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Cloud Computing Turns Virtual Teams Into a Competitive Advantage

Collaboration in the cloud will fundamentally change the business ecosystem

Collaboration in the cloud is the future of business. Web 2.0 and cloud computing make it possible to solve the final challenge of coordination and management. If you're inside a larger enterprise, you can use collaboration in the cloud to compete with lean, nimble startups, or to better coordinate across different groups, offices, and divisions.

We've heard all the buzzwords before. Virtual companies. Offshoring. Free agent nation. But this time, it's for real. The future of business is no longer enormous, vertically integrated titans (anyone check Ford's stock price recently?), but rather small, nimble, federations.

Historically, the cost of coordination has outweighed the benefits of agility, which is why the virtual corporation had a hard time breaking through. But today's cloud technologies, with their ability to bridge the gaps between firms, and between businesses and consumers, are spawning a new generation of collaboration tools that slash the cost of coordination, unlocking a potential revolution in organization and management.

And thanks to the current economic crisis, the business world is ripe for revolution. The mantra of "too big to fail" has been proven yet another meaningless buzzword by the fall of corporate giants like GM and Citigroup. "Small is the new big" is taking its place, and this advice applies to both small businesses and major corporations.

In a down economy, survival depends on the classic small business strength of doing more with less, especially businesses that have been hit with layoffs. If you're not already outsourcing and offshoring, you will be soon. Flexibility is the name of the game, and collaboration technology is the key to achieving that flexibility in a swift and cost-efficient manner.

The result of this intersection between crisis, technology, and opportunity? Collaboration in the cloud will fundamentally change the business ecosystem, resulting in an explosion of virtual companies and nimble players, as well as savvy intrapreneurs within traditional firms.

A History of Collaboration and Collaboration Solutions
(The following section covers the history of collaboration and business. If one is to argue that a revolution is at hand, it's necessary to provide the story of how we arrived at the pivotal moment. If you're already convinced, and want to skip to practical tips on how to survive and thrive during the revolution, skip ahead to the next section, "How Does Collaboration Help Me Do More With Less?" And now, back to the story.)

Wikipedia (itself an exemplar of massively parallel collaboration) defines collaboration software as "Software designed to help people involved in a common task achieve their goals." In the end, collaboration is the heart of business. The purpose of the firm is to organize a group of people to accomplish a common task that they could not complete on their own. Capitalism is collaboration. Trade, comparative advantage, and Adam Smith's invisible hand all presume the presence of collaboration.

The evolution of capitalism and the rise of the corporation is the story of collaboration. Financiers collaborate with industrialists. Workers collaborate on assembly lines. Corporations exist to provide the necessary infrastructure for collaboration.

Historically, much of that infrastructure was physical. Factory workers need a factory to house their assembly line. Office workers need an office so that they can hold meetings and create, store, and exchange documents. The costs of coordination were such that economies of scale tended to dominate.

Assembling an automobile is an enormously complicated task, and assembling millions of automobiles requires a degree of precision and coordination that didn't exist before the rise of the corporation. It made sense for Henry Ford to vertically integrate his company, since the costs (both monetary and in terms of productivity) to organize a federation of small firms and individuals to carry out the litany of tasks involved in producing Model Ts would have been prohibitive in the extreme. Collaboration took the form of work rules, memos, and meetings, primarily within the enterprise.

More Stories By Chris Yeh

Chris Yeh is Vice President of Enterprise Marketing, PBwiki.

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