REVISED MARCH 11, 2021
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MOHANBIR SAWHNEY KE1168
CloudStrat: Managing Migration to the Cloud
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, TEACHING NOTE: CLOUDSTRAT KE1168
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Table of Contents
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Quick Start Guide ..................................................................................................................... 3
Key Information.................................................................................................................... 3
Running the Simulation ........................................................................................................ 3
Getting Started .......................................................................................................................... 3
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Teaching Note........................................................................................................................... 4
Overview............................................................................................................................... 4
Synopsis ................................................................................................................................ 5
Learning Objectives .............................................................................................................. 5
Supplemental Materials ........................................................................................................ 6
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For Instructors ................................................................................................................... 6
For Students ...................................................................................................................... 6
Student Experience ............................................................................................................... 6
Game Model, Strategies, and Analysis ................................................................................. 9
Behind the Scenes (How CloudStrat Works) .................................................................... 9
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Strategies for Playing the Game ..................................................................................... 17
Examples of Successful Strategies.................................................................................. 27
Common Strategy Mistakes............................................................................................ 30
Key Lessons and Takeaways from Successful Strategies ............................................... 31
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Teaching Plan ..................................................................................................................... 32
Appropriate Uses ............................................................................................................ 32
Assignment Questions .................................................................................................... 32
Prior to Class................................................................................................................... 32
During Class ................................................................................................................... 35
Technical Guide ...................................................................................................................... 38
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Adopting the Simulation and Enabling Student Access ..................................................... 38
Help Resources ................................................................................................................... 39
Simulation Overview .............................................................................................................. 40
Student User Screens .......................................................................................................... 40
Introduction..................................................................................................................... 40
Dashboard ....................................................................................................................... 43
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Reports ............................................................................................................................ 44
Decisions......................................................................................................................... 55
Appendix: CloudStrat Evaluation Rubric (Strategy Component) ........................................... 57
2
, KE1168 TEACHING NOTE: CLOUDSTRAT
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Quick Start Guide
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Key Information
Author Mohanbir Sawhney, Kellogg School of Management
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Players/Scenarios/Roles Single player or teams; multiple scenarios
Asynchronous Play? Yes
In-Class or Out-of-Class Play Either
Teaching Points Digital disruption, competitive strategy, product strategy,
cannibalization, customer segmentation, business model
transition, technology marketing, dynamic decision
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making, pricing strategy, profitability, systems thinking
Target Audience Advanced undergraduate, graduate, MBA, or executive
audiences where any of the above subjects are taught
Accompanying/Supplemental Material Case Study, Teaching Note, Author Introduction Video,
and Introduction to System Dynamics Slides
Approximate Time Required Student Preparation: 60 minutes (prior to class)
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Simulation Play: 60 minutes (prior to class)
Debrief: 60–90 minutes
Running the Simulation
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Technical specifications for this simulation can be found here: https://hbsp.harvard.edu/tech-
specs/ and http://forio.com/hbp-support/#check/simulations/all. The typical steps for setting up and
running this simulation are as follows:
1. In the simulation setup tab, click “Set up a new run.” The class can play multiple runs of
the simulation if the instructor chooses.
2. Customize the simulation’s scenario and weighted measurements for your class needs.
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3. Ensure all students are populated into the simulation. Students are assigned as individuals
by default. If choosing team play, go to the “Manage Teams” tab to populate the teams.
4. Open the simulation for play. Students will play prior to class, giving the instructor time to
review results before the in-class debrief.
Getting Started
Do
This guide is designed to assist instructors in using the simulation CloudStrat: Managing
Migration to the Cloud.
The Teaching Note section gives specific information related to the learning
objectives and debrief for the simulation.
, TEACHING NOTE: CLOUDSTRAT KE1168
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The Technical Guide section reviews the process by which an instructor adopts and
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uses the simulation, as well as how to grant access to the students.
The Simulation Overview section provides screenshots of the game, along with
descriptions of user and administrative screens.
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Teaching Note
Overview
The CloudStrat simulation explores a problem that technology companies commonly face,
namely, the threat of disruption. Disruption may arise from a variety of sources. For instance,
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disruption could arise from the invention of a substitute technology (e.g., streaming video as a
substitute for DVDs), the creation of a new business model (subscription-based software), the
emergence of a new channel (e.g., e-commerce or mobile commerce) or new ways of connecting
buyers with sellers (e.g., on-demand marketplaces like ridesharing). One of the most widespread
and ongoing disruptions in the software industry at the turn of the millennium was the emergence
of the cloud-based model of software and services. This model, pioneered by companies such as
Salesforce.com starting in 1999, represented a radically different approach to designing,
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developing, delivering, and paying for enterprise software. Instead of an up-front payment of a
large license fee, software would be designed to be delivered over a network and priced using a
subscription model. This model, known as SaaS, or software as a service, is also utilized by
companies providing infrastructure (IaaS) or platform (PaaS) services. More than two decades after
the introduction of SaaS, major technology companies such as Microsoft, Oracle, IBM, and Adobe,
almost exclusively offer their enterprise software with the cloud-based delivery and monetization
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model.
The transformation from traditional premise-based software and services to a cloud-based
model is not easy. Many companies have struggled with this transition. The transition requires a
careful balance between protecting the legacy business and revenue streams while transitioning to
the new cloud-based business model. If this transition is done too slowly, the company may lose
out on the market opportunity and be overtaken by its cloud-based competitors. On the other hand,
if a company moves too aggressively to the new business model, it runs the risk of cannibalizing
No
and eroding revenues of its legacy products. Managing this transition successfully requires
carefully balancing the timing of the transition and the investments needed to develop and enhance
the company’s legacy and new products.
The CloudStrat simulation provides a realistic and contemporary look at the challenges faced
by companies as they transition their business model from legacy software and services delivery to
a cloud-based model. Although the simulation focuses on the software industry, similar challenges
and issues are emerging even in more traditionally slow-to-change industries, making the essential
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takeaways broadly applicable for students. Products in a wide variety of industries are becoming
“servicized” and connected to the cloud—for example, automakers such as Tesla offer software
updates to their products over a network. Fitness product providers like Peloton and Nordic Track
have attached cloud-based subscription services to exercise equipment.
4
t
os
rP
MOHANBIR SAWHNEY KE1168
CloudStrat: Managing Migration to the Cloud
yo
op
tC
No
Do
, TEACHING NOTE: CLOUDSTRAT KE1168
t
Table of Contents
os
Quick Start Guide ..................................................................................................................... 3
Key Information.................................................................................................................... 3
Running the Simulation ........................................................................................................ 3
Getting Started .......................................................................................................................... 3
rP
Teaching Note........................................................................................................................... 4
Overview............................................................................................................................... 4
Synopsis ................................................................................................................................ 5
Learning Objectives .............................................................................................................. 5
Supplemental Materials ........................................................................................................ 6
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For Instructors ................................................................................................................... 6
For Students ...................................................................................................................... 6
Student Experience ............................................................................................................... 6
Game Model, Strategies, and Analysis ................................................................................. 9
Behind the Scenes (How CloudStrat Works) .................................................................... 9
op
Strategies for Playing the Game ..................................................................................... 17
Examples of Successful Strategies.................................................................................. 27
Common Strategy Mistakes............................................................................................ 30
Key Lessons and Takeaways from Successful Strategies ............................................... 31
tC
Teaching Plan ..................................................................................................................... 32
Appropriate Uses ............................................................................................................ 32
Assignment Questions .................................................................................................... 32
Prior to Class................................................................................................................... 32
During Class ................................................................................................................... 35
Technical Guide ...................................................................................................................... 38
No
Adopting the Simulation and Enabling Student Access ..................................................... 38
Help Resources ................................................................................................................... 39
Simulation Overview .............................................................................................................. 40
Student User Screens .......................................................................................................... 40
Introduction..................................................................................................................... 40
Dashboard ....................................................................................................................... 43
Do
Reports ............................................................................................................................ 44
Decisions......................................................................................................................... 55
Appendix: CloudStrat Evaluation Rubric (Strategy Component) ........................................... 57
2
, KE1168 TEACHING NOTE: CLOUDSTRAT
t
Quick Start Guide
os
Key Information
Author Mohanbir Sawhney, Kellogg School of Management
rP
Players/Scenarios/Roles Single player or teams; multiple scenarios
Asynchronous Play? Yes
In-Class or Out-of-Class Play Either
Teaching Points Digital disruption, competitive strategy, product strategy,
cannibalization, customer segmentation, business model
transition, technology marketing, dynamic decision
yo
making, pricing strategy, profitability, systems thinking
Target Audience Advanced undergraduate, graduate, MBA, or executive
audiences where any of the above subjects are taught
Accompanying/Supplemental Material Case Study, Teaching Note, Author Introduction Video,
and Introduction to System Dynamics Slides
Approximate Time Required Student Preparation: 60 minutes (prior to class)
op
Simulation Play: 60 minutes (prior to class)
Debrief: 60–90 minutes
Running the Simulation
tC
Technical specifications for this simulation can be found here: https://hbsp.harvard.edu/tech-
specs/ and http://forio.com/hbp-support/#check/simulations/all. The typical steps for setting up and
running this simulation are as follows:
1. In the simulation setup tab, click “Set up a new run.” The class can play multiple runs of
the simulation if the instructor chooses.
2. Customize the simulation’s scenario and weighted measurements for your class needs.
No
3. Ensure all students are populated into the simulation. Students are assigned as individuals
by default. If choosing team play, go to the “Manage Teams” tab to populate the teams.
4. Open the simulation for play. Students will play prior to class, giving the instructor time to
review results before the in-class debrief.
Getting Started
Do
This guide is designed to assist instructors in using the simulation CloudStrat: Managing
Migration to the Cloud.
The Teaching Note section gives specific information related to the learning
objectives and debrief for the simulation.
, TEACHING NOTE: CLOUDSTRAT KE1168
t
The Technical Guide section reviews the process by which an instructor adopts and
os
uses the simulation, as well as how to grant access to the students.
The Simulation Overview section provides screenshots of the game, along with
descriptions of user and administrative screens.
rP
Teaching Note
Overview
The CloudStrat simulation explores a problem that technology companies commonly face,
namely, the threat of disruption. Disruption may arise from a variety of sources. For instance,
yo
disruption could arise from the invention of a substitute technology (e.g., streaming video as a
substitute for DVDs), the creation of a new business model (subscription-based software), the
emergence of a new channel (e.g., e-commerce or mobile commerce) or new ways of connecting
buyers with sellers (e.g., on-demand marketplaces like ridesharing). One of the most widespread
and ongoing disruptions in the software industry at the turn of the millennium was the emergence
of the cloud-based model of software and services. This model, pioneered by companies such as
Salesforce.com starting in 1999, represented a radically different approach to designing,
op
developing, delivering, and paying for enterprise software. Instead of an up-front payment of a
large license fee, software would be designed to be delivered over a network and priced using a
subscription model. This model, known as SaaS, or software as a service, is also utilized by
companies providing infrastructure (IaaS) or platform (PaaS) services. More than two decades after
the introduction of SaaS, major technology companies such as Microsoft, Oracle, IBM, and Adobe,
almost exclusively offer their enterprise software with the cloud-based delivery and monetization
tC
model.
The transformation from traditional premise-based software and services to a cloud-based
model is not easy. Many companies have struggled with this transition. The transition requires a
careful balance between protecting the legacy business and revenue streams while transitioning to
the new cloud-based business model. If this transition is done too slowly, the company may lose
out on the market opportunity and be overtaken by its cloud-based competitors. On the other hand,
if a company moves too aggressively to the new business model, it runs the risk of cannibalizing
No
and eroding revenues of its legacy products. Managing this transition successfully requires
carefully balancing the timing of the transition and the investments needed to develop and enhance
the company’s legacy and new products.
The CloudStrat simulation provides a realistic and contemporary look at the challenges faced
by companies as they transition their business model from legacy software and services delivery to
a cloud-based model. Although the simulation focuses on the software industry, similar challenges
and issues are emerging even in more traditionally slow-to-change industries, making the essential
Do
takeaways broadly applicable for students. Products in a wide variety of industries are becoming
“servicized” and connected to the cloud—for example, automakers such as Tesla offer software
updates to their products over a network. Fitness product providers like Peloton and Nordic Track
have attached cloud-based subscription services to exercise equipment.
4
