The concept of cloud computing has tremendous advantages for organizations of the future. Organizations can use cloud computing to save cost and time that are usually involved in the implementation and development of the traditional software. It has been observed that leading organizations spend a substantial amount of time on the upgradation and maintenance of the traditional software that adds to the cost of the organization. The IT department usually spends the majority of the time in the planning and the implementation of software so as to improve the operational efficiency of the organization. However, the role of IT in making operations easier and efficient for the organization takes a back-seat due to the huge time consumed in the implementation decisions of the traditional software in organizations. The founders of Apprio realized this gap and therefore decided to launch an innovative company that was based on the concept of cloud computing. The company ensured that it did not use traditional software for any of its operational activities. The company used modern cloud based computing applications for all its operational activities. The concept of cloud computing has the capability to make organizations highly efficient in terms of operations and cost. The time saved by organizations through the implementation of cloud computing can be utilized for core competence activities. Organizations that are early adopters of this technology are likely to develop a competitive edge over others. The present case study is a tool to understand the utility of the concept of cloud computing to enhance the efficiency of organizations.
- Analyze the approach of Appirio's founders in recognizing the entrepreneurial opportunity for their venture.
The founders of Appirio have worked for traditional software companies such as SAP, Borland and WebMethods and had realized the burdens that traditional software put on the businesses. These traditional softwares are known to be quite complex in their implementation and integration and thus require a substantial amount of time and energy in implementation by the organization. The traditional software requires upgradation and maintenance from time to time that requires companies to invest time, money and resources in the software maintenance, upgradation and the implementation activities. According to the founders of Appirio, the main aim of IT is to bring convenience and innovation for businesses, but the traditional softwares do not serve this purpose and were instead a huge burden for companies. The complexity and cost of developing and implementing IT systems made it a difficult task for the companies rather than the role of IT in bringing convenience and business innovation. In most of the global organizations, the IT department had to spend 80 percent of the money on the management and maintenance of the existing operational software. IT department spent a lot of time (weeks to months) in the planning for the upgradation of the existing software and therefore little scope was there for business analysts to predict the advantages of new software for the organization. This affected the overall efficiency and the productivity of the organizations. The thought about a software as a service to allow companies to spend less time in the software development, maintenance and infrastructure cost, made the company owners think about Appirio.
Appirio was launched as an IT service that offered low cost and agility for organizations. The company was launched to be the first company that provided cloud based computing system for medium and large enterprises as the cloud computing was initially used largely by small businesses. The cloud based computing system was designed to reduce the software costs of the companies with no need for heavy infrastructure for IT and thus plenty of time for other activities such as innovation in products and services.
- Analyze the technology, industry & competitive environment that Appirio is presently in. How do you expect this change during the next few years? Why? What does Appirio bring?
In the current competitive environment, other IT players such as Accenture and IBM have vested interests in the traditional, expensive and waterfall-style implementations. Both IBM and Accenture offer cloud services and consulting but they also offer traditional service systems. It is uncertain if the sole focus of Appirio on cloud computing may hamper its prospects.
However, this scenario is likely to change dramatically over the next few years as cloud computing has the advantage of low costs and fast implementation that allows businesses to concentrate on the operations, product and service innovations and not solely on the technology implementation. The agility of cloud computing allows developers to easily modify the software according to the changing environment. Agility is defined as the ease with which the software developers can modify a computer program to cope with the changing requirements . The first generation of cloud computing has been not sustainable enough and therefore companies are adopting hybrid solutions that utilize both cloud based computing and traditional software for company operations. However, with the developments in the field of technology and the launch of the future generations of cloud computing, the scenario may undergo further transformation with the ability of cloud technology to offer sustainable business solutions that can help companies survive and grow by innovating in their services and products through focused business operations and dependable cloud based IT infrastructure.
Appirio brings a unique business concept that is built solely on cloud computing solutions for medium and large enterprises. The future technologies of cloud computing shall offer better cost savings and dependability that will further help the organizations to concentrate on their business operations by investing in the cloud based computing systems. These companies will not have to spend on heavy and costly IT infrastructure such as servers and thus rank higher on IT efficiency and be profitable in the long run.
3. What is your assessment of the cloud ecosystem that Appirio is based on? Where is the innovation?
The cloud computing system is defined as the model for enabling convenient, on demand network access to a shared pool of computing resources (networks, servers, storage, applications and services) that can be rapidly provisioned and released with minimal effort of the management of the service provider . Appirion is based on software as service model of cloud computing. A cloud ecosystem is defined as the organization of cloud services to help in the execution of the business practices .
The innovation in cloud computing is the fact that there is no need for the businesses to invest heavily in IT infrastructure to adopt new technology. Cloud computing allows technical team to focus on the technical and delivery aspects of the software and the company concentrates on its business operations.
The company Appirio decided that it would practice what it preached to its clients. The company decided to never own a server or depend on an on-premise software for company operations. The company did not use any traditional software for its operations and had a server room that was actually empty. The company adopted basic systems such as Quickbooks online for company Financials, salesforce.com for CRM, Google apps for collaboration and productivity, and Workday for HRM. These measures ensured that Appirio did not have to invest in purchasing and upgrading traditional software.
The company did not issue and manage laptops for employees. The employees were sanctioned a budget to purchase and configure internet for their laptops. The company did not create a corporate network and their corporate network was the internet.
A standard measure of the efficiency of a company in IT is the assessment of IT costs as a percentage of total revenues. For Appirio, the initial IT costs were so low that the efficiency of the company was as much as that of a billion dollar enterprise.
4. As a company, what cloud computing could do to help you develop and lead towards a sustainable performance in terms of differentiation, process improvements and new growth? Be specific and provide examples.
Companies need to innovate in order to address the changing needs and preferences of the customers. Since customers demand more engagement and intimacy, the companies need to innovate by launching new products and services or launching new business models so as to match customer expectations . Cloud computing helps companies to innovate by helping companies to optimize, innovate and proliferate new values . Cloud computing simplifies IT by reducing the infrastructural costs and allows companies a secure and dependable infrastructure for IT needs, thus giving companies more time for innovation . The use of cloud based applications such as software as a service or saap also improves company productivity and collaboration .
Switching to cloud based computing applications also helps the organizations in making a significant contribution towards the business environment. It has been researched that companies that adopt Microsoft applications based on cloud computing, such as Sharepoint over the traditional on premise applications can reduce the energy use and carbon emissions by more than 30 percent .
Early adoption of cloud technologies can help the companies transform their business models and develop a competitive edge. The organizations that implement cloud computing solutions get the time to concentrate on their core competencies and thus benefit substantially from the effort. The Cloud computing helps the organizations to build virtual and open processes that enable the various stakeholders of the organization such as the customers, owners, suppliers, partners, etc., to connect with each other and do business smoothly .
Cloud computing has tremendous potential for the development of the government, education and health care sector through e-governance, innovative teaching methodologies and timely health care services .
Works Cited
Agtivity. Definition: Software Agility. 14 November 2005. http://www.agtivity.com/def/software_agility.htm. 2 October 2014.
Chen, Ran. Intelligent Computing and Information Science: International Conference, ICICIS 2011, Chongqing, China, January 8-9, 2011. Proceedings. NY: Springer Science & Business Media, 2010. Print.
Hill, Richard, et al. Guide to Cloud Computing: Principles and Practice. London: Springer Science & Business Media, 2012. Print.
Parakala, Kumar and Pradeep Udhas. The Cloud Changing the Business Ecosystem. UK: KMPG, 2011. http://www.kpmg.com/IN/en/IssuesAndInsights/ThoughtLeadership/The_Cloud_Changing_the_Business_Ecosystem.pdf.
PwC. "How to drive innovation and business growth: Leveraging emerging technology for sustainable growth." PwC Advisory Oracle practice 2012. 2012. http://www.pwc.com/en_US/us/supply-chain-management/assets/pwc-oracle-innovation-white-paper.pdf.
WSP. "Cloud Computing and Sustainability: The Environmental Benefits of Moving to the Cloud." 2010. http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture_Sustainability_Cloud_Computing_TheEnvironmentalBenefitsofMovingtotheCloud.pdf.
