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 percent or 80 percent 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".)
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:
Who's Really Doing It?
"It could be that cloud computing is the biggest thing since the
internet, but remember that the internet took 20 years to become a
big thing," Art wrote. "What makes a successful market for a
vendor—the ones beating the cloud drum so hard right
now—is no more than a few percentage-points shift in IT
spending. If IT changes its spending patterns at 3 percent a year,
the vendors will consider it wildly successful and in 20 years,
you'll have phenomenon like Internet.
"I've repeatedly asked Charlie [our superb cloud-covering colleague
Charlie Babcock] if he knows of any major companies who are using
cloud services other than SaaS in a strategic way (meaning anything
other than toe-dipping) and he can't really point me to anyone. So
far, non-SaaS cloud services (IaaS, PaaS) are largely for other
developers—period," Art wrote.
I see Art's point and agree that cloud computing is in its infancy,
but where I disagree is with his 20-year horizon and with his
steady-state theory—his assumption that right now in 2010 is
just like 2007 is just like 2002 is just like 1996 and so forth.
No, what we are facing here in 2010 with a global recession is a
set of business challenges unlike anything I've seen in the past 30
years: uncertain credit, uneasy financial systems, jittery
investors trying to divine if the stock market has any connection
any more to the real world, and unprecedented government
involvement in the private sector in every area from regulation to
oversight to direct ownership.
As a result, I think the time-horizon most CIOs are looking at is
20 months rather than 20 years—there exists right now an
incredible urgency to address and overcome the internal IT
shortcomings that until recently have been shrugged off as just,
well, insurmountable laws of physics. And cloud computing—or
at least the promise and potential of cloud computing—just
might change all that.
But let's go back to Art and his perspectives on whether that
promise and potential have any chance of bearing fruit:
"Sure we need to cover this stuff, but I do worry that we're
overdoing it. As it stands right now, you have crazy things going
on like boards of directors asking 'what are you doing about cloud
computing' to hapless CIOs and CEOs who SHOULD be doing nothing but
watching and learning. But because it's being hyped by us, Barrons
[in a recent cover story] and everyone else in the press who's
buying into the vendor hype machine, readers are being forced to
scramble for a proactive strategy much sooner than they should. I
hate to use a Gartnerism, but we are so high on the hype curve it's
nothing short of ridiculous. The trough of disillusionment is right
around the corner . . . so let's temper the exuberance just a
tad."
Again, Art offers a compelling and sobering assessment, as he
always does. But also again, what is different here is the
extraordinary urgency those "hapless CIOs and CEOs" face in getting
their overall operations on track to perform at unprecedented
levels of speed, global scale, flexibility, precision, customer
engagement, and financial clarity. The status quo that Art would
have those executives cling to for at least a while longer is
simply not up to the task—and in these demanding days, the
alternative isn't just devoting a couple more years and another
pile of cash to finding new solution; rather, in this highly
demanding and unforgiving global marketplace, t's oblivion.
That's why the urgency on the part of CIOs to see if cloud
computing is real. That's why the urgency to test and tinker and
experiment, rather than "doing nothing but watching and learning."
And that's why, while it may be true that cloud computing's biggest
vulnerability is hype, CIOs' biggest vulnerability is doing
nothing—that is simply not an option.
So let close with some final and extremely valuable closing remarks
from Art, along with the promise that across all of
InformationWeek—from our Analytics research business to here
at Global CIO to our well-grounded Plug Into The Cloud site to our
core news coverage—you can be sure that you'll be getting
cloud-computing coverage that reveals the failures as well as the
successes, discusses the problems as well as the opportunities, and
separates the hype from the reality.
In short, we promise that as we help you wrap your brains around
the cloud, we won't get our heads lost in the clouds.