Cloud, a trend, an opportunity or a must?

Cloud computing is being discussed all over the place and seems the answer to everything, from cost reduction to increased agility. What’s the reality and why would a CIO focus on cloud, and then, what cloud? On the CloudSource blog, I nearly finished publishing a series on the business aspects of Cloud and want to give you some highlights. I’ll point you to the details if you wish to read them.

Let’s start with the business. What megatrends are enterprises confronted with? I typically group them in five buckets:

• The world demographics are changing. For the first time more people are living in cities than in the country side. The middleclass is growing fast and people grow older. This results in people becoming more health conscious and looking at a different lifestyle. It changes what they are looking for from companies.
• Business is becoming global; competition can come from anywhere and require companies to respond faster than ever.
• Social Media is hosting the new “pub discussions” and an incredible way to understand how a company and its products/services are seen by its customers. It’s a fantastic reservoir of ideas, of market intelligence that can be analyzed thoroughly by the ones ready to do so. It gives advanced companies a great mean to understand how to differentiate themselves.
• We all become increasingly mobile and expect to be always connected. Companies can build on this new phenomenon to improve their operations, change their products and invent new ways to interact with their customers.
• Sustainability is top of agenda for many countries, companies and consumers. It’s another opportunity to differentiate.

So, the business is looking to become more agile and responsive and this is particularly important in the current, volatile, market environment. To do that, companies should have a better understanding of their marketplace, customers, competition, partners etc. And obviously they want to do that at lower cost while freeing up as much capital as possible. So, the CIO is confronted with a need to respond faster to ever changing requirements while providing an increasingly flexible infrastructure. And that is where cloud comes in. It provides the required infrastructure at lower cost, potentially in an OPEX funding mode.

The retiring of the baby boomers over the next 5 years will confront both business and IT people with a new IT literate workforce that is expecting different communication and collaboration tools. Actually, after writing the blog entry on the CloudSource blog, I ran into an interesting study pointing out that the internet may actually transform the way young people’s brains operate. I’m not going to debate whether this is for the best or the worse, but just want to point this out as the new business generation is expecting different tools already today and this is only going to increase. IT better get ready and start providing what the business needs.

The result is that the CIO needs to look at his role in a completely different way. I’m calling the new approach the “strategic service broker”, in other words, the CIO is responsible to source services from different sources and makes them available to the business very quickly. He needs several things for this:

• An appropriate governance with the business to understand and prioritize the needs
• A sourcing team that can help him decide where he sources the service from (his traditional environment, his own private cloud or external providers)
• A flexible platform so he can deliver the service to the business from ONE central point regardless of where the actual service comes from

Cloud is there to stay, it may be called differently in the future, but the fundamental concept of running services on flexible environments owned either by the company or by service providers is a given. It’s an opportunity for the business to respond faster to the changing needs of their customers. IT has the choice, either provide the business with the flexibility and agility they need, or become a dinosaur that runs the legacy and is bypassed for most new requirements. The latter scenario leaves one question unanswered, and that is who is responsible for the overall security and compliance of the company, but that’s a whole different ballgame all together.