Cloud Technology

In the last 10 years, the cloud has redefined IT and the business landscape, Despite skepticism, security concerns and even confusion about its very definition, the cloud will continue to transform the way we work for the next decade and beyond.

How Cloud Computing Is Changing Management.

Theories and practices of management often spring from the opportunities created by new technologies. Interchangeable parts spurred ideas about structuring assembly lines and logistics. The complex calculations of the field known as Operations Research were enabled by mainframe computing. Client-server technology beget enterprise resource planning systems, and the consequent system-wide visibility that was required for what we call business process management (BPM).


That makes it imperative to start thinking about how management will be changed by the most impactful information technology of our time: cloud computing. What does it allow us to do differently, and how will that change the way we do things in the future?


History suggests that the main way information technology changes management is through changes in how information is gathered: the large-scale analysis of Operations Research reflected painstaking data collection around a few metrics, which were transferred to punch cards. BPM reflected the interactions of different stakeholders, from product creation through supply chain to final assembly.

How organizations are changing

With cloud, information travels rapidly in both directions, across computing systems that, with attributes like virtualization, scaling up or down to handle bigger workloads, or automated security patching across thousands of machines, are far more flexible. This will likely mean a more flexible work structure as well, in the interest of products and services that ideally can be adjusted to anticipate customer needs. Key to the new system are rapid data collection and analysis, followed by over the air changes to product software.


Likely outcomes of the move to cloud include changing how products are designed; closer collaboration between the corporate IT department and other business units, including sales, finance and forecasting; and more customer interaction, even to a point of jointly developing products with their consumers. In particular, new ways of writing and deploying software will encourage new types of faster-acting organizational designs. And the best way to anticipate how these changes will occur is to hear from companies already aggressively implementing them.


Public cloud computing, offered by companies like Amazon Web Services, Microsoft Azure and Google Cloud, is still viewed by many as a cheaper and more efficient way for companies to store and process data. The cost may be lower, but like traditional computers, it is still a cost.


Lower costs have been reason enough for many companies to shut down their proprietary data centers and consume computational power and attendant software as a series of on-demand services. Others use cloud computing software in their own data centers, as a means of increasing resources and working faster.


How it effects product design and customer experience

As cloud technology improves, however, it is becoming easier for companies to create products and services within the cloud, or model new products or marketing campaigns as cloud-based software prototypes. The cloud is also a common repository for the collection and analysis of new data, and the place where an increasing number of artificial intelligence operations, like image and speech recognition, are conducted.


The evidence is already there, as startups increasingly conceive of their goods and services largely as software-centric entities, from which data is continually derived. Changes and upgrades become part of a continuous process. Organizational functions blur as processes become increasingly iterative.


The ride-hailing company Uber has stressed the importance of its hybrid cloud model to ensure not just constant uptime, but an indivisible relationship between product development and deployment. Uber is able to model a virtual fleet of taxis from private cars through a combination of mobile software, large-scale data analysis, mapping, and social networking.


A similar dynamic of redefined processes and constant iteration is happening with industrial products. Oden Technologies is a New York-based startup that builds sensor systems for factories, enabling continuous, precise monitoring of large and complex processes.


One recent project involved building a tablet-based system for carrying out complex calculations in real-time. The product, which might normally take six months to a year to create, was finished in 10 weeks, thanks to accelerated testing, and direct communication with the customer about needs and specifications during design and construction. In effect, over time the initial design and the prototype incrementally became the product, with the customer participating in its creation.

What else needs to change?

The constant relationship between management theory and applied technology shouldn’t be too surprising. William Hewlett, a founding father of Silicon Valley, famously said “you cannot manage what you cannot measure.” It seems to logically follow that opposite also holds true – what and how you measure something influences the way it is managed.


How soon will cloud be as influential for management as the mainframe or client-server computing? In a recent paper, Erik Brynjolfsson, Daniel Rock, and Chad Syverson found that major technology improvements may lag productivity gains for years, even decades. The most tantalizing reason why: An ecosystem of other changes has to arise, along with new thinking about how the technology should be used, in order for it to have full impact.


Brynjolfsson, a professor at MIT’s Sloan School of Management, thinks software-based advances like AI and cloud-style software will find a place faster than many of the earlier advances. For one thing, lower costs mean they can be quickly adopted by startups unencumbered by legacy costs and practices. And, unlike hardware-based advances, the influence this time will be from software – in particular, what happens when teams throughout the corporation build products and services using what is termed cloud-native software.


“With the cloud, we can replicate processes more quickly,” he said. “But you still need three things to be updated before you fully take advantage: Organizational innovation, trained human capital, and social institutions, like infrastructure and regulation, that accommodate new technologies.” He added, “the biggest issue now is that important new technologies are moving ahead, and people aren’t thinking enough about the big implications.”