cloud forum_shantanu upadhyay final

"Walk On The CLOUD"How Businesses Need to Think to Profit from Cloud

Shantanu Upadhyay

Oct 12, 2011

1 © 2011 Deloitte Touche Tohmatsu India Private Limited

Cloud Computing: An OLD idea whose time has come

“Computation may someday be organized as a public utility.”

— John McCarthy, 1961

2 © 2011 Deloitte Touche Tohmatsu India Private Limited

Industrializing IT – enabling pay-per-use, bringing IT to new segments

• Bringing non-users like SMBs/ SOHOs into the fold• Within enterprises, empowering lines of business

Democratizing innovation, enabling players to experiment with new models irrespective of size

• New businesses such as Netflix, Groupon et al have been built on Cloud platforms

Paradigm shift

• Innovations from the consumer space are finding their way into enterprise space

Blurring the line between consumer and enterprise IT

Cloud is…

EnterprisesConsumers

Source: Deloitte Analysis, analyst reports, press releases, primary interviews with industry players, SMEs and end clients CIOs

Cloud is driving consumerisation of IT…

© 2011 Deloitte Touche Tohmatsu India Private Limited3

…and will enable IT to inject itself more deeply into product functionality/ business processes

IT Expenditure Vs. IT price index (US)1

IT P

rice

Inde

x

Illustrative example for IT scope expansion: ERP

Production scheduling (MRP),

Inventory management

1960 1970 1980 1990 2000 2010

Customized production, budget and cost controls

Supplier integration, Customer

management

• Traditionally, despite falling costs, IT budgets have remained constant or has expanded

• Going forward, cloud will further push current costs down, freeing up IT budget to be spent in new areas

Support processes integration (finance,

HR, logistics)

E-Commerce extensions, productivity

improvements

Cloud could enable ERP/ IT scope to potentially expand to newer areas involving

• Leveraging unstructured data to drive optimization

‒ Intelligent warehousing – auto inventory management

• Automating newer activities and workloads

0

50

100

150

200

250

0

50

100

150

200

250

1990 1995 2000 2005 2010

IT Price Index IT Expenditure Index

IT Expenditure Index (% of real G

DP)

1. Based on data for information processing equipment and software investments, including computers, peripherals, software and communication equipment Source: U.S. Bureau of Economic Affairs, Deloitte Analysis

Note: Year 2005 value normalized to 100


Cloud allows businesses to transform IT architecture from “Inside-out” to Outside-in”

Key characteristics of an “Outside-in” approach

• An ability to connect a very diverse set of external parties to a common platform

• A distinct “policy layer” that enables autonomous partners to set business policies and preferences

• An ability to facilitate coarse-grained, long-lived transactions

• Compensation mechanisms that cope with unanticipated developments and modify interactions

Source: John Hagel & John Seely Brown, Deloitte Center for the Edge


One-stop travel network enabled by cloud

2.8 million consumers

Over 5600 Corporate Clients

160,000 strong merchant network/ suppliers

Travel “Orchestrator”

The future is already here – Rearden Commerce

§ A next generation e-commerce platform that offers apps, services, content and personalization for travel and expense management

§ For consumers, makes the web a highly intelligent, personalized and unified experience

§ For merchants, provides a large-scale, relevance-based one-to-one market place

Travel Agents

Car Rental Agencies

Hotels and Restaurants

Service Contractors

Source: John Hagel & John Seely Brown, Deloitte Center for the Edge; Reardon company website


Churn

• Fragmented marketplace• Significant customer churn• Low differentiation• Poor customer service

Bus operators with limited or no IT

Business challenges

IT asset-lite bus operators

Internal IT

Amazon web services IaaS Suite

Seat Seller SaaS

Bus Operator Software Service (BOSS)

BOSS inventory management solution for bus operator

SeatSeller for eCommerce companies and travel agents

redBus solutions for Bus operators

The future is already here - redBus

Source: Press releases, Amazon case study, redBus website


Supply chain collaboration and trade financing platform

Buyers

Suppliers

Trading Network

Transportation and shipping companies

Raw material providers

Financial institutions

Inspection companies

Smart Sourcing

Symmetric Information

The future is already here – TradeCard

§ TradeCard is a supply chain collaboration and trade finance platform

§ Serves 4000+ manufacturers, retailers, suppliers and service providers in 50 countries

§ In addition to connecting buyers and sellers, also includes providers for logistics, payment protection, inspection and export financing

§ Lean financial and physical processes; visible flow of money, data and products enabling true multi-enterprise collaboration

Source: John Hagel & John Seely Brown, Deloitte Center for the Edge; TradeCard company website


Prescriptions for businesses

1. Evaluate cloud beyond pure IT cost-reduction and flexibility play

2. Develop experience with Cloud platforms at an early stage to prepare for possible disruptions

3. Explore Harnessing “Outside-in” approach to orchestrate Cloud-enabled scalable network-based differentiation/ business models

“A pessimist only sees the dark side of the clouds, and mopes; a philosopher sees both sides and shrugs; an optimist doesn't see the

clouds at all--he's walking on them.”

– Leonard L Levinson

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