Sorry – But Cloud Really Doesn’t Matter

Craig Le Clair
Vice President, Principal Analyst
January 4, 2014

 

The way we deploy software is changing. Our research and others shows that enterprises are moving away from on-premise apps. and moving to private and public cloud offerings. But here is the basic question that is seldom asked. When a company deploys to the cloud does that boost revenue and returns to stockholders? Are high performing companies separating from low performers by their knowledge of and use of cloud technologies?  Our recent Business Agility study says clearly that they are not. 

Let me give some context for this statement. Forrester is putting significant effort into Business Agility – what it is, how it relates to the success of companies within industries, and what foundations business agility is built on.  We’ve identified the three types of agility that companies must develop — Market, Organizational, and Process agility – and evaluate ten separate dimensions that make them up. We found  out which of the ten dimensions were the most important, defined as driving growth in revenue and profit (see the Agility Performancereport).

And  here’s the point.  Infrastructure Elasticity – which is our agility dimension for all things cloud, accounted for almost no difference in enterprise performance. Enterprises aggressively embracing cloud solutions did not perform better than their peers. In fact in some industries, they performed worse.

What does this tell us?   Think of cloud deployment or Infrastructure Elasticiy, as we call it, as an enabler for other dimensions that make your business more agile and hence higher performing. Dimensions that directly drive revenue – like Channel  Integration and Market Responsiveness. Unlike Infrastructure Elasticity, these show huge gaps between high and low performing companies.   Or Business Intelligence, by far the most important “Process Dimension” can be acclerated via cloud options directly to the business.  These are a few crucial agility dimensions that can benefit from cloud deployment.  Organizational dimensions – like Digital Phycology and Change Management also showed stronger gaps but have little to do with cloud deployment. Cloud providers the coming years will demonstrate how their solutions enable agility across market and organizational dimensions that directly drive economic performance.

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