble new types of businesses. This has captivated the interest of investors.

Michael Skok, partner at North Bridge Venture Partners, for one, says the growing cloud infrastructure — both inside and outside enterprises — is giving rise to new forms of businesses that were previously unimaginable.  “Uber is an example of something that would have impossible without cloud,” he said at a recent industry panel discussion.

Skok was joined in the discussion, which explored ways technology is reshaping businesses, by Brook Colangelo, executive vice president and chief technology officer of Houghton Mifflin Harcourt. The panel, led by Vala Afshar and Michael Krigsman at a recent CIO conference, explored ways technology can add value to business imperatives. (Vala provides a summary here.)

The future of organizations and their technologies is being built on services, Skok stated. “People want everything available as a service and the cloud is an efficient way to get to outsourced services,” he said. He called it “outservicing” — going to online services to accomplish non-core functions, such as HR.  This is the core of innovation, since new types of services — and businesses — can be built on top of the many existing cloud services now available.

“People are expected to be able to get to those outsourced services efficiently. The answer is the cloud,” said Skok. As a venture capitalist, he pointed out, “I’m looking for any part of the potential body chain of any business that can be created as a cloud service. Where I really get excited is when you can enable things that were not possible.”

The possibilities of cloud aren’t just there for the Ubers of the world. Older, established businesses such as Houghton Mifflin Harcourt (a publisher established in 1832) also are diversifying their product portfolios into the cloud. In the process, business is being accelerated. Gone are the days when customers would be satisfied with product rollouts paced every 18 months, said Colangelo. “We’re an agile life now. The entire world is built on this agile mentality now. When I ask for storage, I want to know when am I getting it. Not when will I define my requirements, when will we sit with them, when will we issue an RFP. Right now, if I want storage, I open the app store and I would look for a storage app. This is cascading everywhere.”

Many these resources are now ready and available that can be applied and re-combined to innovations not possible before. “There are 11,000 APIs today,” Skok said. “I say stop and think about avoiding developing something, and recombine what is already there or create something that is already available to you from the cloud.”

The availability of APIs is changing the way even the most well-established businesses. When my customers have requests on features and systems, I don’t have to build them,” says Colangelo. “I can always use an API to plug into somebody else who’s already done it. I can do this faster and respond a lot more agile, and do this through those users eyes to do it a lot quicker.”

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