Competitive advantage is in the clouds: A discussion with Frank DeGilio

In our “Under Cloud Cover” study, we learned that cloud is driving serious advantages for many businesses. In fact, cloud will soon matter more to business leaders than to IT – it’s expected to double in importance among business leaders from 34 percent (2013) to 72 percent (2015), compared to 58 percent among their IT counterparts.

To learn more about how companies are using cloud to create competitive differentiation, Steve Rogers, Director of the IBM Center for Applied Insights, spoke with Frank DeGilio, IBM Distinguished Engineer and Chief Architect for Cloud.


Highlights from our conversation with Frank

Business leaders and IT must partner for competitive advantage

As our study shows, lines of business and IT both realize the immense value that cloud can bring to their enterprise. However, they’re using cloud in such different, siloed ways that they may be hurting, rather than helping, their organization. Business leaders tend to think of shorter-term priorities, such as agility and cost savings, when using cloud services. However, IT leaders need to partner with them to address longer-term needs, such as security, storage and strategy.

Frank discusses:

What I’ve seen in the last couple of years is an understanding that IT and lines of business have not been communicating very well. And a lack of understanding on both sides has really driven them farther apart. And so what happens is lines of business tend to do things that are in their short-term interest and not necessarily in their long-term interest because IT has not been able to articulate the value that they bring… What they’re missing is probably some very important things because they are looking at their tactical issues not necessarily strategic.

The CIO as a “cloud broker”

Cloud doesn’t just drive efficiency and cost effectiveness. In fact, Frank argues that cloud’s biggest value-add is allowing enterprises to leverage people and resources in ways that have never been possible before. This means combining knowledge of business and IT, via the broker CIO, and utilizing new capabilities such as cloud-driven analytics, to create true differentiation and competitive advantage.

Frank discusses:

In order to compete better, I need to be able to leverage what I do especially well and what other businesses, partners, do especially well, right? So, this is why I believe that the CIO becomes a broker not just a provider of service. Today, you have a number of business requirements that you’re trying to satisfy, but you have to understand: what are the things that I do really well? And what are the things that I do that anybody can do? The people who are doing this well are very business savvy and have a technical understanding of the issues.

Cloud is changing the way we work

Cloud is being used to redesign the workplace in two significant ways: helping eliminate silos by supporting more extensive collaboration, and enabling greater flexibility by facilitating new ways of interacting, such as “bring your own device.” Both of these trends create more dynamic workplaces and satisfied employees, driving efficiency, effectiveness and, ultimately, competitive advantage.

Frank discusses:

On collaboration:

I’ve maintained that the only way a business can move forward and be competitive is to remove the silos. Silos are the worst possible thing for business. And if you look at the way we collaborate today, what you’ll find is that we’ve already seen a big change in the way we communicate….It becomes a way of doing business in a fundamentally different way. And it’s not like this is some future state; this is what’s happening now. It’s changing the way we do our jobs.


How we interact has become more dynamic because the tooling is more dynamic. The way we interact with systems is more dynamic. Mobile is going to be even more of a change in the way we do business than personal computers were over PCs. Now, we’ll be able to leverage where people are, what they’re thinking, the way they’re dealing with the rest of the world, the way they’re dealing with their friends altogether in a very dynamic way. And that’s why you need something like cloud because you don’t understand what’s happening or where things are going today.

Cloud enables deep personalization

Personalization isn’t necessarily a new concept; in fact it’s been around since the Industrial Revolution, when the people who sold to you knew who you were and what you wanted. However, the scale at which personalization is expected today is feasible only via the cloud. This means cloud goes beyond the IT space, driving partnerships between CMOs and CIOs, to enable a wholly new kind of marketing, led by data.

Frank discusses:

The online people who sell you things — the Amazons, the Facebook who advertises — are getting to know who you are by what you say and what you buy and what you do. So, they can more effectively provide you connections to the things that you’re most likely interested in buying. To me, that’s the future here. That’s the business model that cloud is really going after. I need to be able to have analytics that point directly to who I am and what I want.

Cloud requires an enterprise strategy

To extract the most value from the cloud – driving enterprise-wide efficiency, eliminating silos and enabling collaboration – businesses need a comprehensive strategy. Piecemeal, roll-your-own initiatives just won’t deliver the same results.

Frank discusses:

People who have an enterprise cloud strategy win. People who don’t… lose. It’s as simple as that. Without the whole enterprise strategy, what you’ll end up doing is making your life worse because you’re not thinking cohesively enough… And the whole point of cloud is eliminating silos not creating more, right? Without an enterprise strategy, you will just create additional complexity and additional silos without solving the problem.

To learn more about deriving competitive advantage via the cloud and other tech topics, listen to all of our podcasts here. For more information about how leading companies are utilizing cloud, read the IBM Global Cloud study.


“Talking Insights” is a podcast series aimed at exploring business and technology topics through candid conversations with industry experts. Tune in to learn about everything from social business to startup partnerships from the people who are actually doing it.

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