Part 3 – Demystifying the Cloud

Lower Cost and ‘Risk’ of Innovation

One of the most important drivers of business success is innovation. One thing is for sure – if you fail to innovate and look after your customers, your competitors most definitely will. However, business owners understand that with innovation come significant risks, and, more often than not most attempts fail. Although there is nothing wrong with failures – they still cost money limiting a business’s ability to innovate on an ongoing basis. Also, the more that is spent on a new idea, the higher the risk incurred.

Cloud platforms can lower innovation investment costs making them less risky and ultimately let you do more of it – “innovate often but fail cheap.” To understand why this is, consider today the growing dependency that business innovation depends on needing more software or perhaps custom applications. That new product or service you’re trying develop or plan likely requires new software and servers. For many businesses, this means facing organizational hurdles even to get the project started. Your business justification involves approvals for capital expenditures on software and hardware and waits times for IT resources to stand up and configure those expenses. Of course, this makes perfect business sense. However, the money and time this involve can create a real barrier to innovation.

Every attempt at innovation starts by experimenting with ideas and what better way to do this than a low-cost, low-commitment and rapid way to verify if the new business idea has value. Cloud infrastructure and platforms can provide for the following reasons:

  • As we discussed in part 2 of this series, cloud platforms are priced on usage-based billing models, so the business only incurs costs for what was used during your innovation research phase. With HostedBizz, for example, you pay on a monthly basis for servers & storage allowing innovation and experimentation costs to start small and reducing the financial risks an organization faces.
  • With usage-based pricing there is no major upfront commitment of capital and if the experiment fails to materialize you turn off the virtual private server and stop paying. The even better news, however, if the experimentation turns out to be a success the launching the product or service is a simple as ordering up the required resources from the cloud and scaling your new product as required.
  • Since using cloud platforms and infrastructure is scalable by nature – new products, services or applications developed by businesses can start small and grow as required. This creates the ideal environment that encourages innovation. Moreover, by reducing the cost of failure, a cloud platform can make it easier to break down the barriers and internal processes mentioned above that stand in the way of innovation.

Without the cloud, new ideas, innovation and the individuals behind them that might never have had the opportunity to make a real difference in influencing business success. Keeping costs low enables your business and encourages employees to try more things and materially improves the chance of discovering new and successful business innovations.


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