I left a short comment on the ebizq website a couple of days ago in response to the question ‘is the cloud right for my business?’
I thought I’d also post an extended response here as I strongly believe that this is the wrong question. Basically I see questions like this all the time and they are always framed and answered at the wrong level, generating a lot of heat – as people argue about the merits of public vs private infrastructures etc – but little insight. Essentially there are a number of technology offerings available which may or may not meet the specific IT requirements of a business at a particular point in time. Framed in the context of traditional business and IT models the issues raised often focus on the potentially limited benefits of a one to one replacement of internal with external capability in the context of a static business. Its usually just presented as a question of whether I provide equivalent IT from somewhere else (usually somewhere dark and scary) or continue to run it in house (warm, cuddly and with tea and biscuits thrown in). The business is always represented as static and unaffected by the cloud other than in the degree to which its supporting IT is (marginally) better or (significantly) worse.
If the cloud was truly just about taking a traditional IT managed service (with some marginal cost benefit) vs running it in house – as is usually positioned – then I wouldn’t see the point either and would remain in front of the heater in my carpet slippers with everyone else in IT. Unfortunately for people stuck in this way of thinking – and the businesses that employ them – the cloud is a much, much bigger deal.
Essentially people are thinking too narrowly in terms of what the cloud represents. It’s not about having IT infrastructure somewhere else or sourcing ‘commodity applications’ differently. These may be the low hanging fruit visible to IT folks currently but they are a symptom of the impact of cloud and not the whole story.
The cloud is all about the falling transaction costs of collaboration and the current impact on IT business models is really just a continuation of the disruptions of the broader Internet. As a result whilst we’re currently seeing this disruption playing out in the IT industry (through the commoditisation of technology and a move towards shared computing of all kinds) it is inevitable that other industry disruptions will follow as the costs of consuming services from world-class partners plummets and the enabling technology becomes cheaper, more configurable, more social and more scalable as a result of the reformation of the IT industry.
Essentially all businesses need to become more adaptive, more connected and more specialised to succeed in the next ten years and the cloud will both force this and support it. Getting your business to understand and plan for these opportunities – and having a strong cloud strategy to support them – is probably the single most important thing a CIO can do at the moment. Not building your own ‘private cloud’ with no expertise or prior practice to package or concentrating on trying to stop business colleagues with an inkling of the truth from sourcing cloud services more appropriate to their needs. Making best use of new IT delivery models to deliver truly competitive and world-class business capabilities for the emerging market is the single biggest strategic issue facing CIOs and the long term health of the businesses they serve. There is both huge untapped value and terrific waste languishing inside existing business structures and both can be tackled head on with the help of the cloud. Optimising the limited number of business capabilities that remain in a business’s direct control – as opposed to those increasingly consumed from partners – will be a key part of making reformed organisations fit for the new business ecosystem.
As a result the question isn’t whether the cloud is or will be ‘right’ for your business but rather how ‘right’ your business will be for the cloud. Those organisations that fail to take a broader view and move their business and technical models to be ‘right’ for the cloud will face a tough struggle to survive in a marketplace that has evolved far beyond their capabilities.