Cloud: threat or opportunity for the IT department?

Simon Wardley in his fascinating series of blog entries on innovation and the enterprise (http://blog.gardeviance.org) points out that technologies tend to follow an innovation lifecycle, from early innovation, to custom-built solutions, then products and finally (if the technology is widely taken up) to commodity. What we call ‘Cloud’ today is, he contends, really just the transition from IT delivered as products to IT delivered as commodity service.

In many ways this transition mirrors the previous transition in IT, from custom-built (mainframes) to (off-the-shelf) products. In that case vendors identified a huge pent-up demand from line of business individuals and departments who were frustrated by the inability of their IT department to satisfy their computing needs. Consequently vendors produced hardware and software products intended to deliver business benefits direct to line of business, and in doing so bypassed IT. Although the uptake of those products delivered significant competitive advantage to organisations which successfully exploited this new paradigm, it also resulted in IT anarchy with hardware and applications scattered all over the organisation, and data stored in many locations and in incompatible formats. It’s taken the IT department most of the last two decades to regain control. And now, just when almost all of the IT has been consolidated into the datacentre, along comes this new disruptive transition.

Today’s IT users don’t turn to the IT department when they want a new IT service – they turn to Google. They search for a service (frequently freeware) that’s ‘good enough’ and just start using it. If they want conferencing they turn to Skype, for a marketing campaign they’ll use Facebook and Twitter, project managers will utilise 37Signals, sales people will use Salesforce, and for shared storage they’ll use Dropbox. Don’t believe it? – well, ask your Generation Y colleagues, 34% of whom admit to accessing unsanctioned services in order to get their job done (http://itknowledgeexchange.techtarget.com/cio/living-with-the-toys-of-generation-y-in-the-workplace/).

So what can IT do? Well, given the parallels it should be possible to avoid some of the mistakes from the last transition. Firstly, IT needs to be aware that this shift is occurring and to prepare for the impact. The IT department needs to start focusing on the services being consumed and understand how they can be managed. They need to avoid Ludditism. Coming up with a long list of ‘why nots’ (security, privacy, availability, legal issues etc) is an irrelevance if services are already being consumed without approval. A strong argument in favour of the IT department is that they can ensure service consumption conforms to organisational policy, but doing so requires IT to embrace the transition rather than resisting it. People won’t ask permission (or assistance) from IT if the answer will always be ‘no’.

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