Cloud Native: From New Methodology to New Business Models

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In business, an increase in velocity and agility doesn’t just mean doing the same things faster or more profitably.

As my colleague Vikrant Karnik (VK) explored in his article last week, many of the businesses adopting cloud native as both a development approach and strategy are doing so because of the huge velocity, efficiency and business agility gains it can bring. The thing is, in business, an increase in velocity and agility doesn’t just mean doing the same things faster or more profitably—it means gaining the ability to do things completely differently.

That’s how real cloud-native transformation happens. Shorter, more agile development cycles mean faster app delivery and better responses to customer needs. That, in turn, helps businesses seize new opportunities at speed.

It may seem like a small change in development capabilities at first, but it can radically change how a business fundamentally operates, positions, and differentiates itself.

What cloud-native business differentiation looks like

As a part of Cloud native comes of age, our recent cloud-native research report, we interviewed a number of industry experts and business leaders about their views and experiences with going cloud native.

Royal Mail was an extremely interesting case. The company is the perfect example of how cloud-native agility helps a business to pivot, instead of just moving forward faster. With the delivery market going through a period of massive change, Royal Mail’s move to a cloud-native approach was as much about finding new ways to serve customers as it was about keeping pace with technologically sophisticated competitors.

The fast cloud-native development capabilities that Royal Mail gained helped the organization respond to changing customer demands faster, by creating new apps and services in previously unachievable timeframes. Some apps worked, some didn’t, but the company learned a huge amount about what its customers want and the value of changing direction and seizing new opportunities in a turbulent market.

Turning traditional approaches to differentiation on their head

New services are a great way to differentiate your business model by using cloud-native technology—but they’re far from the only one.

When you make changes to your platform, the way your services are delivered can become a powerful point of differentiation too. For businesses that master cloud-native development and platform management, your platform itself could even become something you deliver as a service to other businesses.

Embracing cloud-native development forces businesses to change their mindset and approach to differentiation. Instead of starting with the services they provide and finding a unique way to make them appealing, cloud-native helps businesses to look at their capabilities and platforms first, then build their differentiation and go-to-market strategy around them.

When we recently interviewed Matt Stine, an IT industry expert and author of Migrating to Cloud-Native Application Architectures, he referenced Amazon as the perfect example of a company that has achieved unparalleled success by thinking “platform first.” Matt said: “Amazon is in the cloud business. They’re a retail company, but they’re really a platform company that happens to have a retail store on top of their platform. Where most companies just have a business model and attempt to deliver differentiated value within it, Amazon looked at the complete chain of the service they deliver.”

Without a doubt, Amazon is a rare and almost unique case. But, there is something important that any organization embracing a cloud-native approach can learn from them. Once you start thinking “platform-first” you open up a whole new world of opportunities for your business.

The time for transformation is now

No capability or business model can be an effective differentiator forever. Those that are using a cloud-native strategy to transform their business models and differentiate themselves today are only able to do so because they are so far ahead of the pack.

Our research identified two levels of cloud-native maturity: leaders and laggards. Leaders made up around 20% of the total survey sample. They’re the companies that have already embraced cloud native with open arms—with the mean share of their current apps being cloud native standing at 43%, compared to just 4% within the laggard group.

Cloud native will never stop enabling new business models. But, as more laggards embrace cloud-native approaches, those business models will stop being powerful differentiators and simply become the norm.

At that point, the decision on whether or not to go cloud-native becomes a far greater imperative than it is today. It will stop being an opportunity to get ahead, and instead simply become a necessity to keep pace with competitors. Those that want to see big results must act fast.

See what else we’ve learned

Our research unveiled many interesting and unexpected insights about both the current state of cloud-native adoption, and what the future holds for cloud native as an enterprise strategy.

If you’d like to explore the results of the survey for yourself, download the full research report.

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