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Will the cloud at some point allow smaller companies to do away with their IT department?

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As the cloud continues to gather steam, do you think the cloud at some point will allow smaller companies to do away with their IT department?

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  • Do away with, no, scale back, yes. Smaller companies would most likely still need a person or two to analyze what applications need to be leveraged in the cloud, and manage the external relationships.

  • Small companies definitely. They are unable to run IT cheaper than public cloud service providers. The whole question is where is the treshhold? From what point onwards do companies have the size, skills and resources to create a private cloud that has costs and efficiencies similar to the public ones. I'm not sure I have an answer for that.

    What service providers will have to do though is make their security approaches more transparent, divulge the data locations and ensure the companies remain compliant. Today that's absolutely not addressed by the big service providers.

  • Certainly small businesses are likely to do this and it's already underway. They will probably be able to choose several cloud-based business and infrastructure suites that do such a good job of handling most typical tasks like billing, accounting/tax, CRM, email, managing a website with some light inventory, data storage & backup etc. that many entrepreneurs and small teams will forget about things like installing software altogether.

  • Do away with the IT Department or with IT Capital Assets?

    Although it may seem trivial on the surface, there is a major distinction between the two. An IT department has more than just physical "IT" or technology. It has people and processes as well.

    So, my answer is "Yes" to doing away with IT Capital Assets but "No" to doing away with the IT Department.

  • I am sure that small companies will go that path. From my past experience, small companies tend to outsource any IT tasks. Together with the flexabilty of the cloud, it would be even better.

  • Size of the business isn't the factor here, it's what their IT folks do for them that will determine whether they can scale back or completely outsource. Where the applications are deployed is not nearly as important as what the business does with them from a technical perspective as well as what other technology needs the business may have. IT encompasses a lot more than just applications. Quite a few "small" businesses keep a "jack of all trades" ops guy on staff to help with desktop and networking issues. Cloud isn't going to make those go away. In fact, extensive use of cloud computing will make that position more important for small businesses because without an Internet connection, "cloud" is useless.

    And as long as you've got one "tech guy" on staff, you've got IT.

  • I'm pondering the basis for the question. That is other than reducing overhead costs, why in the 21st century would a business not understand that IT is strategic and outsource that function to a firm that doesn't have intimate knowledge of their business or share in their goals. The question almost promotes the view that IT is nothing more than desktop help desk jockeys that can be replaced by the local chimp from the corner zoo versus a partner responsible for understanding and garnering value from the information of the business. Cloud or no Cloud, if you view IT as something that doesn't provide strategic value, then most likely your firm will continue to remain small and your growth prospects are limited.

  • Many small companies already outsource all of their IT to MSPs, and the cloud will accelerate this while making it easier and more cost-effective to manage. Even today, server can be managed remotely, with remote installation of applications, real-time monitoring and remote maintenance. Moving applications and infrastructure to the cloud will almost completely eliminate the need for on-site visits. While it’s true that someone will have to manage this internally, there will be less expertise required, and certainly less time needed, so in many cases this will roll up into someone’s job description (operations manager, finance director etc.)

    It is likely the MSPs will remain in the picture, and small businesses will not start working directly with vendors, as this will significantly increase complexity and prevent the business from utilizing the best tools available on an ongoing basis.

    At CTERA Networks, as a vendor of cloud-based data protection solutions, we already see that happening.

  • Do away with? Not likely for most of the SMB market - you still have to manage network and hardware issues. However, IT investment will be scaled back considerably when apps can run from the cloud instead of on-premise

  • Yes it will. In many companies IT would would become part of purchasing. Still requires some knowledge, but basically it becomes selection of suppliers according to users demands.

  • Interesting collection of responses. The two camps seem to break down into:

    No. SMB still requires an IT specialist to understand IT. "still need a person or two to analyze what applications need" "An IT department has more than just physical "IT" or technology" "you've got one "tech guy" on staff, you've got IT" "you still have to manage network and hardware issues"

    Yes. Business is now quite capable of understanding and buying their own IT services, and there are a lot to choose from. "unable to run IT cheaper than public cloud" "cloud-based business and infrastructure suites that do such a good job of handling most typical tasks" "small companies tend to outsource any IT tasks"

    So, does the SMB need IT specialists? Or don't they?

    Enterprise applications are a commodity, and business processes are rapidly heading the same direction. Most SMB focus on either being geographically unique ("your logistics provider in the upper-lower midwest quadrant") or by providing a high touch service ("we know your specific business/problem"). Marginally better IT isn't going to help them, so they're focused on cost and convenience. We can expect this to drive the breakup of old SMB IT departments into a few pieces, which will then be bought on the open market or delegated:

    1. Vertical, industry turnkey SaaS and bureau solutions for low touch or transactional services. Think payroll, collections, CRM, fulfillment …

    2. Niche "solution and services" offerings for high touch services. Think web development (with design and dev rolled in) or project portfolio management (with project managers rolled in)

    3. Delegation to employees and other service providers. Why buy a laptop for all your employees when they all already have one? Why run a network when all your services are in the cloud, and all your property managers provide Internet connectivity and wifi/cabling with the lease?

    SMB doesn't need IT departments, but do they need IT specialists? We need to admit that, with the consumerization of IT, IT is no longer a black art. A growing number of business people are perfectly capable of taking care of their own IT needs; they don't need a specialist to analyse their application needs, an ops person to keep their tin running, or a infrastructure person to run cables. The majority of SalesForce.com et al accounts, for example, are created by sales teams working around the IT department, finding a solution which better suits them than the one selected by IT. I'm seeing the same trend with a range of services. And we should remember that many BPO deals (such as payroll) have IT consulted ("you need to integrate with this") rather than responsible ("find us a payroll provider please").

    The only corner case here are events like the printing disaster: what to do when you can't print and have an important meeting in 30 minutes? The old school approach is to call support and try and fix the printer or the computer: business user as helpless consumer requiring IT wisdom. Consumerisation of IT means the many people are more likely to reach for a USB stick (or just email the document) and try someone else's laptop, or just head downstairs to Kinko. User willingness to self support is removing the last need for an IT department.

    So I side with the folk who say that the SMB IT department is going away (might like the Chief Power Officer et al). However, like similar transitions, this is going to take a little while as SMB will not transform en mass, but company by company.

    r.

    PEG

  • Lots of answers during my last night!!

    A simple answer is NO, and agree with Julie, scale back.

    For business people, using production systems on cloud environments is easy, no doubts.

    But to have a production system on a cloud environment up and running is a bit tricky for most business people, I reckon.

    For example myself, Openbravo ERP on Amazon EC2. I had to setup a production instance, add an EBS for backup, mounting it. Setting up a new security group so that only my home office, my accountant and Openbravo Support can access my instance. Setting up ssh and port forwarding to use Database Admin tool and Report tool. Even within the ERP there are technical aspects (backup, restore, logs, java ant commands etc.) and business aspects (chart of accounts, GL, taxes, products/services, customers, suppliers, projects, expenses, procurement orders/invoices, sales orders/invoices, etc.).

    Yes, a small company can outsource the all of those. But some ones need to make decisions for the sake of their own company. Hence one for technology, and two or three for business areas should be the very minimum requirement, it doesn't have to be full time assignment, though.

  • If I were a cloud vendor speaking, then I'd definitely play the 'leave IT to us' message and work on making it happen or at least convince ourselves to work on achieving that goal. Makes perfect sense and noble thought if you really think about it.

    But even without the 'IT department labels' for the staffs or staff assigned, moving on, companies will always have IT. As long as there's gadgets and stuff and we all know that doesn't stop requiring fixes. It's not just a 90's thing anymore.

  • Interesting question - one I think Mashable answers quite well in their recent article about how Cloud Computing & Web Services are changing the IT job market, and how having Business Intelligence and Web Analytics skillsets are highly valuable in today's tough economy (http://bit.ly/hXJDE7). Basically, their stance is that as cloud and web services continue to gain speed, the upfront cost of launching a product is decreasing. Businesses can create more for less money –- and with less people.

    Though in the long run this likely means fewer IT positions, it’s currently changing a different aspect of the tech job market: desired skill sets.

    Unlike traditional software products, cloud and web services revolve around content, monetization and data. Much of the installation, configuration and maintenance work done by traditional data center employees is becoming automated. This means desired skill sets will move away from hands-on technical work to include managerial talents, user-experience knowledge and more.

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