The cloud is now, quite literally, everywhere. IT end-users interact with the cloud on a daily basis, organizations are engaged in cloud services at all times, and the cloud powers much of the way business operates today. The business benefits of cloud computing are now well-established and acknowledged, yet 37% of IT decision makers think staff have bought cloud services outside of the IT department without permission – meaning not everyone has thought the process through as well as they probably should have.
The cloud journey has now become a strategic imperative and no longer just a tactical IT choice – greater flexibility, improved productivity, increased collaboration, remote working and greatly reduced CAPEX can all be found through a smart cloud policy. But as with any strategic business initiative, making the right choices of suppliers, partners and relationships is the route to these dividends. And put simply, the cloud has gone mainstream.
So how do you ensure that you get these choices right and maximize the benefits of cloud computing to your organization while minimizing risk? Well, in all honesty, it genuinely depends on where you are starting from.
the greenfield approach
Companies and organizations which are taking a “greenfield approach” to cloud computing face a different set of challenges. Coming from this angle, the most beneficial way forward can be the lease and configure model. Instead of having to go on out and buy expensive hardware, and then also manage it, organizations are finding value in the managed services route. The main advantage here to “greenfield companies” is that they can simply pay a leasing fee and have their cloud solution specified and configured precisely to meet their needs.
What this means is that start-up companies or start-up divisions can operate independently and go straight into the cloud. They don’t need to set anything up, whether that is databases or ERP tools, and they are freeing themselves from risk and also responsibility. They enjoy all the benefits of the “greenfield approach”, under which they can test out new initiatives and processes, while just paying a fee for their expert partner to service their storage, virtual machines and applications in the cloud. It can very much be argued that companies in this category can make the move to the cloud more easily than their more established counterparts.
More mature companies and organizations can face a more complicated time of it however. If they have greater experience, have existing IT assets on their balance sheet and have a range of business processes in place, then they face a trickier journey into the cloud. By being in the “brownfield” category they can’t simply plug into managed cloud services without a transformation journey – they have to transform their existing operations and systems to the new environment.
These companies also have to address the financial equation which centers on those existing assets, while also managing greater levels of fear, uncertainty and risk than their “greenfield” peers. Meaning they are often in the market for a trusted third party who they can partner with and agree on the required Service Level Agreements (SLAs).
changing times for the CIO
Each of these approaches however means a range of challenges for the CIO. In days gone by the CIO needed to have in-depth technical skills and knowledge, and true IT project management expertise – today the CIO needs to be much more commercially and partnership savvy.
Today’s CIO must specialize in partnerships and relationships, SLAs and vendor management – in essence, the CIO has transformed too, from technologists to commercial decision-maker. In addition to far greater commercial know-how in general, today’s CIO needs to be much more marketing aware to leverage the opportunities that social media and mobile cloud apps offer in marketing leverage.
So whether the “greenfield” or “brownfield” approach, the burden when formulating that essential cloud strategy falls on the company CIO and IT department. They no longer have to build, install and operate systems, they need to specify, partner, transition, configure and manage commercial outcomes. The worldwide cloud market is forecast to grow from $40.7 billion in 2011 to $241 billion in 2020, and research regularly places cloud high among CIO priorities.
So a different way of thinking is required, since organizations are no longer just picking products and boxes, they are picking partners and service providers. The old approach of buying the market leading product vendor to reduce the risk of technical obsolescence no longer applies. CIOs are now charged with helping make corporate IT agile, flexible and relevant to market discontinuities. Cloud computing, as a disruptive technology, was always going to disrupt the CIO’s traditional way of doing things. CIO’s now need to help reduce the risk of business model obsolescence.
The pace of technological change is accelerating and driving business model change. The CIO challenge has moved from technology obsolescence to business model obsolescence if IT cannot support the business model changes.
photo credit: © Maygutyak - Fotolia.com
I'm the former Managing Director for Australasia. I was responsible for developing and managing the business solutions portfolio and for driving strategic direction & initiatives for Orange Business Services in the region.