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Responding to a New Breed of Services

CIOs Need to be Ready to Take Over the Innovation Function

Benefits from cloud computing are often focused on infrastructure optimization, but one disruptive change occurring across a variety of industries are a new breed of commercial services delivered through the public Internet. The common themes these services share include ease of use, accessibility through a wide range of devices and always targeting inefficient business processes. I will focus on two examples of such services that I believe show promise of future success and growth.

  • Automatic Labs: One of the by-products of the smartphone has been a number of mobile applications capitalizing on the fact that they are present and connected all the time and everywhere. Automatic is a product that monitors car driving habits and delivers services similar to OnStar from GM and In-Drive from State Farm. By gathering data from the On-board Diagnostics (OBD) connecter in a vehicle and being integrated with a driver’s smart phone through Bluetooth, this product has the potential to change significantly the automotive driving experience with an entry price of $99.

If and when Automatic grows and builds a critical mass of users, the opportunity to influence the automotive industry is endless. Independent mechanics could take away business from dealer repair shops after earning the trust of and getting recommendations from other users. Aftermarket retail chains like AutoZone could link targeted and timely products to users. Although the product is being touted as a smart driving assistant, pay-as-you-drive could disrupt current automotive insurance models. Analytics from granular data could help car manufacturers collect valuable insight into designing future models.

  • Benefitfocus, Inc.: The current employment workplace is undergoing a major change with employers that allows employees greater latitude in picking their healthcare, insurance and retirement benefits providers. Complexity compounded by regulations that vary by state makes current enrollment systems cumbersome and confusing. It also makes the process an ideal candidate for a simple solution. The Benefitfocus Platform has evolved from having a few large customers and partners to a cloud-architected platform allowing easy integration through Application Program Interfaces (API’s). This capability opens up the solution to a wider range of partners and customers.

A common platform like Benefitfocus helps employees choose the provider that meets their individual needs and presents all options through a single user interface. As a partner, Mayo Clinic provides wellness resources in the same interface, encouraging employees to lead healthier lifestyles, thus reducing their healthcare costs. With the growth of mobile platforms, access through your choice of a device is a feature that you would not easily find in legacy solutions.

Automatic and the Benefitfocus Platform are two examples of a new breed of cloud- enabled solutions that are changing the way services are delivered in very different applications and industries. Cloud infrastructure vendors should encourage start-ups to deliver services leveraging their platform. Existing partners should also evolve their solutions to deliver them as managed services.

Growth of mobile devices and adoption of social media are fueling change to current business processes. A new breed of services like the ones explained here are so disruptive and common that they are compelling everyone in the IT ecosystem to re-evaluate their current business models. The accelerated pace of change brought about by cloud computing is leading to incumbents blind-sided by competition.

CIOs cannot be in denial of these changes, but instead must enable their own organizations to respond to challenges disrupting current business models. CIOs have to move from simply being data center owners to becoming providers of solutions that may not even need their own IT resources. The charter of innovation would ideally fit those CIOs who are ready to build a culture promoting nimble solution development and delivery.

This post was first published on Robustcloud.com. Republished with permission.

More Stories By Larry Carvalho

Larry Carvalho runs Robust Cloud LLC, an advisory services company helping various ecosystem players develop a strategy to take advantage of cloud computing. As the 2010-12 Instructor of Cloud Expo's popular Cloud Computing Bootcamp, he has already led the bootcamp in New York, Silicon Valley, and Prague, receiving strong positive feedback from attendees about the value gained at these events. Carvalho has facilitated all-day sessions at customer locations to set a clear roadmap and gain consensus among attendees on strategy and product direction. He has participated in multiple discussion panels focused on cloud computing trends at information technology events, and he has delivered all-day cloud computing training to customers in conjunction with CloudCamps. To date, his role has taken him to clients in three continents.

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