Qiping: The value of cloud computing for CEOs

Does cloud computing change the way of business

Dong Zhongshu of the Han Dynasty said a word: "The sky is unchanged and the Tao is unchanged." The intention is to say that the Tao will not change. But this sentence has a premise-"The sky is unchanged." If the day changes, the Tao must change. The day is the world trend, specifically, productivity. Cloud computing is the change of the day, it will not bring about changes in the business, this is the CEO first to consider the issue. If cloud computing only has an impact on apps, but does not change the way the business is, CEOs have no need to ask about cloud computing and give it to the CIO.

The various interpretations of cloud computing currently we see are described in terms of application, and are spoken to CIOs and technicians. Some from the perspective of the application is the right description, from the point of view of the road is wrong. For example, the development of "cloud computing" will lead to a further concentration of global information in the collection, transmission, storage, processing and other aspects. It would be misleading to talk to the CEO. Cloud computing does have a concentrated side in the application layer, but it is only one side of the two sides of the "Unification" and "division". From a business perspective, cloud computing cannot be understood as a way to centralize unity.

The business path that cloud computing can change, in my opinion, is first to create wealth from division of labor, and change to create wealth for integration. The "heaven" of the steam engine determines the "way" of the division of labor to create wealth, and the "sky" of cloud computing will determine the "Tao" of wealth creation. In this sense, cloud computing is first and foremost a way of merging. It changed the law of diminishing returns under the condition of capital specificity, and embarked on the path of increasing the compensation through the integration of resources. When cloud computing in the future shocks the whole economy, the traditional theory of externality, hitchhiking and so on from the high negative network will face the challenge of practice.

The business path that cloud computing can change, at a lower level, requires the CEO to understand from the perspective of what Chandler calls "the driving force of industrial capitalism". The CEO needs to judge the influence of cloud computing on the enterprise strategy from the two big jaunts of wealth creation, namely the increment of scale return and the increment of scope reward. In other words, to judge the enterprise strategy is to rely on a single variety of large-scale production, or small batches of many varieties. The decision is whether to use cloud computing strategically or just tactical applications. For example, 87% of Cosco's profits come from bulk goods, indicating that it has achieved a cloud-by-way market competition in the strategic rather than technical level. Experts always say that cloud computing can reduce costs. This is a good tactic. But for the central enterprise, cloud computing in the calculation of storage link savings of 200 million, 300 million, and Cosco strategic transition to the cloud and earn tens of billions of, which is the most important? It is clear that the CEO should give priority to strategic issues, rather than the technical staff.

The business path that cloud computing can change, and then down one level, to the CFO level, needs to consider the impact on decision-making finance. If cloud computing can penetrate the strategic finance layer, it will be the sort of question of whether corporate profits are 100% from a fully competitive short-headed business with 20% of 80% revenue, or a 33% profit from a long tail in a monopolistic competition that brings 25% revenue. Cloud computing ultimately achieves the desired financial results and is by no means the simplest way to move the business into the cloud. It requires the company to make a new choice of financial strategy. The correct choice of results will be to lead the enterprises from the Chinese-made profit to the lower cost of competition, to go beyond the price war of high value-added http://www.aliyun.com/zixun/aggregation/3062.html "> Differentiated competition." This is the financial essence of the cloud.

How cloud computing changes business models

Many people are talking about the commercial application of cloud computing, but from the perspective of application-business model, I think there are a lot of things that are too technical and even inappropriate. CEOs understand that cloud computing applications should not be technical applications, but rather the application of pattern selection issues. I have raised four types of questions to illustrate.

The first kind of question, what is the nature of cloud computing sharing? Taking the long tail model for example, the long tail is a small batch, many varieties of business. Cloud application Threemonths End, first of all, to exclude the niche, invisible champions such as intercepting the long tail of the business type, and the pursuit of long tail full line of business integration, because the most can play the advantages of cloud computing shared resources. From the CEO's point of view, it is not the application itself, but the institutional environment of such application. Cloud computing in the integration of decentralized services in this application, the actual enterprise will unwittingly bring into a property rights revolution. Just think, capital specificity is not suitable for cloud computing, in the cloud computing, resources in the absence of ownership relationship between the subject to share, what is its property rights basis? I think this foundation is not public ownership, but social capital ownership. The CEO first thinks clearly, then decides not to do. The province gets the court to think again, it's late.

The second type of question, what is the relationship between concentration and decentralization in cloud computing? From a local point of view, the most misleading thing about cloud computing applications is that it is either a centralized unified model or a complete decentralized model. I think that cloud computing is not concentrated but the more concentrated (the system) the more dispersed. Take the free mode as an example, the prerequisite for free is the separation of the industry (not separated from the discount), the separation of a business (business) and value-added services (divided business) two interdependent business; Therefore, cloud computing is neither a system nor a division, and is actually a combination of two-tier business model. The local data concentration business, magnified to the entire cloud computing application characteristics, like elephant. Now talk about the small cloud computing distributed application, should avoid this one-sidedness.

Third kind of question, what is the relationship between cost and value added in cloud computing? Another misleading aspect of cloud computing from a local point of view is to look at cloud computing only from a cost-saving perspective. This is not complete. With the idea of excellent operation as an example, because of the one-sided emphasis on cost savings, the result of the Toyota incident such a tragedy. The new excellent operating concept requires that the cost savings and value-added are relatively separated, with modular large-scale production as the main cost savings, personalized customization model to achieve value-added. The misleading aspect of cost-oriented cloud computing is the temptation to lure cloud computing into a "restoration" of a traditional large-scale centralized model that seriously ignores the dominant direction of differentiated value-added. Therefore, cost savings can only be emphasized as a fundamental part of cloud computing, not as a whole.

Question fourth, what is the nature of diversity in cloud computing? Many people rightly emphasize that cloud computing is a distributed computing model that requires deep understanding. Take crowdsourcing as an example. People used to think that core business could not be outsourced, but top companies, such as Procter and Gamble, used crowdsourcing to outsource core business to 140,000 of amateurs. In fact, core business outsourcing is the most embodiment of the discrete nature of cloud computing. Top companies have to go beyond human calculations to reach the realm of heaven. Who is the most afraid of the day? A wise man is not as good as heaven. The most afraid of the day is actually a fool. According to a Harvard professor, the Group of Fools has the advantage of being systematically diverse, so in the complex jungle competition, the survival of the fittest depends on the advantage of biodiversity. The highest level of cloud computing is to achieve the "nature" and "people may not win the day" effect. People set, is to say that cloud computing people to integrate, United for network intelligence; People are uncertain, is that the cloud has mobilized the individual's biological diversity potential, that is, the power of uncertainty, add together, is concentrated and decentralized, saving resources and create value of the organic combination.

These are not directly related to the technical aspects of cloud computing, for the CEO, technology can let others do.

(Responsible editor: Duqing first)