Enterprise IT faces a raft of technology shifts in the coming years. The deep penetration of mobile devices into the enterprise, the impact of social media and the technology to extract intelligence from greater and greater quantities of data, are a few important ones. But what stands out for the disruptive nature of its impact is the Cloud. The Cloud is truly paradigm-shifting for Enterprise IT.
What is so different about the impact of the Cloud? It is not so much about the opportunity of value creation. While the size of the prize is massive, that is true about the other technology shifts as well.
The Cloud is disruptive. It upends the current order of things in Enterprise IT. It shifts control away from IT towards Business. It dramatically changes the role of the CIO and her organization. And it changes the way we manage the business of IT in profound ways – like managing by business outcomes rather than by costs and intermediate IT outcomes.
Why is this so? Since the beginning of Enterprise IT, IT infrastructure, particularly the data center, has always been firmly rooted in IT. Even when outsourced, the outsourcing contract has been managed by the CIO’s organization and they remained accountable for its results. But today, Cloud service providers, run their own infrastructure that is common across all their customers and charge a fee for use. Sometimes they provide infrastructure services only. Often, its more. But always, using Cloud services means transplanting IT infrastructure outside the domain of the IT organization.
IT infrastructure may not directly create value, but business leaders understand the risks involved. Something that could bring your company’s order processing system to a halt is not to be trifled with. So why would an enterprise undertake the risk of such disruption?
Economics, for one. From what we have seen with our clients, the potential for savings range from attractive to downright stunning. But there are other reasons as well – flexibility, developer productivity, time-to-market – and as you get up to the application layer, soon, state-of-the-art functionality will exist only in SaaS applications.
But the biggest reason why the Cloud is unstoppable is because running a data center is not “core” to anybody’s business, except a handful of Cloud service providers. These providers run mega data centers at locations and at a scale where every element of performance and cost is carefully optimized. No company can match that. Enterprise IT will find it difficult to justify “build” over “buy” when it comes to data center infrastructure.
And the future will hold even greater specialization. For example, Intel is running trials with oil-cooled servers (photo above) which need only 2-3 % of their power for cooling (against the usual 50-60%). Today’s data centers are all set up for air-cooling. Can Enterprise IT deal with such shifts in technology?
No, I don’t think so. The Cloud is written in every Enterprise IT organization’s future.
Like most paradigm-shifting technologies, the switch-over may never be complete (I still have a VCR or two at home). But it is inevitable and once it gathers momentum it will be unstoppable.
Cloud adoption will be gradual at first. CIOs will start with new development on IaaS or PaaS. Some will migrate small, non-critical applications to the Cloud. SaaS applications have some momentum. But the bulk of the core enterprise applications still run in the data center. There is a long way to go.
The Journey to the Cloud will be long. There will be risks, and many challenges on the way. There will be existential questions like what is the role of the CIO in this brave, new world. But “there is gold in them thar hills”. It will be worth the ride.
Cross-posted from infosys.com with minor alterations. [link]