How Cloud Enables Innovation

Cloud may help cut costs, but perhaps its biggest benefit is that it frees IT operations to pursue new projects and initiatives.

Last fall, for an article on balancing IT maintenance and innovation, I asked several CIOs what percentage of their resources were spent on “keep-the-lights-on” endeavors such as maintaining existing hardware and software, and how much on new innovation. Most reported they were spending at least half their resources on keeping the lights on, in many cases much more than half. None of them were happy about it.

More formal research confirms my snapshot view. In a recent survey of 100 CIOs, 48 percent complained that their operations spent more than half its time and resources on maintenance projects, and that doing so hampered their ability to pursue innovations that the business wanted or needed.

When I did my interviews, though, there were a couple of CIOs who told me they were spending only 20 to 40 percent of their resources on maintenance, with the rest going for innovation. The difference, in every case, was that they relied heavily on the cloud. 

It’s easy to understand why cloud makes the difference. It can vastly reduce needed hardware maintenance which becomes the cloud provider’s headache rather than the customer’s. Depending on the configuration used, it might remove the hassle of maintaining an operating system and software as well. 

Interestingly, even a company with a completely private cloud was still able to shift a large portion of resources away from maintenance. They did it by leveraging their virtualized environment, standardizing wherever they could, and using the cloud’s ability to move work from one server to another, making their maintenance work much easier and almost eliminating planned down time. This freed up so much time for innovation that the company’s IT department pilots technology that it finds promising, such as virtualized desktops, before the business even asks for them.

Cloud rationale has shifted

Businesses are catching on. In TechTarget’s fall survey of 830 IT leaders, 45 percent said their reason for adopting the cloud was not about saving money but about responding to business need. That’s quite a change from two years ago, when in the same survey 73 percent of respondents cited cost reduction as their reason for using the cloud.

What this means is that CIOs and other C-suite executives need to rethink their calculations when looking at cloud adoption. Today, too many still think of the cloud as primarily a way to cut costs and gain flexibility for IT resources. Balanced against those benefits was a perception of increased risk: Risk of data being breached, data being lost, services becoming unavailable, and risk of being held hostage by a cloud provider who now has dominion over the customer’s technology. 

That landscape is changing. In today’s world, a company that avoids using the cloud may not actually be reducing risk at all.The risks associated with not using the cloud have changed dramatically. It’s no longer just a matter of higher costs and reduced IT flexibility. Companies that avoid the cloud will pay a price in their reduced capacity to innovate, or respond quickly to changing business conditions. They may miss an opportunity to improve market share. In years to come, as nimbler competitors leverage the cloud to continually improve their offerings, operations, and analytics, they risk being left far behind. 

Are the benefits of keeping data on-premises worth those risks? That’s a question every company will have to answer on its own.

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