A recent Forrester Research report surveyed 178 IT executives and found that slightly over half of them planned to institute a new IT model within three years. Even if you discount the IT layoffs and relatively flat or reduced IT budgets since the start of the Second Great Depression, a lot of CIOs think IT groups are prime for a complete make-over.
So what could be behind their thinking? Some of their concern might come from not wanting to get caught unprepared for the next leg down in the economy. If you combine anemic private sector job creation with a low-growth to no-growth economy, you can see why there is a lot of fear, uncertainty and doubt in the C-suite. A long term declining economy will create the impetus to re-organize IT around a new model. And the only “new” IT model that comes to mind is the cloud computing services model.
For the past several decades IT has led a charmed existence. Each new technology wave, from client-server computing, to the introduction of the World Wide Web and e-commerce, to data center virtualization has increased IT budgets and staffing levels. However, the growth in traditional data centers cannot be sustained as the economy continues its decline. Both the Federal Government and corporations, like Hewlett-Packard, have implemented projects to reduce their number of data centers and applications. However, the fact remains that data centers and the thousands of applications running in them requires significant IT budgets and staffing levels that are going to be unsustainable.
In the case of the Federal Government, CIO Mr. Vivek Kundra, is “all in” when it comes to using the cloud to provide IT services. Under Mr. Kundra's leadership the Federal Government is pushing for wide spread use of cloud computing to improve application services and reduce costs. CIOs running enterprise data centers with substantial capital investments in facilities and equipment are thinking about turning their virtualized infrastructure into hybrid (private-public) cloud computing centers. Small and medium size businesses are looking at deploying SaaS applications to replace their on-premises servers and software. Business start-ups are using cloud computing services from the get-go to avoid the capital cost of premises-based IT services.
It seems pretty clear that the emerging IT model will be based on cloud computing and it will diverge sharply from what exists today. Organizations that develop their own applications will move all development and testing to the cloud. PaaS providers like Microsoft (Windows Azure), Google (AppEngine) and Salesforce.com (Force.com) are ready to supply cloud application development services. Organizations not interested in running premises-based applications will find a plethora of SaaS providers who can provision them with cloud-based applications on a self-service basis. Everything from office application suites and accounting to human resource management and ERP can be done in the cloud. Organizations wanting to move their servers and applications out of their computer rooms and into the cloud, will turn to IaaS providers like Amazon (EC2) and RackSpace Cloud to make the big switch.
IT employment will be reduced. The personnel needed for operations, maintenance and provisioning of premises servers and applications will decline as servers and application workloads are shifted to the cloud where workload automation and user self-provisioning will be the order of the day. RightScale has already launched over one million servers in the Amazon and RackSpace public clouds. Novell is preparing to release their Cloud Manager platform later this year. Novell Cloud Manager will initially work with just private cloud infrastructures, but soon there after it will manage public cloud infrastructures as well.
Application development using PaaS will shorten development cycles by taking advantage of “ecosystems” being built around various PaaS providers. For example, Salesforce.com users can leverage the Force.com platform to quickly create applications. This could mean fewer developers on the payroll combined with the use of contract developers skilled in certain PaaS environments. Microsoft is betting big on moving a substantial number of their independent software developers to Windows Azure and .NET in the cloud.
Changing the IT model to “be the cloud” will align IT with the business processes and objectives of the organization. IT will “disappear” into the organization as the cloud becomes the new IT landscape. Less time will be spent on the “nuts and bolts” of IT and more time will be devoted to helping the organization execute and succeed on its business initiatives.
Cloud computing is the new model for IT in the 21st century. A declining economy with low or no growth is going to force changes not seen in the living memory of most IT practitioners. So keep your seat belts fastened for the next 5 or 6 years as IT goes through a lot of cloud turbulence.
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