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How will the cloud change the IT landscape?

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A question on many people's minds, how do you think the cloud will change the IT landscape?

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  • Although the 'Cloud' enables business end-users to unilaterally acquire computing power and software solutions without IT involvement, they will increasingly seek IT's help in evaluating the technical capabilities and vulnerabilities of these Cloud services as they rely on them for more mission-critical purposes. It will become IT's job to determine how these services fit into their legacy operations and in which situations they can replace their existing systems and software. IT will facilitate the technical evaluation and vendor management processes to ensure the reliability, security and performance of the Cloud service providers. IT should also become adept at leveraging various Cloud resources to build unique solutions to support the business objectives of their organizations.

  • The IT landscape will deal a lot more with private clouds and packaging software and services up on these private clouds. Vendors will be asked to deliver solutions via the private cloud wherever possible.

    The current trend for private clouds illustrates what I have thought for a while now, that cloud computing will be leveraged by businesses more and more in a "private" cloud scenario....This means the IT landscape will change and move away from "onsite admin / implementations" to "private cloud based admin / implementations" more and more...Though I dont see this being the only way IT will be delivered...

  • Many years ago I developed and published the CBDI SOA maturity model and roadmap methodology, that over the years has been widely used by larger enterprises as well as cloned and copied.

    Those familiar with the model will recall that it diverges with de facto maturity states from the usual suspects by using service usage patterns to characterize relative maturity. And some may recall that the mature state is referred to as the Ecosystem, which “follows? the Enterprise state.

    Today the cloud is in a relatively immature state. But at some point the cloud and SOA maturity models will converge and at that point we should fully expect ecosystem like behaviors including commoditization and the concomitant price and cost reduction, standardization of higher order levels of functionality and massive reduction in cost of integration and deployment. At this point the changes to the IT landscape will be profound. The massive swing to specialized service providers that has happened may well be significantly reversed as mobile enterprise, functional standardization and improved economics become normal. As usual profound market shifts of this nature will cause rationalization of market players – and in the case of cloud it’s by no means certain that big will be beautiful – because the nature of the cloud can actually favour small players.

    It’s not too far fetched to imagine cloud based innovation driving macro economics, in the same way that in the past players such as Microsoft, IBM and Apple to name just a few have had deep impact way beyond the conventional market space.

  • It'll shade everything a bit. By this I mean, cloud will become a common delivery paradigm for IT to provide constituents with on-demand flexibility and capacity.

    Within 3 years, most significant enterprises will support several of their key IT processes with a mixture of private and public cloud infrastructure. We happen to think that software development and testing is one of the first processes that will move to cloud. Of course, there will always be some "wires hanging out" connected to those big immovable systems that will never float.

    Concerns like "Is the Cloud secure? Can it perform?" will revert to "Is my software secure? Can it perform?" Good architecture and design practices will still be critical, wherever the software is developed, tested and deployed.

  • Now, this is a good question and timely too as I'm just starting to comment on my ideas about the impact of convergence in IT. The cloud is really driving convergence for the first time since the convergence of telephony and IP networking. The need for scalability in the cloud is driving convergence of storage, networking, virtualization, security and access management. This convergence drives simplification in deployment and operations, but changes the landscape from a skills perspective. The result of this is fewer individuals are needed, but they must have a greater comprehension of more components and how they operate as an integrated unit.

    While it's easy to look at the cloud as an outsourced resource and the impact of that on the IT landscape, it's relatively sophomoric outlook. If you consider what has occurred since the convergence of telephony and IP networking with delivery of unified communications services to the household, the convergence being driven by the needs of the cloud has the potential to surpass that 10-fold.

  • The problem is that we in the analyst/vendor/media business portray new developments as if they already happened. Very, very few organizations have moved their key apps to the cloud, unless their whole business is cloud-friendly, like data aggregators, web analytics, etc.

    People in organizations, all people, not just IT, resist change. IT is constantly looking for ways to reduce THEIR risk and the cloud is largely a big unknown to them so far. They may recommend SaaS apps to replace some legacy functionality, but for the most part, they are going to wait and see how it all plays out.

    We are all guilty of highlighting the move to the cloud of some marquee players, but the vast majority of organizations will stick to SaaS and POC for now, if at all..

    Frankly, most of the vendors have made headlines with their cloud announcements, but when examined, there is no there there, so they are putting their thumbprint down but have not really crafted anything yet.

    In my patch, analytics, I really question the economics of the cloud infrastructure because 1) provisioning servers only when need them (CPU by-the-sip) doesn't work when you run 24/7 and the cost advantage when using dedicated servers instead drops precipitously and 2) why move terabytes of data to the cloud when you already have it in-house from in-house systems?

    Over the long term, IT will cozy up to the cloud. It's just infrastructure to them. After all, IT people don't work in the server room, so what does it matter if the servers are somewhere else. That isn't the issue, it's moving from the known to the unknown when their butts are on the line. They don't like that.

    One more thing to consider: 70% of IT budgets go to maintenance. If the cloud can't put a big dent n that, it will falter.

    -NR

  • One would hope that the primary benefit for IT (aside from all the technological change that it brings) is an opportunity to re-evaluate their operational processes. Not just from a technical "checklist" standpoint but also from a "what's the lifecycle of an application"? How does it "enter" IT and how does it ultimately "exit"? In the meantime, how do we streamline the resource provisioning process such that we can incorporate elements of self-service for business stakeholders *where it makes sense* and where can we eliminate wasteful or repetitious steps in our processes that make the overall interaction with IT for our customers - whoever they may be - less painful and more productive.

    That's the real change that should come from cloud - whether it's on or off premise: the opportunity to transform what has become inefficient and an obstacle to supporting the business.

    Lori

  • Agree with Andrew that we'll see a move from "onsite admin / implementations" to "private cloud based admin / implementations". In fact the US Federal Government is going to adopt a policy to prioritize cloud solutions over on-premise solutions.
    http://rww.to/hS4GwL

    The whole self-service piece is key. Check out this video on the changing role of a system admin:
    http://bit.ly/aCak1u


  • Great question Peter.

    The disruptive price points and deployment speeds are at the center of the change. Enterprise IT has traditionally been a big gambler when it comes to solution deployments that are often complicated, costly and time consuming. IT has to gamble that the results that often come 12 - 24 months later are what the company will need at that time, based on project requirements that reflect what the company needs now. This gap puts incredible pressure on IT to deliver miracles. Cloud solutions can be deployed quickly and at a much lower cost – nearly eliminating the gamble. The business can strategically deploy solutions that address specific needs, evaluate results almost immediately and avoid boiling the ocean. This empowers IT to focus on solving business challenges and driving positive results.

  • Cloud is driving a change in the nature of enterprise IT departments, which will result in the elimination of the majority of the middle office – project management and governance – a slightly increased number of small projects staffed with free agents, and will see the IT planning function fragmenting and largely moving into the business with only a small group of business-technology consultants left in IT.

    In terms of skills, the old scary big-project delivery people are rapidly becoming redundant, while the planning and innovation, and small dynamic teams are becoming more important. The IT department we have today is not the IT department we’ll need tomorrow.

  • After an initial scare, IT seems to regain its measure of relevance at the start of the cloud hype. But these will be transitory at best. More and more, its role will be less about internal resources and more of provisioning of services - whether from within internal or external sources. That said, enterprise IT will need to surpass or at least mirror the service that cloud computing supposedly enables and provides. IT will need to be more responsive than ever given that the options abound elsewhere and the temptation for developers and users to bypass traditional IT silos will increasingly be the norm.

  • The Cloud would move IT back in the data centers.

  • As it often happens, I buy Neil Raden's vision.

    I'd add that the relevant biz market will remain, at least for the next decade, ERP centric. ERPs, in the vast majority, are the piece of sw that make the company run. If it is, the same as for analytics apply: the cost of heavily used servers drop. So, what's the point in pushing the ERP in the cloud?
    The cloud might will surely be an interesting platform for many applications, but I might believe it is going to be a true revolution only when I'll see a full featured, cloud based SAP or AX.

  • I think David Sprott has this right - the cloud is really all about the ability to source specialised business services externally with price and capability greatly superior to what can be delivered internally (and through doing this increase our own specialisation, innovation and adaptability). As a result cloud will drive the enterprise to disaggregate and reform as a vehicle for value web coordination rather than a vehicle to organise resources internally to limit transaction costs.

    In both driving and supporting that transition to 'virtual enterprises' I believe that the IT industry will simplistically reform around economic value:

    - "Service Delivery Platforms" will become a new shared utility focused on the rapid realisation of business services. They will effectively absorb and commoditise a broad range of technologies, methods and business enablement services to focus on helping people realise business capabilities quickly and cheaply.

    - "Service Marketplaces" will emerge focused on helping to broker connections amongst specific groups and thereby optimise their overall value web in a business to business context. I think we will see a growth in much more specific and curated marketplaces tailored to the needs of industries as well as generic ones that form a kind of general 'bazaar' within platforms

    - "Enterprise Integrators" will be the new business consulting and systems integration companies but their focus will shift to supporting client value web optimisation through strategy and business architecture (e.g. improvement of 'owned' business capabilities and the selection and integration of world class partners for non-core concerns) rather than IT

    - "Service Providers" - Existing ISVs, business process outsourcers and enterprises themselves will all use this new ecosystem to become specialised service providers, redeveloping and delivering their business capabilities to a global market in readiness for integration into the wider value webs of partners.

    During this shift IT ceases to be a separate 'thing' and instead becomes interwoven into the fabric of the economy.

    In terms of the internal IT department - it ceases to exist in its current form; operational infrastructure is ceded to cloud platforms, line of business IT systems become irrelevant - along with the people who use them - and are replaced by outsourced business capabilities (or are redeveloped on cloud platforms to support the scale, cost and multi-tenancy required to operate in the new ecosystem). Finally the remainder of 'IT' staff either go into a strategic portfolio management role with the business leadership (at the enterprise level and focused on value web optimisation) or get fully integrated into the remaining internal business capabilities to support their individual optimisation using agile development processes.

    Eventually ;-)

    Ian

  • Right now, I'm setting up Openbravo ERP production instance for my company on Amazon EC2. I have development instances and QA instances on my local PC, but decided to go with Cloud computing for the production env.
    For a small business like myself, it's quite handy. While I'm traveling, meeting with people, sleeping, taking vacations, etc., I don't have to worry about my business information. Even if my PCs get stolen while I'm taking a vacation, business damage is minimum. Buy a new PC and come back to my production ERP instance, as long as I remember passwords. ;-)

    Have I faced any challenges? Yes, sure. To get used to Amazon EC2, created and deleted a few instances and a few EBS volumes. I should have spent a few USD, or 10 USD maximum. It's a good price for a lesson.

    Security seems reasonable. Only specific IP addresses can access to my instance with my security setup. My accountant also has a secure access to it from her home office.

    When I need consulting services, I prefer remote consulting. I allow such people to access my instance from predetermined IP addresses for a certain period of time. I need contents of their brains, not their physical existence. We can meet via AdobeConnect or whatever, in Web based meetings.

    After reading this, do you think that IT landscape for small businesses have changed? Or not?

    For larger businesses, they have much bigger people, political and sentimental/mental inertia, meaning that, to cause tangible changes you need more forces and time. And as you also know, any actions cause reactions.

  • To pick up on a couple of comments:

    If cloud is only about infrastructure it won't fly - economically or technically. But surely we are already past that, not in terms of critical mass, but surely in terms of proof of concept - I note examples of BPaaS which is very exciting.

    Standardization and commoditization of business services will (hopefully) break the hegemony exerted by the ERP and managed services vendors.

    We are still in the stage of maximum hype. Think SOA - it took 12 years to get here, and we are far from done. Cloud has similar architectural impacts and it will take time. We are on a journey to a virtual, distributed, component based environment. Lots more to do.

    . . . David

  • As a further follow on to David's thoughts about ERP - I looked at the suitability of such legacy packages for the future business ecosystem a few years ago if anyone is interested!

    http://itblagger.wordpress.com/2007/05/04/does-erp-suck/

    Thanks again!

    Ian

  • Interesting thoughts Ian. My thinking has long (20 years) been componentization of somewhat coarser grained units of integrity. Today many of our customers are focusing on Capability Services as the foundation of their service architecture. In CBDI-SAE Capability Services are generally Functions that encapsulate business process, data and information, and are cross cutting in business terms. This allows them to form an optimum Integrity Unit that has integrity of semantics, security etc etc. Ubiquitous Cloud based Capability Services is my medium/long term vision, or to put it another way, the mature state of the Cloud Roadmap.

    David

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