Projecting a $1-trillion dividend for companies that leverage the full capabilities of the cloud, a report from McKinsey & Co. says that massive prize might be just chickenfeed compared to when businesses begin fully deploying the cloud to drive “the adoption of emergent technologies such as augmented reality and blockchain.”
In Cloud’s trillion-dollar prize is up for grabs, a McKinsey article from earlier this year outlines the results of a study the firm conducted to determine just how valuable this new-fangled cloud thing could become.
While the article meanders here and there and can’t quite decide exactly what it wants to focus upon, it is full of interesting ideas, insights and projections, and I heartily encourage it for anyone interested in what I call the greatest growth market the world has ever known.
And if the projections offered in the article are even half-right, that “greatest growth market” thing will only get bigger and better.
Here are my 3 favorite excerpts from the article that summarizes the McKinsey study:
1. We’re only at the beginning.
More companies are starting to see the real benefits of cloud, which has been long heralded as a catalyst for innovation and digital transformation, thanks to its ability to increase development speed and provide near-limitless scale. While Moderna’s success illustrates the business opportunities that cloud makes possible, it only scratches the surface of the potential value at stake. A detailed review of cloud cost-optimization levers and value-oriented business use cases foresees more than $1 trillion in run-rate EBITDA across Fortune 500 companies as up for grabs in 2030…
2. CEOs: are you listening??
One of the big issues I pound on regularly here at Cloud Wars is that while it’s nice that the cloud can help trim some costs and boost efficiency, its real value is in unleashing innovation and growth. And the McKinsey study underscores that point rather dramatically.
“The value of cloud transcends IT and is estimated at more than $1 trillion,” the article says. It breaks down that figure into two chunks: “Rejuvenate,” which is valued at $440 billion, and “Innovate,” which is almost twice as large at $770 billion.
“Rejuvenate” includes IT cost optimization, risk reduction, core-operations digitization, while “Innovate” includes innovation-driven growth, accelerated product development and hyper-scalability.
Let me say it again: of course it’s great to lower costs and boost efficiency—but in today’s wildly disruptive and relentlessly changing market, those attributes become meaningless unless you are driving innovation—and lots of it—on the front end.
3. Three crucial steps to success in the cloud
The good news is that many companies across a range of industries have successfully implemented public cloud to achieve impressive results. These companies follow three best practices. First, they execute a well-defined, value-oriented strategy across IT and businesses and install a cloud-ready operating model. Second, they develop firsthand experience with cloud and adopt a much more technology-forward mindset than their peers. And finally, they excel at developing a cloud-literate workforce.
The article outlines some truly compelling research, and again I urge everyone to check it out: Cloud’s trillion-dollar prize is up for grabs.
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