What is Cloud up to?

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There have been quite some changes since my last post. First I have taken some time off, hence you haven’t heard from me, and then I have moved roles, focusing more on the cloud space. And the more I dig into things, the more I realize that cloud is a paradigm shift. It’s probably the next wave in the evolution of information technology. It will transform the way we do business drastically. Things evolve quickly. It’s a full time job to keep up with what is happening in the space.

So, I started looking at the latest developments an scanned Gartner.  The 2010 Gartner Emerging Technologies Hype Cycle surprised me. On the one hand, it tells that cloud computing will reach mainstream in 2 to 5 years, and on the other, cloud computing has barely moved on the curve since 2009. We all know there still is quite some hype around the subject. Would this imply cloud will get a very mild “trough of disillusionment”, in other words that we will move very quickly from hype to mainstream? Interesting question?

The other interesting element to point out is the appearance of the “private cloud”, nearly at the “peak of inflated expectations”. It is clear that private cloud is gaining traction. An increasing amount of customers are talking about it and are looking at how they can implement this in their own environment. What many don’t realize is that, beyond the pure technology aspects, people are focusing on the business transformational aspects. This one is focused around two things:

• The transformation of IT into an internal service provider
• The evolution of IT to a shared service center

Let’s review both of those in a little more details. What is the business looking for? They want to have the opportunity to choose between a series of services they can start-up (in the cloud jargon we would say provision) quickly to address their needs. One of their key criticisms is that IT is unable to keep up with the pace of the business and that it forces them to find all sorts of workarounds to continue running the business despite inadequate IT systems. They want the services to be provided to them, they don’t care where a service is coming from.

That’s actually not completely correct as the business obviously wants to ensure they run operations in a compliant manner, but they would expect IT to ensure that’s the case.

IT has a unique opportunity to transform itself into an organization that provides those services. Whether they deliver those with their own hardware/software, or source them externally (e.g. from an outsourcer, an ASP, a SaaS provider) doesn’t really matter to the business. So, by implementing cloud technologies, IT becomes the strategic service provider to the business. To achieve this, however, a number of other elements need to be implemented. Indeed, the question remains on how to provide the right services to the business. A service governance and lifecycle management has to be implemented.

The line of business (LOB) people often complain about the cost of IT. Moving to cloud technologies has an additional benefit. It allows IT to transform itself into a service provider. Taking that one to the ultimate means, IT can become a shared services center. The pay-per-use approach of the public cloud can be used here also. This would lead to the business units paying IT for the services they are actually consuming. It would encourage IT to listen carefully to the business, understand their requirements and deliver the required functionality. It also helps understand which services are actually needed by the business and which are nice to have. Such market dynamics focuses the teams to deliver the right services faster and better.

Such transformation cannot be done overnight. It requires extensive change management. Actually the technological part is the easy bit. It’s the people and process side that is difficult and takes time.