The Strategic Case for Cloud-native: Developing a Business Perspective of Cloud-native Applications

Christopher Algier & Jeppe Bangskjær

Student thesis: Master thesis

Abstract

By providing cost-effective and on-demand IT infrastructure, cloud computing has evolved to become an integral part of organizations’ business operations. On cloud-based infrastructure, organizations run applications to perform business-critical processes, e.g. communication services or resource planning systems. However, the cloud-maturity level of the applications within an organization influences the degree to which the benefits of cloud-based infrastructure can be leveraged. The term cloud-native describes applications that are designed with the intention to fully leverage the benefits of cloud-based infrastructure and has received increasing attention in both practical and academic contexts in recent years. Although a noticeable amount of research has been conducted on how to transform existing legacy applications to cloud-native from a technological perspective, little is known about the business value of cloud-native. Consequently, the research aims to fill the gap in academic research around the strategic implications of implementing cloud-native applications (CNAs). To operationalize an investigation of the strategic implications of CNAs, an initial conceptual model is crafted based on the academic literature on CNAs and the Digital Business Strategy framework developed by Bharadwaj et al. (2013). The conceptual model is examined with semi-structured interviews in the context of two companies employing CNAs. Overall, the multi-case study finds that the characteristics of CNAs enable the realization of the four themes of Digital Business Strategy, namely, scope, scale, speed, and sources of value creation and capture. Moreover, twelve distinct strategic implications from CNAs are presented in the revised conceptual model coined the “The Cloud-Native Strategy Model”. The Cloud-Native Strategy Model predominantly reflects beneficial strategic implications arising from CNAs. Yet, the model also incorporates drawbacks from implementing CNAs. Subsequently, these strategic implications are found to impact overall business performance. Hence, business and IT managers need to carefully consider the implementation of CNAs based on the organization’s individual cost-benefit-ratio. The Cloud-Native Strategy Model presented in this research can provide a comprehensive decision-making aid for this managerial assessment.

EducationsMSc in Business Administration and E-business, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2020
Number of pages120
SupervisorsNiels Bjørn-Andersen