Five Reasons Why CEOs Should Love Cloud Computing

Business leaders today face a daunting challenge: finding ways to invest in powerful new customer-facing technologies and engagement models while also, on balance, stripping unproductive costs out of their businesses.

I believe the increasingly capable and proven approach of cloud computing can play a huge role in helping CEOs strike that delicate balance because the cloud has fully evolved from a tech-industry phenomenon to a mainstream and strategic business opportunity. The proof is in rapid customer adoption for everything from HR to Marketing to Sales to Financials and other essential applications.

What has changed from a few years ago, when the cloud wouldn't have been even considered for mission-critical parts of the business? I'd point to three major factors:

• First, our customers tell us that Oracle's cloud products have met or exceeded their requirements for features, security, and reliability.
• Second, businesses and other large organizations are sick and tired of having to spend millions of dollars—in some cases, tens of millions or hundreds of millions—integrating their mismatched applications, systems, and networks. And they believe cloud computing can help eliminate those high costs that deliver very little value.
• Third, our customers know they need to move faster and be more responsive to rapidly evolving customer requirements and turbulent business conditions, and they believe our cloud technology can help them accelerate their operations. Many of our customers have installed and begun using new cloud apps in weeks rather than months.

So business leaders today have the opportunity to dramatically alter how their companies use technology so that more—much more—of their IT budgets are devoted to customer-facing growth opportunities, and less is trapped in maddeningly complex and expensive in-house IT environments that can't keep up with the modern business world.

CEOs across the globe tell me their companies don't have an IT-spending problem—"We spend plenty of money on IT," they tell me, "but we just don't spend it in the right places." They say they spend too much on aging systems that are inflexible and expensive to maintain, too much on ancient applications that can't handle social or mobile, and far too much on massive integration projects that never seem to end and rarely deliver essential business value and insights.

As an antidote to all that complexity and cost and confusion, cloud computing can help CEOs transform their businesses by understanding customers and prospects more intimately, pouncing on new market opportunities as they emerge, accelerating new-product development, and hiring and growing world-class talent.

In addition, business leaders who've begun to eagerly embrace the cloud are realizing that it's essential to have a primary cloud provider, rather than replicating the traditional IT approach of buying components from dozens or even hundreds of IT suppliers and then spending huge amounts of money and time trying to integrate all those disparate pieces. By going with a primary provider, CEOs expect to move faster, spend less, and end up with systems and processes that are much less complex.

In that context, here's my list of five high-value reasons why CEOs should love the cloud:

1. Simplify IT. In the traditional approach, the tech industry spews out thousands of discrete piece-parts and expects customers to spend months or years on the IT-integration chain gang, with hundreds or thousands of IT staff evaluating, buying, assembling, configuring, testing, tuning, patching, upgrading, and monitoring all that stuff. We think our customers deserve better—we think the IT industry should assume the cost of and responsibility for making products that work together, so that our customers don't have to do it themselves.

2. Re-engineer the economics of IT spending. In the old-fashioned approach, all that complex but ultimately low-value work chews up 70% to 80% of the total IT budget, leaving precious little for much-needed innovation. Cloud computing offers business leaders an elegant alternative to the current mess because it lets them focus on their core business and priorities rather than on IT sprawl. And the money the cloud helps CEOs save can be deployed toward those vital customer-facing innovations demanded by today's social/mobile marketplace.

3. Accelerate and optimize your business processes. Many businesses today are still running core applications that were installed 20 or even 25 years ago. And while those ancient apps still do what they were designed to do, the problem is they simply can't handle all of the innovations that have been created in the past two decades and that all of us now take for granted: rich social experiences, mobile-first consumption, easy-to-use interfaces, video, instantaneous searches for structured and unstructured data, and upgrades that are both constant and unintrusive. Conversely, modern SaaS applications are built specifically to exploit all of those new innovations and capabilities on which business people depend in all facets of their jobs.

4. Drive innovation. The cloud model lets business leaders redeploy precious IT budgets and people away from expensive and low-value integration work required with acres of mismatched IT sprawl and toward higher-value initiatives. For example:

• delivering real-time intelligence to sales teams on mobile devices,
• unifying demand chains and supply chains,
• squeezing latency out of antiquated processes, and
• infusing new products and services with intelligent sensors and software for use in our increasingly interconnected world.

5. Enjoy world-class security and compliance. Business leaders should expect that cloud-computing companies will deliver world-class security and compliance capabilities without exceptions. For CEOs whose companies are still using traditional IT approaches, these vital issues are add-ons to your core business—but for Oracle, they're an absolute top priority to which we devote extensive resources and for which we've built world-class teams and processes.

Over the past 12 months, business leaders from all industries have begun to eagerly embrace the cloud as not just the latest IT-industry shiny object to come along, but rather as a truly strategic and transformational technology that can help them simultaneously strip out unproductive costs while also funding essential innovation.

And those CEOs are looking to the cloud to supercharge much more than just their HR and Marketing teams. We're seeing very large companies turning to the cloud to deliver better performance in core production systems such as financial planning, supply chains, customer care, and more.

For CEOs looking to simplify IT, drive innovation, cut low-value IT costs, and accelerate operations, cloud computing is a strategic model whose time has come.

via Mark V. Hurd