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Can the promise of cloud computing live up to the hype? Part 1

Posted by Ian Cohen | 21 Feb 2011

Ian Cohen, CIO, Jardine Lloyd Thompson:

Ian Cohen, CIO, Jardine Lloyd Thompson: "Cloud is not a paradigm shift. It’s not a whole new world. It’s just change.”

I get somewhat disturbed by the term “cloud.” All the marketing and vendor hype surrounding it is confusing what should be a very important debate about the underpinning technologies and what they can do for your business.

All good CIOs know that they have to be, first and foremost, business leaders. But we are business leaders who have an area of expertise, and we must be able to apply that expertise — which is in how technology enables our businesses. That blend of business and technology acumen is now more important than ever.

The technology that underpins what vendors are calling “cloud computing” is rapidly maturing and does offer some interesting new opportunities, but I believe it’s important not to get carried away here.

It’s not a paradigm shift. It’s not a whole new world. It’s just change. It’s the same kind of change as when we went from the abacus to the mainframe, from mainframe to client/server, and so on. We live in a change industry. Change is what we’re all about, so there’s nothing out of the ordinary in that respect.

I am, however — as we all should be in these tough times — interested in the capex/opex shift that comes from utilizing these technologies, because I think it represents the possibility for a fundamental change to some of our business models.

I am also interested in the potential it has for removing some of the entry barriers to new markets that might otherwise have had a high capital-intensive set-up. And I am very interested in how the technologies will allow us to blend parts of our own infrastructure with the infrastructures of specific partners and public services.

But rather than talking about types of “cloud” — public, private, hybrid, whatever — we should be asking: Do these new models fit with our current sourcing decisions, be they hosting or hosted? And the answer is, in many cases: They absolutely do.

As CIOs — and increasingly this is a truly hybrid role — we need to focus the debate around the economics of our businesses and the appropriateness of the technologies to meet the strategic intent of our companies.

But we must not get wrapped up in the marketing spin and hype. We must focus on the practical aspects. CIOs and the rest of the technology profession have had a hard enough time acquiring sufficient language to engage in business discussions with business customers.

And now our profession — particularly the supply side — comes along and creates some nonsense term for what is actually, underneath, a very valuable and very business-critical technology.

I am worried that the reality of cloud can’t match the hype because it has been hyped out of all proportion. Also, just because it’s “the cloud” does not mean the basic disciplines of technology operations or sourcing can be ignored — they can’t.

So let’s focus on what the technology can do. And, like all new technologies — although in this case the concept is not that new — you need to dip your toe in the water and try it.

• Follow Ian Cohen on Twitter: @coe62

Do you agree with Ian Cohen? Have your say by commenting below — and see also a contrasting point of view from JP Rangaswami, chief scientist at Salesforce.com.

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4 comment(s)

Capex / Opex Split

February 21 2011

Buying computing, especially end-user computing such as desktop-as-a-service, drives almost all of the cost into the opex side of the equation, which can be very attractive, especially if you happen to be considering a Windows 7 migration or other highly disruption intervention.
I completely agree with you that this needs to be a business decision - letting a cloud service provider take care of the technology allows the business to focus on the change management and commercial implications.

Posted by Simon Payne

Not convinced...

February 24 2011

Whilst I wholeheartedly agree that the Cloud is over-hyped, and that business benefits should be the reason for implementing technology (and that technology generally at best can only facilitate business benefits occurring), I do believe that it is more of a paradigm shift than you.

The wake up call for me with Cloud was a couple of years ago when a business head in the company I then worked for told us in the IT group that he was implementing Salesforce. His business was somewhat different from the rest of the organisation, and the corporate Siebel implementation just wasn't working for them. The business head invited us to help, but was clear that he was going to implement the changes (and the technology) whether we supported him or not.

And here is the rub. The IT department can be circumvented entirely these days. Sure, many people in IT talk a good story about business change, but few have delivered, and mostly because we seem obsessed with the nuts and bolts of the technology, and mostly are disinterested in the business.

Even in the current Cloud hype, you can see that most vendors, integrators and end users are happier when they are talking about Infrastructure- or Platform- rather than Software-as-a-service. Complicated box-diagrams consisting of "layer models" and talk about "abstraction". Who in the real world uses such terms to describe using Facebook?

I'm sure that we will look back at this point in hindsight as the time when people stopped talking about computing, and it became both transparent and ubiquitous. The real revolution is happening now in the smart phones and tablets that increasingly are seen in the hands of all sorts of (non-technology) people. None of the incredible complexity of the mobile and apps ecosystem needs Corporate IT to function just fine. Increasingly, neither will IT in corporates.

Posted by Matt Ballantine

Violent agreement.... ish

February 25 2011

Hi Matt

Thanks for the comment - I think we agree way more than we disagree. It's definitely time to park the hype and techno babble (PaaS, SaaS, IaaS etc ) about the cloud itself and focus on what can be achieved using the underlying services, technologies and techniques. Your Facebook comment is well made - IT folks have always missed the simplicity of language..

I would also agree that mobile computing (led now by smart phones and tablets) is a fundamental change - maybe it's the always on always connected human behaviour that is the actual paradigm shift.

As for Salseforce; I've been an advocate for some time and the tale you recant will be familiar to many however I don't think it signals the death knell of the IT function.

Interestingly, I observe Salesforece now courting the CIO more than ever before - recognising that they can achieve deeper corporate relationships by working with him / her as opposed to bypassing them. To me the reason is clear - the really great CIOs will increasingly be seen as trusted advocates and advisers to their business colleagues and customers. In this regard they will actually be the hybrid CIOs we always talked about in quiet corners - ones who are as fluent with the technology as they are with the business. These characteristics MUST also be reflected in the IT Departments of the future that will be more about the collaborative creation and assembly of solutions rather than the still surprisingly pervasive "us and them" requirements tennis.

As always, JMHO but enjoying the exchange of views

Posted by Ian Cohen

Mis-matched competencies

February 26 2011

Hi Ian,

So we definitely are in agreement on much. I guess the challenge that I see is that, and let's be blunt here, whilst cultural and organisational business change should become the focus of how IT systems are introduced and adopted by organisations, most IT people are systems- (or even engineering-) rather than people-centric.

Is an industry that is dominated with people from an engineering background well placed to lead work around organisational development? It just feels that there are going to be a lot of people with the wrong competencies and career motivations sitting in IT departments in the coming years, trying hard to make sense of what they should do when all of the boxes that they used to feed and water have been sent for recycling.

There are a couple of strands of thought that I have seen explored in this area: the first is the rise of a new role, the Chief Collaboration Officer, that merges together competencies of exploiting IT services in a business context along with improving team working within organisations; and the second, the opportunities for transformational IT to work together with transformational HR to achieve a similar aim.

Either way, maybe it's a new language and a new department (with many new skills and techniques) that is required, rather than trying to shoe-horn IT into a new form into which it doesn't really fit. IT doesn't really have great brand presence, and even when we are doing great, new, innovative things (and my team has done in the past 18 months with incredibly successful introduction of cloud-based services), we tend to be tarred with the "have you tried rebooting it?" brush of our history.

Posted by Matt Ballantine

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