If you’re just thinking about cloud it’s already too late

Many of us today are thinking about the cloud and what it might mean to the future.  Yet as we’ve pondered cloud technology, it has gone from an intriguing concept to an absolute inevitability.  In fact, it has gotten to the point that if by 2020, an IT leader is not an expert in leveraging the cloud, that person may not have a job. 

When we step back and take a look at the past decade, it has been an avalanche in terms of how the IT landscape has changed.  Even though the iPad has seemingly been around forever, it only debuted as a viable business platform in 2010.  Amazon Web Services (AWS) wasn’t a fully capable cloud services company before 2013, and Microsoft’s Azure didn’t take off until a year later (remember BPOS?).

There is big change to the driver behind the rapid technology changes we’ve seen so recently.  In the 1990s and 2000s, the stampede towards new technology was based largely on the potential that it offered.  Web services were important because ecommerce promised a much faster, more personal relationship with customers.  Smartphones and mobility software were in high demand because the concept of moving business from the office into the field was so intriguing.  Yet it was this same drive towards tech that created the concept that IT was a literal “black hole” that could eat as much money as you could throw at it and still return nothing of value. 

Enter the CFO

The most basic rule of power in any organized body of people is best described by the (modern) Golden Rule: “Whoever holds the purse strings will eventually call the shots.”  

As cloud providers began to really stabilize operations, a powerful business proposition emerged.  Instead of spending millions of dollars on powerful servers and storage arrays, companies could now rent the experience of them without actually buying the physical infrastructure.  When business leaders determined that they could essentially “get the milk without buying the cow,” ancillary investments in data center facilities also declined rapidly.  In the real world, why would you need to build that eight-million-dollar facility when all the equipment it would house had been virtualized? 

A CFO may not be trained as a technologist, but you can rest assured that she understands financial concepts.  With Amazon and its competitors offering viable IT infrastructure and resources for 70 percent less total cost of ownership than the traditional on premise approach, IT leaders have been put on notice.  Move, sensibly and quickly, to the cloud or we’ll find someone or something to replace you.  The “thing” in this case usual means a third party integrator. 

Is it really too late?

If you’re an IT leader who hasn’t been quite able to fully embrace the cloud, are you truly in jeopardy?  The answer, of course, depends on how your value is perceived by the peer leadership of your organization.  A great relationship with the CEO is always a valuable commodity, but that will only buy you so much time.  If you don’t feel the urgency, consider some anecdotes that will evolve into fact as the decade closes out. 

1. Application development and maintenance work is now completely commoditized.  If you are investing heavily in internal talent to manage your application portfolio, a specialist firm from the outside can do it for half the cost (and still turn a profit).

2. Every significant software vendor is completely abandoning the sale of licenses in favor of a subscription model.  If you haven’t noticed this trend, check the five-year roadmap of the vendors in your portfolio.  Do you need internal staff to manage subscriptions in the same way that you used to manage physical software and licenses?

3. The lines between business and consumer computing devices have blurred.  People are now using the same equipment for all aspects of their lives.  This is the end of the era of personal computers (PCs).  What happens to your desktop technician staff?

4. Spending on information security to protect assets and data moving to the cloud is THE story of the decade.  As Steve Morgan of Forbes states, information security spend in 2015 was $75 Billion.But that’s “chump change” compared to 2020 when it will be almost $200 Billion.

5. Software vendors, just like the NFL, will be forced to sell products “on demand”.  These companies have attempted to halfheartedly embrace the subscription model by simply changing 3-5 year contracts for 3-5 year subscriptions.  However, consumers will force them to drop the temporal commitments. 

If you’re an IT leader not already well on your way to fully embracing the cloud, you know that the clock is already ticking.  Being an IT leader as we move into the next decade will not be for the faint of heart.