At several events in which I've been involved with more than 40 CIOs over the past few months, the most-talked about subject was cloud computing and the second-place topic was miles behind. Vendors of every stripe—from IBM and HP to Microsoft and Oracle to Riverbed and Informatica to Wipro and Capgemini and many many more—have developed full-blown strategies for building out cloud infrastructures, services, platforms, strategies, integration, and products.
CIOs are eager—extremely eager—to see if the potential of the cloud can be transformed into tangible business value that will help them deal with three extremely pressing issues:
*Moving Faster: Every organization these days is looking to accelerate its pace of business to be able to respond to shifting market demands and opportunities as they occur, not 6-9 months later. And with IT now essential to every facet of those organizations' operations, it's no longer acceptable to be told that major company initiatives will be bogged down for months because that's how long IT needs to spec out, purchase, test, set up, and provision new systems. Cloud deployments breed speed.
*Lower The Cost Of Infrastructure: With CIOs' companies are demanding more and better IT services and performance, the available budgets for those CIOs are barely above the viciously scaled-back levels of 2009. So CIOs are hoping a thoughtful cloud strategy will let them bridge the yawning gap between expectations/demands and limited funding.
*Flipping the 80/20 ratio: Many CIOs say they are still spending upwards of 70% or 80% of their IT budgets on maintenance versus innovation, or on run versus build. As a result, very little money is left in the IT budget to fund new and vital customer-facing projects because it all gets sucked up in keeping the lights on. In turn, this funding trap is causing many CEOs to want to shoot themselves, shoot their CIOs, or outsource all IT operations. Regardless of which of those choices is made, the status quo is unsustainable and CIOs are looking to the cloud as the, uh, magic bullet that they can aim at reversing the 80/20 ratio rather than at themselves or their CIO.
Also, I haven't (yet) gotten so trite as to say that 2010 will be The Year of the Cloud, but if someone were to ask me what 2010 will be the year of, I would say 2010 will be The Year of the Cloud. (And don't be troubled by the fact that IBM CEO Sam Palmisano, HP CEO Mark Hurd, and Oracle CEO Larry Ellison have all told us they don't like the name "cloud computing"—after all, you wonderful folks in the Global CIO audience have come up with more than 500 new names to replace cloud computing—you can check out that list and other related content in the "Recommended Reading" list at the bottom of this column.)
No, the irony is that all the wonderful stuff I've described above—all the heartwarming, money-saving, speed-feeding, business-model-flipping miracles—also serves as the most mortal threat to cloud computing: we have met the enemy, and it is hype. The larger question that needs to be answered is this: behind the hype, is the potential real or is it just some empty promise conceived out of desperation?
To answer that, I turned to my colleague and friend Art Wittmann, who's the creator of and mastermind behind InformationWeek Analytics, our research and premium-content business. Art has forgotten more about IT strategy than I will ever know and while he's not quite as ancient as I am, he's lived through plenty of hype-cycles and is concerned that we are feeding another one by overpromising what the cloud is and what it can deliver.
This came through loud and clear in an e-mail exchange Art and I had earlier this week, and I wanted to share with you some of his thoughtful concerns: