Cloud is Turning Enterprises into Platforms
A combination of cloud computing, AI, and deep data analytics is turning decades and century-old enterprises into new-age platforms competing with the digital disruptors.
When Walmart bid to acquire TikTok’s US operations last year, many people were left asking a question.
Acquiring valuable customer data about TikTok users was the primary reason, but not the only one. TikTok would have also helped Walmart reimagine the future of retail, much the same way Douyin does in China by offering young consumers live videos and real-time shopping experiences on its app. While the deal didn’t go through as planned, Walmart continues to double down on this opportunity by partnering with TikTok for live stream shopping.
Meanwhile, retail isn’t the only sector witnessing these battles to stay relevant and do more by embracing the platform model. There’s an ongoing race between traditional car companies and the likes of Apple and Google for building the cars of the future. At the core of this battle again is the attempt to turn a car into a platform that delivers experiential services to buyers, all based on data analytics powered in the cloud.
It’s no secret anymore. A combination of deep insights about consumer behavior and the cloud is helping enterprises take on digital disruptors like never before. “The first thing is to play today you have to be in the cloud, you've got to put all your data and aggregate that in the cloud, and then you have to apply analytics, automation, and AI,” says R “Ray" Wang, founder of the enterprise research firm, Constellation Research. Already, the industries are converging against data value chains. The rewards aren’t just about surviving the digital disruption but finding newer ways to make profits through innovative products.
According to the Infosys Cloud Radar 2021 research, effective cloud usage could add up to USD $414 billion in annual profits in the markets surveyed by increasing the development speed and creating a competitive edge. The survey covered more than 2,500 business and IT executives across five countries and a dozen industries between November 2020 and January 2021. It found specific links between business profit growth and the use of the cloud to rapidly develop and launch new solutions and bring new functionality to market. In addition, the cloud’s ability to generate new value from data and discover new revenue sources is also linked to profit growth.
“Where an early cloud is a tool for allowing companies to scale rapidly, the modern cloud allows companies to innovate rapidly. Cloud has grown to be pervasive and fast, but it has no guardrails. Therefore, executives and technology leaders should develop methods to provide visibility, interoperability, and portability across multiple cloud environments,” says Ravi Kumar S. President, Infosys.
How can enterprises operate like a platform?
A good way of describing what becoming a platform company is like is to think of the services offered and not just the technology enabling this transformation in the background. One of our global clients, a large manufacturer of commercial vehicles, calls itself a software company now. And it’s not just because of the lines of software code that help create a connected car experience. It’s because of how everything from telemetric data to fleet management and multimedia come together to offer a range of services to those driving and using the cars.
The first step towards becoming a platform is to embrace the cloud. This will separate leaders from laggards, adds R “Ray" Wang of Constellation Research. He asserts, “We often say build, partner or perish. So, there will be companies that will be brand new built from scratch, digital giants, and there will be these models that we're talking about, but for everybody else, here's the challenge. They're not investing enough money into research and development. They're not investing enough money into innovation.”
The second building block is to ensure that the quality of data in the cloud is good enough. Data plays a significant role. But who has access to high-quality data? For example, when you’re competing for signals intelligence and have lots of data, do you have excellent insights too? “And I would rather have higher quality data and less of it, so I get a better signal than having access to massive data sets, which might not tell me anything. And this is what they're trying to do is they're trying to improve what we call the business graph; the business graph just like in social media. So, there’s a social graph; the business graph is the intersection between stakeholders, their actions, and what objects they interact with, and we see that everywhere,” R “Ray" Wang says.
Thirdly, the enterprise needs to leverage its data to differentiate its services. Hyperscaler, Microsoft, is seeing a huge spike in demand for its cloud services with businesses accelerating their digital transformation plans in the wake of the pandemic. To ensure that customer service and experience maintained the same high standards despite a sharp growth in new business, the Microsoft Enhanced Support Services group partnered with Infosys to leverage customer data from more than 350 SharePoint destinations to deliver a differentiated support experience. As service efficiency and customer satisfaction went up, more than 200 premium customers signed up for new programs.
Platform businesses, such as Amazon, Google, and Facebook, have dominated the world for several years now. It is clear that the platform model is the way forward, not only for new or digital-only businesses but even for established companies in other sectors. For enterprises turning into platforms, a combination of cloud, data and analytics is the answer.