Innovation, Not Cost, New Cloud Battle Cry - InformationWeek
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10/28/2009
03:08 PM
Michael Hickins
Michael Hickins
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Innovation, Not Cost, New Cloud Battle Cry

Maybe folks are simply trying to talk themselves out of the recession (which would be a good thing in itself), but it seems like the conversation around cloud computing is shifting from cost-cutting to unleashing innovation.

Maybe folks are simply trying to talk themselves out of the recession (which would be a good thing in itself), but it seems like the conversation around cloud computing is shifting from cost-cutting to unleashing innovation.It seemed pretty natural over the past couple of difficult years to hear both vendors and their customers in enterprise IT talk about cloud computing as a way of essentially outsourcing IT management and shifting the burden of capex from the enterprise to the application and hardware vendors.

But cloud computing wouldn't be the breakthrough it's cracked up to be if that's all there is to it.

I had the chance to watch Zach Nelson, CEO of cloud enterprise resource planning vendor NetSuite, give a presentation yesterday at the New York Stock Exchange, where he rang the closing bell. The thing that most stuck with me was his idea that if all companies do is run the same systems in the cloud as they have in their data centers without changing their business processes, they're simply going to be dealing with "a cloud-based hairball instead of an on-premise hairball."

Coughing up the hairball by using different (and theoretically better) business processes isn't just about cost-cutting. Changing business processes also means relieving IT departments of mundane administrative tasks like patch management and version upgrades, and allowing them to create new applications that can actually give companies a leg up on their competitors.

Gartner analyst Jeff Woods, who was also at the event, noted that while it's cheaper to run IT in the cloud, the value of simply automating business processes is decreasing. "You have to change your view of what IT does from business automation to how to unlock innovation," he said.

Not only can IT now focus on aligning better with business goals, but line-of-business managers can have more visibility into the data. Nestor Zwyhun, chief technology officer at TradeCard, a supply chain company that uses NetSuite ERP, said "we've gone from IT managing the data and owning it to the departments owning the data."

That means being responsible for the quality of the data, rather than blaming IT if the data isn't good.

There's also a lot less talk these days about IT departments throwing up roadblocks to the cloud. Now, most IT folks are just concerned about making sure cloud implementations make sense from security and compliance standpoints.

One of the problems working most places, in any capacity, is that it can be very difficult to ensure that what you're doing is valuable to the company. The farther you are from actually selling stuff (like keeping servers running or writing stories about IT), the more abstract the relationship between your responsibilities and the company's ultimate goals.

When that abstraction gets too big, you generally end up in the next wave of "restructuring." IT folks who have in the past resisted cloud computing because it represented a threat should see it as an opportunity to narrow the gap between their jobs and how their companies generate revenues, by freeing up enough time and energy to let them figure out what internal customers need to succeed at their jobs, and then giving it to them.

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