Posted by: MelanieYarbrough
Cloud computing, Cloud Computing in 2010, Outsourcing, SaaS
James Urquhart, Market Strategist for Cloud Computing and Data Center Virtualization at Cisco, was recently traveling in Australia. What struck him the most, he said, was how they were equating cloud computing with outsourcing. “They’re not the same thing,” he assured me. “Though they do have a loose relationship with one another. They have the same concerns: service levels, security, liability, legal concerns and all that. They’re still there.”
So, what can cloud computing offer the enterprise?
There are the obvious financial appeals, or what Urquhart referred to as the ability squeeze costs. But that just gets the customer on the lot, the “extreme agility” that cloud computing offers is the great gas mileage. Citing one of his favorite quotes from a CIO, “We came for the cost savings, but stayed for the agility.” Urquhart stressed that CIOs aren’t just looking for a way to cut costs, they’re interested in innovation.
The concerns surrounding traditional IT are interwoven. Complaints that IT has become a “cost center” is partly attributed to IT becoming a buy-over-build arena where “80 percent to 90 percent of IT and telecom budgets are spent with outside vendors.” Innovation in the traditional IT model is too risky, too costly.
Urquhart puts it this way: In the traditional IT model, a lot of new projects get the boot because of the risk factors. The traditional IT cash flow model has changed, thanks in large part to SaaS and the cloud. Whereas before there was a big spend and outpouring of budget followed by an effort to minimize depreciation, the cloud offers a pay-as-you-use model that’s more appealing. IT budgets can be spread out, allowing CIOs to dip their toes experimentally without fear of losing millions of dollars.
The pressure to “plan for success” has been loosened a bit; the cloud has created some wiggle room for trial and error, where innovation and exploration are feasible possibilities rather than pipe dream luxuries. In the end, companies are willing to pay more for the cloud and agility, said Urquhart. Though altogether the bill may add up to more, the appeal of spending more slowly and with an elastic commitment often wins out.
The appeal or the downfall of cloud?
Is this noncommittal, curious attitude toward cloud risky in itself? Are CIOs really willing to give up the option of customization? Cloud may force enterprise introspection, picking out which applications are unnecessarily customized at what cost, and stripping down to the bare bones. If a standard offering were available, enterprises could get what they needed without the temptation of over-customization and over-allocating their budget.
What’s next for IT professionals?
When asked about how IT professionals should approach the changing market, Urquhart was optimistic. IT has long been viewed as a drag rather than an innovation center, he said, so maybe these changes and “threats” to traditional IT are a chance to reinvent your career and career path along with the whole infrastructure.
“The nature of operations is changing,” says Urquhart. “We’re transitioning from server-centered operations to more application-centered.” Whereas previously you’d buy a server, install an OS, give it an IP address, then install the application, these days your deployment is the application, he said. This creates an opportunity for new cocktails of skills to remain competitive in the changing market. The old: Network/storage skills. The new: Service-level skills based around applications, middleware, and the data center. He stressed the importance of beginning to “understand what it means to manage from the perspective of the application,” focusing your skills and knowledge on the application rather than everything else.