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The cloud computing business model is evolving into a compelling platform for service innovation that is transforming the behavior of users and organizations to disrupt existing markets and create new ones. The essential advantage of cloud computing derives from the ability to leverage IT to engage users and other actors in the creation of innovative value propositions and to reengineer existing ones. For IT organizations and enterprises, a transition to cloud-oriented services occurs when an application migrates to the cloud with minimal changes to its design and delivery continues to support current performance and security requirements. For a cloud-based service transformation, much more is required. IT objectives drive larger, comprehensive application changes. Transforming the IT organization to embrace cloud-based service innovation involves rethinking and redesigning the organization’s approach to its customers. This chapter covers service transformation strategies, business models, and a framework for the transformation process.
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