The cloud has moved from the margin to the core of IT operations in a remarkably short period of time. In just under a decade, CIOs have been presented with an opportunity to rip up the rulebook and create a new model for IT implementation.
The cloud now accounts for a third of all IT infrastructure spending, according to researcher IDC. In terms of software, Forrester suggests the global outlay on software-as-a-service will reach $106bn in 2016, or about 17 per cent of total enterprise application spending.
So, has the cloud finally moved to the mainstream? ZDNet speaks to CIOs who have been using the cloud to see what works and where more work still needs to be done.
1. Using the cloud to bridge gaps in services
Former Tullow Oil CIO Andrew Marks argues the cloud should be seen as a form of flexible outsourcing. "It's just one vehicle for service provision," he says. "On-demand IT is all about how the business can subscribe to, and benefit from, services, however they are provided."
Marks says the benefit of the cloud is that it offers a very different model to the traditional means of purchasing enterprise IT, where a CIO bought hardware and software for a specific location. "That set up might be fine in terms of limited services to a regional market, but you will encounter latency issues around the globe," he says. "That can be a big issue, especially if you are running IT for a highly transactional business, say a finance firm, or if you are shipping large volumes of date, such as in oil and gas exploration."
The cloud allows CIOs to deal with those performance concerns, according to Marks, by buying IT on-demand to create ubiquity of service provision. "You can challenge the third party to provide the heterogeneous service you need, whilst they, as the expert, have the capability to provide peaks in capacity and performance where and when required," he says.
"As a CIO, you can expect the platform to work and to always be available. Many IT leaders will now be desperate to avoid owning any new physical hardware, yet still be assured that service performance will be delivered. The cloud allows CIOs to make a move towards hosting and to get high levels of back-up and security for a set fee."
2. Moving to a cloud-first mindset
Working Links CIO Omid Shiraji says his organisation has a long-term aim to move as much IT to the cloud as possible, as it provides a cost effective means to gain access to new skills and expertise.
Keeping on top of all the innovations connected to the cloud can be a struggle, and he spends time chatting with younger people and upcoming IT professionals to find out what's coming next.
"They're probably more aware of the next big thing that's going to affect the enterprise," he says. "I make sure I talk about the new services that are out there. The flipside is also true - I'm aware about the changing culture surrounding the management of IT, so I prompt and challenge workers to think cloud-first."
But Shiraji also recognises a move to the cloud must be carefully managed, especially in regards to governance and information security.
"By definition, big providers - such as Amazon and Google - should be much better at securing data," he says. "But CIOs need to be aware that convincing the rest of the business about the benefits of the cloud can be a slow process, especially when it comes to issues of governance, security and approval."
3. Let the cloud take care of commodity areas
Like Shiraji, Sean Harley, IT director at Top Right Group, says his organisation has introduced the cloud where it offers a great solution to a business challenge. He says the starting point is that there are a number of commodity areas that CIOs can comfortably push on-demand.
"When it comes to areas like Salesforce and Office 365, you would almost be mad to host it yourself," he says. "Let someone else, who is an expert in this area, deal with your operational concerns." Harley says the cloud has also been used for a spot solution for challenges involving certain business projects.
"In the past, when the business was heavily reliant on outsourcing, we saw service quality go down and churn increase. For that reason, we bought everything back in-house and are now gradually identifying things that could potentially go the cloud," he says.
4. Find a balance and consider how to deal with legacy systems
Former CIO, and now digital consultant at Axin, Ian Cox is another expert who believes IT leaders would be crazy to discount the cloud, certainly in terms of the quality of provision. Yet he also issues a word of caution. While businesses will continue to move services on-demand, there is still more work to be done.
"We're not at the tipping point," he says. "So many businesses are still dipping their toes in the water. In fact, there's an intriguing mix of organisations going on-demand and those that are buying more internal resources."
For CIOs, Cox says a move on-demand can present a conundrum. "You've got legacy systems and, at some stage, you'll have to consider moving those services to the cloud, but it can be done," he says, suggesting that the momentum is in the favour of on-demand IT, despite lingering security and governance concerns.
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