john dillonJohn Dillon is CEO of cloud platform company Engine Yard.

It seems like every week there is a new Platform as a Service (PaaS) or beta cloud offering hitting the market. Some vendors tout the benefits of social applications, others emphasize mobile; others talk about how the cloud can save you money or speed up development time. While these are important benefits of cloud services, there’s a much more key benefit that tends to get overlooked: cloud services let you focus on innovating your core business.

Coming from a cloud services company, my perspective is that spending precious time on non-essentials will kill you and sap your innovative juices. Apple outsources much of its manufacturing so it can concentrate on design. Its absolute focus on core competency is in large part what drives its success.

Laser focus on your core competency is key to your success. Anything that can be offloaded should be outsourced. It’s about “the last mile”. That’s where companies differentiate. That’s how you delight your customers. Using a cloud infrastructure and platform as a service lets you concentrate on that last mile instead of worrying about mundane, yet complex IT issues.

It’s hard to imagine any business getting competitive advantage by having a better load balancer or better database. The customers and end-users simply don’t care about the details as long as what you deliver works. They will care of course if the system is unavailable, is slow, or just doesn’t work well. There is no upside or competitive advantage to be gained by doing it yourself, only downside from doing it poorly. The notion that you can do everything well is dangerous. Why would you add those challenges to your task, when there are vendors at your disposal whose focus and scale is likely to exceed any investment you could make to address the same requirements?

These vendors can supply underlying system components more competently, reliably and at scale than you ever could without massive investment and opportunity cost. Organizations that outsource the infrastructure and the PaaS can focus all of their effort on innovation. And that’s how you win in a competitive market.

With this focus, a company can spend its effort focused on application refinement, application enhancement and new market expansion. That’s how you differentiate your business and that’s how you use IT to delight end users.

Companies that view PaaS as a cost savings or time-to-market solution are not wrong. But they often overlook the macro benefit — the capacity to empower IT innovation. Companies that drive phenomenal growth with a singular focus on differentiated products outsource infrastructure and operations staff. They know that the best way to win is with a relentless focus on innovation. They outsource what is essential, yet not core, and apply all their resources at the tip of their spear.

The cloud has evolved as a powerful tool for companies to deliver applications more rapidly and cost effectively. PaaS is the technology that harnesses the cloud into an engine for innovation. Companies using PaaS to save money and time in deploying their applications are on the right path, while the companies viewing PaaS as a means to innovate and differentiate in the market see the much larger potential.

CloudBeat 2011

CloudBeat 2011 takes place Nov 30 – Dec 1 at the Hotel Sofitel in Redwood City, CA. Unlike any other cloud event, we’ll be focusing on 12 case studies where we’ll dissect the most disruptive instances of enterprise adoption of the cloud. Speakers include Aaron Levie, Co-Founder & CEO of; Amit Singh, VP of Enterprise at Google; Adrian Cockcroft, Director of Cloud Architecture at Netflix; Byron Sebastian, Senior VP of Platforms at Salesforce; Lew Tucker, VP & CTO of Cloud Computing at Cisco, Vineet Jain, CEO and co-founder of Egnyte and many more. Join 500 executives for two days packed with actionable lessons and networking opportunities as we define the key processes and architectures that companies must put in place in order to survive and prosper. Register here. Spaces are very limited!