CIOs Consider Skipping Private Cloud

Is cloud just a way to outsource low-risk, low-return business processes to save money, or a potentially revolutionary new way of working?

That's the kind of question one might expect of a hard-core cloud convert or cloud services provider. But according to Mark Tonsetic, practice manager in the IT practice at CEB, a member-based global advisory organization, it's a question that blue chip CIOs are beginning to ask.

And what they are beginning to decide, he claimed, seems pretty radical. "Cloud often presents itself as not that much of a different way of working than on premises," he said. "If it is a change at all, that's often presented as just a change in the technology, which is often seen as at a lower altitude than business process."

But for at least some of the user organizations he's talked to, the idea is to turn all that on its head: Why not use cloud, in close partnership with appropriate service providers, to look at cloud as a way to do genuinely new things -- or in Tonsetic's words, "change their business capability."

What's perhaps even more radical: Some of these CIOs may not do what is seen as the "sensible" thing of building out a private cloud infrastructure, but decide to hold off and wait until public cloud matures just a bit more.

Tonsetic offers CRM as an example of the kind of discussion he's hearing on the topic. "Yes, you could do CRM as a hosted app, where you don't really change that much at all. But if you start using CRM as a service, then you are empowered by that move to start asking questions about what information about customers is really desirable and worth capturing. For a minority of CIOs, this is the kind of change they are starting to look to cloud to apply to more and more business processes to derive greater capability."

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Tonsetic told Information Week that his analysis is based on a recent poll CEB performed among 45 of its CIO members about what factors are shaping their cloud strategies and follow-on interviews with a number of them.

In terms of that study, he said, there are clearly reservations about the standard cloud worries CIOs seem to typically report, such as fears over security, data privacy and avoiding potential lock-in with a vendor.

But, in a finding he said surprised him, CIOs are also now saying they are prepared to "filter out" the vendors whose positions on these problems they feel are simply not convincing -- and have a much greater interest in working with the remaining suppliers to "try and jointly resolve" these challenges.

Tonsetic say these cloud "readiness flaws" can thus be sidelined in favor of the more long-term thinking he said is starting to emerge. Meanwhile, emerging pragmatism around private cloud is also shaping thinking, he claimed. "In 2012, we found that members were expecting that by 2014, 25% of their data would be a private cloud basis and only 15% in public ones, 14% in traditional outsourcing arrangements and so on. But now -- and again, yes, it's a minority -- some wonder if that's going to be too complex to manage, and whether it might not be better to skip a couple of years of private cloud work and simply do more on public cloud in 2015 instead."

Tonsetic said that it's going to be interesting to see if 2015 really will be what commentators see as a year of active hybrid private-public cloud development, or whether the enterprise will go in a completely new direction altogether.

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