Cloud responsible for 'The revenge of the customer' era: IBM

Forget all the promises of cloud bringing cost savings — it's developed a monster generation of consumers that want services yesterday, and tailored specifically for them.

Consumers have caught up with what cloud services are capable of, and instead of it being a cost saving for the business, organisations are expected to spend big or lose customers.

At the IBM SmartCloud Live 2013 event in Sydney on Thursday, IBM consulting services leader Will Duckworth said that many consumers are becoming used to having specialised treatment, and are expecting more from organisations.

"[They want us] to respond quicker, to deliver new products to the market quicker, and treat me as an individual when I interact with the enterprise."

Duckworth said that to improve their agility, organisations should flatten their organisational structures and use more data analytics to inform themselves of decisions faster.

While those are changes that enterprises will have to make, they are no longer cost-cutting ones. IBM last week revealed that the cost savings is not the main driver for cloud adoption , and Duckworth expanded on that.

"I call this the revenge of the consumer. At the first wave of the internet, the enterprise focused on 'How can we save money? I can take my cost to serve from $1.25 to 1.25 cents.' They didn't think about how to engage the consumer."

He said that consumers want to be engaged as individuals rather than being mass marketed to.

"They expect ongoing beneficial relationships. They understand that it's not transactional, and they don't want to be transactional," he said.

"They want the seamless experience across channels. They want to experience your brand, not have a fractured experience across mobile and commerce."

Part of accommodating for the new behaviours of customers also means that those back-end legacy systems that haven't been moved to cloud services need to be examined sooner rather than later.

Duckworth used the example of a retail store, where if there is an issue in the company's supply chain or warehouse management system that prevents it from responding to periods of high demand, the business stands to make a loss.

"I can sell it, but I can't ship it. I don't even know if it's in stock. Having a back end that can respond in the cloud, that can scale to meet demand, that can change quickly is paramount."

"We've got to enable all the legacy systems that you've spent years developing and managing. How do we get them to be more responsive, agile, and automated to respond to this, so we're not just creating demand for consumers that you can't fulfil?"

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