Create a Culture of Experimentation Enabled by the Cloud

“Speed matters in business” -Jeff Bezos

Keeping your business competitive in today’s market is hard, though in many that’s always been the case. Wired points out that, since its inception in 1955, the Fortune 500 has seen between 20 and 50 companies fall off the list each year. Technology has a lot to do with this steady rate of turnover. More specifically, the cloud has been one of the key, if not the key, enabler of this trend over the past few years. The cloud allows companies with a small amount of capital come out of nowhere and disrupt entire industries. AirBnB, Pinterest, Uber and Spotify, for example, didn’t even exist 10 years ago. Now they’re redefining entire industries with businesses powered by the cloud.

What do these disruptive companies (and most startups) have in common? They started as experiments. No one was sure whether or not they’d work.

Experiments are No Longer Just for Startups

The good news is that the cloud can help every company experiment and remain competitive, regardless of that company’s size or tenure. Having said that, the bigger the company and the more established its IT operations are, the more things may have to change to get the most out of the cloud.

For companies that are successful at maximizing the benefit of the cloud, change is seen as opportunity. These companies’ executives aren’t afraid to challenge the status quo, and creating a culture of experimentation is one of the most common changes these executives look to make. I was certainly trying to cultivate that type of culture when I was the CIO of Dow Jones. I’ve come to admire many other companies doing the same — Capital One, GE, Johnson & Johnson, and News Corp, to name just a few. All of these companies are relentless about challenging the status quo in an effort to keep up with their customers and stay ahead of their competitors.

This trend is the reason that creating a culture of experimentation has landed it’s spot as the third best practice on the enterprise Journey to the cloud. For those looking to create a culture of experimentation, this post serves as an introduction to what will be a miniseries on the topic. The remainder of the post focuses on how the cloud makes experimentation easier. I’ll dive deeper into how today’s technology executive can create a culture of experimentation in subsequent posts over the next few weeks.

How does the cloud make experimentation easier?

A market leadership position and access to capital aren’t enough to keep even the most well-established enterprises competitive today. Here are a few ways that the cloud makes experimentation easier, particularly for big companies.

You don’t need access to capital to experiment. Throughout my career, I’ve spent countless hours trying to justify the ROI on a capital investment for resources I thought were needed for a potential product. I was rarely, if ever, able to get capacity planning right, and almost always overbuilt my infrastructure. In a few cases, it took my team longer to justify an investment than it took to build the first version of the product. Because the cloud is pay-as-you-go and only-for-what-you-use, you no longer need months to justify what you can experiment with in days. Those just getting started have access to even simpler options. For example, some AWS services have free tiers, and cost nothing to try.

There are no costs to absorb for projects that don’t work out. Sometimes even the most compelling vision doesn’t end up a product/market fit. I’ve built my fair share of products that didn’t pan out. I’m not ashamed of this, because each time I learned something, but it sure does hurt to keep those assets on your balance sheet. It sometimes hurts worse to feel like you have to use those assets for something they weren’t intended for. Wasting a 16-core machine to run your company’s wiki page is, to state the obvious, less than ideal. Today, if your product doesn’t work out, you can spin down the resources and stop paying for them altogether.

The cloud is optimized for automation. Earlier this year, I wrote about the importance of automation in the cloud. I also wrote about how automation is important to companies looking to develop a DevOps competency. Leveraging automation to take care of tasks that can be repeated in software allows you to spend more time developing products that impact the company’s bottom line.

You can focus on the things that matter most. The cloud gets rid of much of the heavy lifting associated with enterprise IT. “We don’t do load balancers anymore, we just do load balancing,” Talen Energy’s Bruce Kantor told me recently. At the end of the day, this is what compels executives to adopt cloud as a platform across their entire business. It frees them of the burden of that heavy lifting and allows them to repurpose those precious resources toward the activities that drive revenue.

I’d love to hear what else you think should be covered on this topic.

Keep building,
–Stephen
@stephenorban
orbans@amazon.com

Note: Creating a culture of experimentation is the third of seven best practices I’m writing about in my new Enterprise Cloud Journey series. The remaining six are: provide executive support, educate staff, engage partners, create a center of excellence, implement a hybrid architecture, and implement a cloud-first policy. Stay tuned for more on each of these.