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Author: David H Deans

Worldwide, there’s a growing appreciation for the many benefits of the Open Source way. Clearly, being truly Open is a frame of mind that can apply to just about anything in life — including the development and nurture of a progressive company culture that’s equipped for the challenges and opportunities of today’s Global Networked Economy.

Jim Whitehurst, CEO of Red Hat, recently launched his new book entitled “The Open Organization” — Igniting Passion and Performance. He says, “The conventional approach to business management was not designed to foster innovation, address the needs and expectations of the current workforce that demands more of jobs, or operate at the accelerated speed of business.”

Granted, savvy senior executives within numerous multinational companies across the globe have already embraced the open way, and others will surely follow. Why would any forward-thinking CEO settle for the constraints of a legacy organization model, when the modern alternative is so much more rewarding?

Furthermore, when given the choice of an open business technology architecture that’s designed for the 21st Century, is there any logical reason to accept the apparent limitations of an underlying IT infrastructure that was conceived in a bygone era of the post-industrial society?

How do you rationalize an ongoing investment in a legacy IT platform that has inherent high-cost software license handicaps and built-in undesirable technical limitations that severely impact both the ROI and operational performance?

My Point: don’t let your prior sunk IT investments sink your future Open cloud options.

Cloud Computing Platform Trends

Cloud computing infrastructure assets are a key foundation for enabling strategic digital business transformation projects. It’s the essential platform that positively impacts all emerging areas of IT service design, development and consumption. It also provides the basis for many of today’s emerging big data, enterprise mobility and social commerce solutions.

International Data Corporation (IDC) predicts the number of new cloud-based solutions will triple in the next four to five years. They’ve examined the current status of cloud computing deployment in several vertical industries, and have unveiled the first of four special reports on this topic.

Their latest global market study identifies industry-specific drivers and barriers of using cloud computing technology and presents insights in terms of how to leverage cloud computing to create new commercial value.

According to the IDC assessment, industry-specific cloud-native applications will be a driving force, as perceptive CIOs look for solutions that can be easily configured to their unique digital business and vertical industry requirements.

Moreover, IDC believes that more organizations — across industries — will shift steadily toward enlightened cloud-first strategies to enable digital business transformation goals and objectives.

Key findings from the IDC report include:

  • IDC predicts that public cloud computing will reach almost $70 billion in 2015 worldwide, with the top 5 verticals (discrete manufacturing, banking, professional services, process manufacturing, and retail) accounting for approximately 45 percent of the total spend for the market.
  • The major opportunities for cloud within verticals come from the development of intelligent industry solutions, which are built on top of a new platform that includes cloud as well as big data and analytics, mobile, and social.
  • Those IT suppliers that showcase the long-term benefits and the true value of the cloud as a platform in a given vertical (e.g., efficiency gains in business processes and improvement in customer acquisition/customer experience) will be most successful.
  • The ease of purchasing cloud-based solutions has helped transfer buying power from IT to functional lines of business like marketing, finance, and operations.
  • Security and regulatory remains the biggest barrier for cloud adoption across industries like government and financial services, while loss of perceived control over IT assets and massive legacy systems are also stumbling blocks for using cloud offerings.

“The technological innovations and enabling capabilities unleashed by cloud computing have fostered new opportunities across the industries,” says Eileen Smith, program manager at IDC.

Besides, IDC asserts that cloud services will remain the essential foundation of the what they call the “3rd Platform” of growth. IDC also predicts there will be more industry-specific cloud service platforms and marketplaces that are hosted by the recognized forward-looking leaders in each vertical industry.

Each of these pioneering organizations will be seeking to establish an Open Community of independent software application developers that will introduce contemporary thinking about new business model possibilities and thereby create valuable digital service innovations.

Smith concludes, “We have already seen such platforms and innovation communities in place in retail, financial services, media, and other industries. This will reshape not only how companies operate their IT but also how they compete in their own industry.”

It’s imperative that CIOs choose to develop strong customer-partner relationships with the authentic Open Cloud platform vendors, in order to fully seize the nascent market opportunities. The key take-away — beware of the Faux-Open evangelists that insult your intelligence by suggesting that burying a cloud-native application within a proprietary legacy IT platform is good enough.

It’s not acceptable, to the modern CIO or their key internal stakeholders. Informed Line of Business leaders know that they deserve a real open cloud solution that meets all their requirements. Anything less is an unnecessary compromise that will inhibit the achievement of their strategic business outcome objectives.

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