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What Low Oil Prices Mean for #Cloud Industry By @IanKhanLive | @CloudExpo

Perhaps regionally and industry wide, cloud may see a lower amount of investments coming in from energy companies

We all are well aware that oil prices have dropped to almost $45 per barrel as of mid-January 2015. Global economies are feeling the pressure from a sudden drop in crude prices, with a chance of a looming recession in some economies. What does this mean for global business and the cloud industry?

What Is Happening?
Maybe we had forgotten that a few select nations, the so-called OPEC members that include Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela, control a majority of the oil that is produced in the world today. These oil-producing nations together control the decisions around global oil production, oil supplies and as a result a large part of the global economy.

Canada and the United States
As major oil-dependent countries, both Canada and the United States are likely to be heavily affected. This is in spite of the fact that a lot of oil is produced within Canada and the United States today, but the laws of supply and demand are a major factor. For example, Alberta, which had a budget surplus of $1.5 billion a few months ago, is now facing a deficit of $500 million. Canada, as a country, is facing the overall pressure with some of the biggest companies slashing jobs (Suncor) and cutting almost $1 billion from next year's budget. Should the drop in prices continue, there will likely be much higher cutbacks.

What Does This Mean for the Cloud Industry?
The cloud industry spans numerous verticals. Perhaps regionally and industry wide, cloud may see a lower amount of investments coming in from energy companies. Work that's related to capital projects by oil companies are likely to be put on hold, cancelled or deferred. The cloud industry overall is likely to see a negative effect as a result, the full extent of which would be entirely dependent on the outlook of the global energy industry.

Regional Impact
Regionally OPEC countries are likely to experience minimal impact from the emerging crisis. Non-OPEC countries especially in the developed world are likely to be affected the most. Economies such as India and China that have a fast and stable GDP growth will probably remain stable, although they are likely to feel an impact as well.

How to Survive This Downturn?

  • Step 1. Conserve cash: Avoid heavy capital investments until the markets bounce back. If there are things that you can wait for, don't hesitate to take that option.
  • Step 2. Invest in Sales and Marketing: Improving your bottom line can only be done by going above and beyond what you are doing right now. A knee-jerk reaction would be to cut down on your efforts, but that would be a mistake. Ramping up parts of your business that will drive additional revenue and pave the way for a cash inflow should be given preference. This includes supporting marketing and creating a value proposition for your customers that they cannot refuse.
  • Step 3. Speed up the Funnel: Enable your whole organization to become leaner, faster and more aggressive. This includes empowering your sales and marketing teams to be able to move prospects down the funnel faster and to close opportunities even faster than before. Invest the cash you conserved from Step 1 into training your teams to live on the edge and capture the market.

More Stories By Ian Khan

CNN Futurist, Forbes Contributor, Author, 3 Time TEDx Speaker and Technology Futurist, over the last 20 years Ian Khan has had the privilege to serve the needs of over 5000 organizations by fueling their growth through technology solutions. He has helped a diverse set of businesses ranging from Technology Companies, Oil Companies, Power Generation & Renewables Operators, Microsoft Ecosystem Partners, SAP Customers and Partners, Healthcare Providers, Manufacturers, Facility Operators, Startups, Educational Institutions, Nonprofits & associations and more. Ian’s experiences with these organizations led him to a unique position of being able to identify the common challenges of growth for all these organizations. The bottom line as he found out, is that we all are hungry for success and want to grow and make a difference. Where we fall short is by failing to understand our environment and taking the right action within that environment. After 20 years serving the needs of the industry Ian’s natural pivot was to answer his calling and help organizations at a broader level understand what tomorrow brings. His work and study of all these organizations brought forward very unique perspectives that he now share through his work. Today, hands down, we live in the great time for humanity. Technology is a great thing, but it also has its victims. Many organizations of tomorrow will fail under the pressure of a fast changing world, much of which is fueled and driven by technology. Ian’s mission is to help organizations avoid that pitfall, and propel themselves into success in today’s era and go from digital disruption to digital transformation in the fastest and most sustainable way. This is the only way, according to him, we can together create limitless value, create solutions that are faced by us locally as well as by others around the globe, and make the world a happier place. Today Ian’s work spans working with people by delivering keynotes, consulting and by promoting his 7 –Axioms methodology through his book and workshops. He is also working on an ambitious project of releasing a documentary in spring of 2018 called Industry 4.0. Industry 4.0 will capture the thoughts and insights of some of the world’s leading thinkers and help us understand the 4th Industrial Revolution, Its Impact, and how we can all be have an opportunity to be part of the emerging future and make the right choices. For more information please visit www.iankhan.com

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