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Cloud’s trillion-dollar prize is up for grabs

McKinsey | Feb 26, 2021

Cloud value drivers McKinsey - Cloud’s trillion-dollar prize is up for grabsCloud has immense potential, but most companies are only scratching the surface. Recent research clarifies where the value lies—and how to capture it before competitors do.

More companies are starting to see the real benefits of cloud, 6 which has been long heralded as a catalyst for innovation and digital transformation, thanks to its ability to increase development speed and provide near-limitless scale. While Moderna’s success illustrates the business opportunities that cloud makes possible, it only scratches the surface of the potential value at stake.

A detailed review of cloud cost-optimization levers and value-oriented business use cases foresees more than $1 trillion in run-rate EBITDA across Fortune 500 companies as up for grabs in 2030 (see sidebar, “About the research”), a number that will grow as cloud facilitates the adoption of emergent technologies such as augmented reality and blockchain.

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This $1 trillion is less a prediction than an estimate of what should be possible, provided companies aggressively pursue the cloud opportunity—and a call to action, because early adopters will capture a disproportionate share of the total value.

The emergence of this immense value pool comes at a time of increasing competitive pressure on companies. Fast-moving digital players are creating a fluid business landscape and accelerating the pace of change. For CEOs, cloud adoption is not just an engine for revenue growth and efficiency.

Its speed, scale, innovation, and productivity benefits are essential to the pursuit of broader digital business opportunities, now and well into the future. Yet an overly narrow view of cloud-value economics and where value exists often keeps companies from achieving the desired outcomes.

Capturing value: Seven value drivers underpin the three dimensions

As companies assess the opportunities enabled by cloud, a detailed review of the sources of value can pinpoint where they need to focus their attention, people, and resources. Across the three dimensions, seven drivers of value can collectively generate more than $1 trillion in value (Exhibit 3).

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McKinsey value drivers of cloud - Cloud’s trillion-dollar prize is up for grabs

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