Tuesday, August 9, 2011

Cloud Is Not The End - It's The Means.

Once you get a new tool, you ask: What can I build that I couldn't before?

Cloud computing, at its core, is an operational transformation - mostly focused on infrastructure. If you're an enterprise IT shop, you're right to think that such a change will (ultimately) simplify your world. But simplification, faster time-to-provision, and on-demand capacity aren't the end points of IT transformation. They are the new tools that are the Means to a more aspirational end.

What every business craves is the ability to respond to new ideas (innovation) and to market pressures (competitive, consumers) faster and more completely - Agility.  A recent McKinsey study shows that the top 3 metrics of "agility" were centered on revenue growth rather than cost reduction - signalling that companies value growth over expense-cutting. And IT is the chief approach to enabling revenue growth for many  enterprises.

But merely having faster infrastructure is necessary but not sufficient for an enterprise to achieve real business agility.

My thesis is that Cloud computing - whether Private cloud, or a mix of Private/Public (Hybrid) - is really the means to a bigger end: Enabling IT to serve and enable the business, rather than simply respond to technology requests. Think of IT as an internal Service Provider (ITaaS) - developing, marketing, pricing and refining technology to meet the specific needs of Line-of-Business users.  Forrester research even makes the valid observation that IT (information technology) needs to undergo the conceptual transition to BT (business technology).

The Goal is IT (I'll continue to use the term for now) that is structured and goaled to serve the business. And that is a whole lot more than just providing a virtualized cloud infrastructure.  

A great overview of this ITaaS restructure was recently written in Chuck's Blog, where he outlines the skill, organizational, and financial transitions that must necessarily accompany the infrastructure transformation.

In his blog, Chuck cites an oft-used slide by John Peirce, EMC's VP of IT Infrastructure and Services.

This is a great analogy to how IT was traditionally (and will be) built and operated. In effect, IT will continue to progress toward an on-demand, if not cloud-like resource that business can tap into.

But consider the corresponding change to how the IT organization itself will be built, run, and operated. In fact, consider how IT skillsets will need to change, and how it will need to partner with the lines-of-business to ensure that they're equipped with the right technology at the right time.  In fact, if the "new" IT does its job right, it will even work with the business owner to understand their business better, and suggest new tools (think Big Data analytics, etc.) that might add even more value.

So I then got to thinking, we need a companion slide: That ITaaS transformation isn't about infrastructure only... it includes how IT works with the business as a Service Provider - at times actually competing for business against "Shadow IT" from external sources. There are for basic facets to think about this transition
  • From "monopoly" to "market": Rather than IT being "the only game in town", Shadow IT is causing indirect competition - where IT will have to offer and price services in a manner (and speed) that will cause internal customers to want to purchase from them.
  • From vertical to horizontal: where the organization shifts from stack-focused to service-focused. Literally, the orgcharts and skills-sets change over time. Chuck also does a great job of explaining EMC-IT's transformation over time)
  • From "enterprise tax" to consumerized pricing:  Rather than the fixed-price (frequently capital-expense) based pricing for standing-up a stack, IT will shift to a variable-priced model based on consumer needs and competitive pricing
  • From IT as a cost center to IT as a center of value, where IT teams with the LoB to create and offer services that move the business - whose job it is to generate revenue - forward.
These 4 areas don't necessarily assume there is a cloud infrastructure in place - and indeed, don't require one. But to get the value out of a cloud infrastructure, you do require to implement them.

The desired end-game is for the enterprise to be more competitive, responsive, and agile. Cloud is an enabler - but don't overlook what needs to be paired with technology to get the full effect.

In future Blogs I will plan to go deeper into each area, exploring best practices, as well as how our own EMC IT department is faring on their own journey.

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1 comment:

T Neelkanta Rao said...

hi..really a nice article.I am an IT professional and want make big in this line.