Here's an interesting interview with our friend Nick Carr in which he once again highlights important long-term strategic issues for enterprise IT. I've pulled out some of his quotes for quick review:
- "..there is a basic conflict of interest that IT departments face as they think about the cloud, and that's true, of course, of any kind of internal department that faces the prospect of being displaced by an outside provider."
- "... if one of your competitors moves to more of a cloud operation and saves a lot of money, then whether your IT department likes it or not, you're going to have a competitive necessity to move in that same direction."
- "...People who are so plugged into social networks at home or at school, they're going to want those same capabilities at work. It's really driven by the user because it upsets the traditional IT apple cart. IT departments and staffers will generally drag their feet and then will play catch-up."
- "...That doesn't mean IT shops won't continue to exist and have important functions -- they might have even have some more important functions -- but it does mean that their traditional roles are going to change and they're going to have to get used to, I think, having a lot fewer people and probably having considerably lower budgets."
So what's a CIO to do?
I wrote about how Bechtel's CIO embraced the Cloud. The CIO's IT infrastructure goals should be twofold: (1) the relentless pursuit of efficiency (i.e., operating costs for a given level of computing capacity) and (2) the search for reliability, flexibility and scalability in support of mission-critical data and applications. Cloud computing and cloud storage solutions don't address these issues in all IT cases today, but the relevance of these progressive solutions applies to a greater and greater percentage of the IT pie with each passing month. In other words, keep an open mind about the cloud.
Cloud computing won't go away, but Carr is right to say it's a long-term trend. The hosting industry, broadly defined, has recently completed its first decade of life, and is now early in its second decade. As one of the pioneers of the hosting industry, I agree with Carr's forecast that the Cloud Computing trend still has another 15 years or so to run full course. But the opportunities for enterprise IT are very real now, and will continue to become more real - and more strategic - over time.
whurley talks about this as well in his blog post: "IT needs to get over its cloud denial, or management will get over IT."
Well said.
One more point of note. The NY Times reports: "In February, Salesforce reported a 34 percent rise in fourth-quarter revenue, to $290 million, and net income of $14 million, up from $7.4 million in the same period last year. The sales and earnings figures beat analysts' expectations."
Looks like the down economy is accelerating SaaS adoption.
- "..there is a basic conflict of interest that IT departments face as they think about the cloud, and that's true, of course, of any kind of internal department that faces the prospect of being displaced by an outside provider."
- "... if one of your competitors moves to more of a cloud operation and saves a lot of money, then whether your IT department likes it or not, you're going to have a competitive necessity to move in that same direction."
- "...People who are so plugged into social networks at home or at school, they're going to want those same capabilities at work. It's really driven by the user because it upsets the traditional IT apple cart. IT departments and staffers will generally drag their feet and then will play catch-up."
- "...That doesn't mean IT shops won't continue to exist and have important functions -- they might have even have some more important functions -- but it does mean that their traditional roles are going to change and they're going to have to get used to, I think, having a lot fewer people and probably having considerably lower budgets."
So what's a CIO to do?
I wrote about how Bechtel's CIO embraced the Cloud. The CIO's IT infrastructure goals should be twofold: (1) the relentless pursuit of efficiency (i.e., operating costs for a given level of computing capacity) and (2) the search for reliability, flexibility and scalability in support of mission-critical data and applications. Cloud computing and cloud storage solutions don't address these issues in all IT cases today, but the relevance of these progressive solutions applies to a greater and greater percentage of the IT pie with each passing month. In other words, keep an open mind about the cloud.
Cloud computing won't go away, but Carr is right to say it's a long-term trend. The hosting industry, broadly defined, has recently completed its first decade of life, and is now early in its second decade. As one of the pioneers of the hosting industry, I agree with Carr's forecast that the Cloud Computing trend still has another 15 years or so to run full course. But the opportunities for enterprise IT are very real now, and will continue to become more real - and more strategic - over time.
whurley talks about this as well in his blog post: "IT needs to get over its cloud denial, or management will get over IT."
Well said.
One more point of note. The NY Times reports: "In February, Salesforce reported a 34 percent rise in fourth-quarter revenue, to $290 million, and net income of $14 million, up from $7.4 million in the same period last year. The sales and earnings figures beat analysts' expectations."
Looks like the down economy is accelerating SaaS adoption.
Carr also tells us (on his blog) that 20 percent of all the server computers being sold in the world "are now being bought by a small handful of internet companies," including Microsoft, Google, Yahoo and Amazon. And this is before cloud-computing has taken off.
I think Carr is too cautious in his assessment. There is a meltdown coming. Most traditional IT shops will have to get into the cloud, or perish.
It's the economics, stupid!