You may already be familiar with the benefits of cloud technology on business processes and the bottom line, but there's another element to consider which is its ability to encourage innovation. A Forbes Insights study shows 93 percent of leaders agree that cloud-based collaboration tools do spur innovation.

So clearly upper management is on board with the cloud as a way to fundamentally transform an organization.

With that said, innovation from cloud technology can occur in a number of ways:

Adaptability - With a cloud-based infrastructure, companies can change direction quickly without making large capital investments. Perhaps a competitive firm has a new service that supplants a company's now outdated solution. To adjust to this new reality requires fast thinking and either a refinement of the product or a push to new directions. Cloud technology enables such moves through collaboration and information sharing that allows companies to quickly build and test prototypes for a faster go-to-market solution.

Personalization driven by context - The cloud can store vast amounts of information due to cost-effective capacity and the use of limitless computing power. The information stored by companies can include user-defined data, which can now be leveraged to offer hyper-relevant offers and experiences. Consider the experience using Apple's Siri which uses cloud-based learning to gain an "understanding" of the user's preferences and then deliver contextually-based recommendations. Which companies will capture and retain the most customers? The ones that innovate through more personalized experiences, which are created from behind-the scenes cloud-based data.

Connectivity - Cloud technology drives companies to collaborate with partners and customers, which can result in opportunities for innovation. This is happening in healthcare, where various stakeholders such as payers, healthcare providers, practitioners and administrators can better work together to share information for better care that is delivered at lower cost. It also occurs within manufacturing supply chains, where cloud-based applications are simplifying the conversations between suppliers and customers. Manufacturers can then automate various tasks and remove bottle-necked scenarios for faster fulfillment times.

Here are two real-world examples of cloud-based innovation in action:

1. Home improvement retailer Lowe's consistently had challenges in stocking needed supplies ahead of bad winter weather, floods, and other similar weather related issues. The company began working with Accu Weather which holds a massive amount of data which is all stored on Microsoft's Azure Cloud infrastructure platform. Lowe's leverages this data to plan for disasters more efficiently, for example by moving snow blowers, salt, and other supplies to areas that were most likely to be hit by blizzards. Cloud technology delivers this data instantly, so smart decisions can be made in real time.

2. Kaggle, a predictive modeling and analytics company matches companies that need specialized research with a pool of scientists and other experts. The team at Kaggle needed more scalability and turned to the Azure platform to handle large clients and massive sets of data. Their work with Microsoft included moving the database to Microsoft SQL Azure, which added some streamlined automation to the process. The scalability of the cloud allows the site to handle spikes in users, giving the company the freedom to come up with new and innovative competitions which can attract large numbers of users.

With cloud technology, realizing business innovation doesn't come out of thin air. It still requires talented staff and great ideas. However, cloud-based services and infrastructure do allow this innovation to be more impactful, more cost effective, and implemented quickly for the most impact. Companies that want to harness the full power of cloud adoption should work with a qualified partner to find the areas that are most primed for innovation.