IT departments must understand that the Cloud is more about new behaviors and business models than lowering the cost of running IT, writes Tom Koulopoulos in this guest blog, excerpted from his new book, Cloud Surfing.
I just keynoted a gathering of 2000 senior IT execs in Washington DC. As is the case at every IT gathering I’ve been part of for the past five years, the cloud was in nearly every conversation. Yet, most IT professionals continue to characterize the cloud as a way to cut costs and ease the burden of fast changing technology. Even worse, some of the IT professionals that I talk with see the cloud as a threat, as if it were some sort of black hole sucking IT into oblivion.
Guess what? They are right, it will destroy IT unless we quickly shift the attitude and the conversation about the cloud from a focus on IT costs to a focus on business value.
The cloud, as I see it evolving, represents the consummate disruptor to not just the traditional notion of IT as a separate organizational function but also traditional notions about business risk and innovation – and it is IT’s responsibility to get this across by reinforcing the importance and the impact of the cloud, well beyond technology, to leadership.
In fact, whenever a conversation about the cloud begins to lean in the direction of any particular technology, such as E-mail, social networking, cloud computing my first response to point out that these are all just details that may make it easier to define how parts of the cloud work, but they don't get to the heart of how we as individuals and organizations will behave because of the cloud - and it's the behavior of this new cloud-based world order that we most need to understand in order to refocus the value proposition of IT, and build the business models for the future.
| "It is how we as individuals and organizations will behave because of this new cloud-based world order that we most need to understand in order to refocus the value proposition of IT " |
First, we need to appreciate that the cloud is a game changer which redefines the notion of business risk, R&D, and so many of the rules about the way we build and run our businesses. At the root of this change is the way that the cloud nearly eliminates the investment required to start a new business or to expand an existing one. What cost me millions of dollars to build when I was creating the infrastructure for services delivery at Delphi Group ten years ago is now available at next to nothing. You can look at that and say it’s a cost issue. But as an entrepreneur I look at it as a risk issue that lowers the bar to experimentation and innovation in a way more radical than any other event in the history of commerce.
Second, please don't confuse the cloud with the Internet. The Internet is just a collection of connections. It is no more relevant to the cloud than phone service is to how you build a business or an economy. You may need phones to run a business, but you don't build your business model around them. The cloud is the foundation for business models that are built on the ability to capture the most detailed nuances of behavior in and create value from them in real time. Whether that’s Google or Facebook or my mobile provider capturing trends in my behavior or the way a company can predict the emergence of new market, the role of behavioral business models that capitalize on the more than 100 billion connections that will exist in the cloud by 2020 is a bastion of opportunity for value creation.
To survive IT has to elevate the conversation about the cloud from the boiler room to the boardroom in order for leadership to better understand one of the most profound shifts shaping the way we do business.
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