Amazon’s cloud services business (as part of Amazon Web Services – AWS) has been a great success and shows no sign of retreating. Amazon’s cloud computing business did exceptionally well in the fourth quarter of 2015, generating $687 million in profit on sales of $2.4 billion. That is a business on track to generate $10 billion in annual revenue and a margin of over 28%! That is in a business that is a “commodity service.” Even with Microsoft and Google in the fray, this success has broad implications for cloud services and the future role of IT executives in firms.
Clearly, Amazon’s cloud service offering is hitting a cord with firms. It began by attracting small firms, not-for-profits, and now boasts clients like Netflix, Yelp, and soon Fortune 500 firms. Microsoft, Google, and Amazon, each with their own cloud service are setting their sights on serving the Fortune 500, and replacing the data centers of the largest firms in the world. The future of data centers is becoming clear. Firms are getting out of the IT business but are more and more in the digital business. Amazon, Microsoft, or Google will run the data center, provide architectural guidance, address security, and provide the redundancy that have long been the focal points of CIOs and IT executives. Of course, costs are an issue and Amazon and its competitors have established a system that achieves an economy of scale that few firms if any could match. Initially concerns of data breaches and security cast a dark cloud over cloud services. However, are private clouds or any corporate data center significantly more secure? Probably not. By its record, cloud services are proving to be a solution for many firms.
Next Steps for IT Executives
As firms reduce their role in running data centers, they are simultaneously increasing their digital footprints and producing more data. There are enormous opportunities for IT executives, but it does require a pivot and a repositioning of the work that is in house for firms.
Here are a few areas are will be especially important for firms and are rich areas for IT executives to consider as their next moves.
Professor Walker provides keynote talks, seminars presentations, executive training programs, and executive briefings.
Recent talk topics enjoyed by clients have included:
“From Big Data to Big Profits: Getting the Most from Your Data and Analytics”
“Leveraging Artificial Intelligence and Automation at Work”
“Winner Take All – Digital Strategy: From Data to Dominance”
“Success with an Inter-Generational Workforce: From Boomers to Millennials”
“FinTech, Payments, and Economic Trends and Outlooks in Consumer Lending”
“The World in 2050: Risks and Opportunities Ahead”
Exceptional executive training programs have included:
“Digital Disruption, Automation, Analytics, Data Science, the IoT, and the Big Data Wave”
“Master Course on Operational Risk: Measurement, Management, Leadership”
“Complete Course in Risk Management: Credit, Market, Operational, and Enterprise Risk”
“Cyber-security Training: Prevention, Preparation, and Post-Analysis”
“Managing Your Brand and Reputation in a Crisis.”
“Strategic Data-Driven Marketing”
“Enterprise Risk Management and the CRO”
About Russell Walker, Ph.D.
Professor Russell Walker helps companies develop strategies to manage risk and harness value through analytics and Big Data. He is Clinical Associate Professor of Managerial Economics and Decision Sciences at the Kellogg School of Management of Northwestern University. He has worked with many professional sports teams and leading marketing organizations through the Analytical Consulting Lab, an experiential class that he founded and leads at Kellogg.
His most recent and award-winning book, From Big Data to Big Profits: Success with Data and Analytics is published by Oxford University Press (2015), which explores how firms can best monetize Big Data through digital strategies. He is the author of the text Winning with Risk Management (World Scientific Publishing, 2013), which examines the principles and practice of risk management through business case studies.
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