| | May 201519CIOReviewOver the past few years, the cloud has moved from making transactions easier, to making connections to people and communities easier, to making connections to intelligence easier. In doing so, it has gone from being a mechanism for sharing infrastructure and then sharing transactions to what it is today: primarily a mechanism for sharing intelligence.The idea of the cloud as an intelligence-sharing mechanism has gained strength because the concept of external intelligence is fast gathering steam. This concept--that valuable, accessible intelligence exists beyond the enterprise's four walls--is already being put into action in many areas. Companies everywhere, for example, are using cloud-based intelligence to secure their systems and protect them from attack, and the military is using massive intelligence databases in the cloud to better understand our enemies' characteristics, attributes, and potential actions. Likewise, more enterprises are taking advantage of cloud-based shared intelligence for practical applications. One company, for example, has put the menus of nearly all U.S. restaurants in the cloud and makes available to its clients trend information that can help them stay up with, and perhaps get in front of, the changing eating habits of Americans.The acceptance of the cloud as a mechanism for sharing intelligence is forcing a fundamental rethinking of the enterprise, shattering the idea and purpose that have driven the enterprise throughout history. As Coase's Theory basically states, the enterprise exists because it can do things most efficiently and with reduced transaction costs as a unit. Before the cloud, the enterprise completed transactions, exchanged information, provided services, designed products, and accomplished other activities within its own four walls--with, perhaps, an occasional use of outside resources. The cloud now enables the enterprise to connect with parties on an as-needed basis and to tap into a shared pool of intelligence at will. As a result, CIOs and other business leaders are realizing that all expertise no longer must reside within the enterprise itself.Intelligence has, of course, always existed outside the enterprise, but it was inaccessible by most people because no mechanism existed for the owners of the intelligence to easily share it. With the cloud, people's ability to find this intelligence, use it, and leverage it has expanded greatly. Equally important, the cloud has created a whole new marketplace where the owners of this intelligence can sell their intelligence at a micro-level, making a sustainable profit from doing so. This marketplace brings together those who own the intelligence with those who want to buy it and use it as part of delivering services to their customers, and those who can benefit from having access to the intelligence (at a price) in the products they use. Commodity to Intelligence--the Next Step in the Cloud JourneyBy Suketu Gandhi, Partner, A.T. KearneyCXO INSIGHT
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