IT’s Future in the cloud

IT has been around in corporate America for a long time… surely most of my life time and likely that of anyone reading. We have all become pretty used to this profession and have planned our livelihood around it.

Some pundits are forecasting a major sea change. They say IT is going to become a utility in “The Cloud” and our jobs will disappear or change dramatically. Even the stodgy old The Economist has said “”The rise of the cloud is more than just another platform shift that gets geeks excited. It will undoubtedly transform the information technology (IT) industry, but it will also profoundly change the way people work and companies operate. It will allow digital technology to penetrate every nook and cranny of the economy and of society, creating some tricky political problems along the way.” Such talk sells. It’s simple sensationalism.

While we should take the hype with a grain of salt, there is much merit. Nicholas Carr received a lot of bad press, but in Does IT Matter and The Big Switch he presents a very rational argument when he compares IT to the rail system and electrical grid. Unfortunately, many people seemed to have just looked at the title and skimmed a few pages and missed his point. Yes, IT matters, greatly, to everyone. All businesses have to have IT services. But just because it is ubiquitous does not mean its strategic. All businesses need electricity too, but we know longer see huge organization fiefdoms headed by a VP of Electricity in the corporate org chart.

Carr writes:

When a resource becomes essential to competition but inconsequential to strategy, the risks it create become more important than the advantages it provides… As the infrastructure matures, the companies that succeed will not be those that reflexively pursue innovation … but rather those that are pragmatic in planning and competent in execution.

Again, we should not advocate the “Chicken Little” posture. This change will be a gradual evolution, not revolution. But as Michael Dell has said, “in the long run, all technology tends towards low-cost standards”. We IT managers tend to overvalue our services and discount “good enough” third-party solutions delivered cheaper. In late 2011, Gartner predicted that by 2015, 35 percent of enterprise IT expenditures for most organizations will be managed outside the IT department’s budget. According to PWC’s 2011 “Digital IQ Survey”, at 100 of those that PWC ranks as “top performers”, IT controls less than half of the corporate technology spend. And of course, The Cloud has its own set of risks.

Accordingly, you will see many of posts here referencing the subject of cloud computing and transformation of IT. All IT people – actually anyone selling to or involved with IT – should read Does IT Matter.