Thanks, all! In quick response...
My background is 25+ years as a consultant to (mostly) vendors and also channel members and end-users of technology. More here if you're interested:
http://www.linkedin.com/in/michaelwoneil
Re: core competency and death - there are two threads that connect around this. One is that for the most part (and despite a common corporate perception), technology has not been either a particularly high-risk nor fast-moving investment area for most enterprises. There are a lot of anecdotes about failed projects, but (as this board would know better than most!) anecdotes are a poor substitute for data, and data shows that on a micro basis, investments in technology solutions generally yield a positive ROI.and on a macro basis, investments in technology (and not labour) have been the key driver of economic progress - certainly since 2009, and likely for some time before that. In the book, I argue that for the most part, these solution technologies are used to optimize what businesses do already, rather than to change what they do/how it is done (meaning that they don't really challenge management to consider fundamental changes to core processes). There are exceptions to this - PCs, ecommerce, and the Internet were truly disruptive. They also yielded a wide range of (anticipated and unanticipated) benefits, but in each case, the companies deploying the technologies were generally optimizing for a single key outcome (productivity, remote transactions, content distribution). Additionally, the friction associated with deployment of new technology, in terms of both IT bandwidth and cost reduced the scope for new automation. As recently as 2008, Gartner estimated that a poorly-managed desktop PC cost up to $5800 per year to operate, and a poorly-managed laptop cost nearly $10,000 per year; the cost of PCs didn't stop their use by everyone with a desk, but they did reduce available capital for other automation projects.
The other thread involves management comfort levels. Virtually everyone who has ever worked in a corporate environment has heard executives say "we are going to focus on our core competencies," or alternatively, "those who have too many priorities have none." From a technology perspective, in a world where the ability to deploy new automation is constrained by IT staff bandwidth and investment capital, this approach works, because that constraint applies to all competitors.
Cloud, though, changes this equation. On the one hand, cloud is truly disruptive, in that it allows for entirely new ways of applying technology to business issues - for example, it allows for automation and integration of tasks that were previously unautomated or poorly automated. On the other, cloud-based automation is, in practical terms, "zero friction." The cost of cloud-based infrastructure and applications is vastly lower than the cost of on-premise equivalents. On an apples-to-apples basis, cloud is on average anywhere from 30%-70%+ less expensive than on-premise applications or infrastructure, but apples-to-apples is hard to apply here, as cloud will over time provide accelerating benefits that aren't available with on-prem technologies. Additionally, because cloud is delivered as a service, it reduces the constraint of IT staff bandwidth, as some of the service requirements associated with the set-up and management of the technology transfer from the buyer to the seller.
The upshot - at least in my opinion - is that the executives who say "we're going to focus on our core competencies" are doomed. Being extremely good at a handful of things will not be a successful strategy when competitors are able to adopt automation to be good/very good at dozens of different things. Based on some not-terribly-exhaustive research into SaaS providers, I identified 41 discrete business tasks that can be automated with SaaS today; add in the ones I didn't capture, infrastructure options like IaaS and its offshoots, and vertical-specific overlays ("business operations" has meaning in both healthcare and financial services, for example, but the meanings are different), and the figure gets much higher. Multiply 40-odd possible avenues for business optimization by the number of ways of being "best" at using each technology - deploying applications with the best functionality, lowest cost, that are the easiest to integrate, offer the best modularity/expandibility, are easiest to use, etc. - and you end up with many, many ways to construct an optimal approach to business automation. This leads to an uncomfortable position for executives: they generally want to pursue a limited number of objectives, and believe (with some reason) that they'll be viewed as lacking consistency if they pursue too many objectives at the same time. However,
some executives will figure out how to capitalize on the zero-friction options available to them, and their firms will be more successful than their less-agile competitors.
Sorry if this is in the tl;dr category! But if you're still with this discussion...At a session in September, I heard a guy quote a senior healthcare leader as saying something like "for everything we've done well, that saves us a couple of million dollars, there are a hundred things that could save us a few hundred thousand that we're not getting to. The cycle is too long." With cloud, the cycle is much shorter. The companies that capitalize not just on the multi-million initiatives but also on the many other meaningful opportunities will start to eclipse those that don't - and with the speed of cloud-based innovation, this won't take multiple decades to play out!