Cloud’s Impact on the CIO | Gaining Altitude in the Cloud

Posted On May 13, 2011

Disclosure: I’ve never been a CIO. However, I’ve worked with and advised them on many engagements, so I have an understanding of how they think and the challenges they face in today’s business environment.

Much has already been written about the technology revolution emerging from cloud-delivered services, I wanted to turn the tables slightly and ponder how these technologies influence the role and skills of IT management and the office of the CIO.

Macro Trends CIOs Face

1: Strategy Replacing Operations
CIOs are facing tremendous pressure to think strategically about how IT can better align itself with business needs. An operations-focused “we’re just here keeping the lights on” approach to IT management is, at best, the minimum expectations of the job. As organizations demand more technological enablement in all parts of the business model, CIOs must fully integrate into strategy setting and change enablement within their company.

2: Era of Big Data
A study conducted by the University of California, San Diego, estimated that the volume of enterprise data produced per year (2008) topped out at 9.57 zettabytes (1 zettabyte =1 million petabytes), which translates to an average of 63.4 terabytes per company per year or 12 gigabytes per worker per day.

Although it’s a gross oversimplification, CIOs are continually asked to do more with less. They need to support their company’s desire to take advantage of big data to make better business decisions and more data-rich transactions, yet simultaneously are burdened with the liabilities of processing capacity limitations, storing and retrieving requirements, and data protection, all while capital budgets are under tighter scrutiny.

3: Speed and Agility
Almost every new technology comes attached with a promise of saving time. But to the adopter, the outcome isn’t more free time; rather, it’s a shortened expectation of the time it takes to complete a workload. In the enterprise, this is manifested in the demand of increasingly greater organizational agility and nimbleness. And as a CIO’s performance is measured by the rate at which he or she pushes initiatives that enable faster achievement the organization’s goals, one perceived as creating more bottlenecks than accelerators will not last long in the role.

Cloud to the Rescue

CIOs are challenged with consistently meeting (and hopefully exceeding) their stakeholders needs, despite the mounting pressure caused by these macro trends. Thus, even in cloud technology’s relative infancy, CIOs need to at least consider evaluating cloud solutions because of their ability to address common pain points.

Cloud technologies have the potential to help CIOs focus more on the business and less on the underlying infrastructure. While traditional ITO promised this, anecdotal and empirical evidence suggests that the reality was more often than not “your mess for less.” The subtext here is CIOs are spending too much time managing their outsourcing providers to solve technological, rather than business, problems. But fundamental to cloud architecture design is delivery of a service to the end user, which ultimately will disaggregate the supporting infrastructure from the service, and enable the CIO to focus more on solving business problems.

Cloud technologies can also address the do more with less issue. IT departments are starting to realize that the traditional one application per server approach to running enterprise infrastructure is unsustainable in a big data world. CIOs can yield benefits from cloud (and virtualization) technologies from two major drivers:

1) Increasing utilization per server – meaning either requiring fewer servers to do the same data processing volume, or squeezing more data processing out of the same volume of servers. Either way, cloud delivers more for less.

2) Thinking strategically about load balancing – an enterprise’s requirement on its IT department is neither predictable nor equal in terms of business priorities. But cloud technology enables evaluation of the trade-offs presented by flexible, on-demand data management.

Cloud technology is already having a seismic effect on expectations around business agility. For example, when the time required to procure a server goes from weeks to minutes, there is a quantifiable shift in productivity gains. And as cloud technology evolves, these gains will be further amplified.

How does the CIO’s role change?

So what does this all mean for next generation CIOs? In the short term, they will have to become informed, poke at the promises coming from suppliers, and manage the cloud hype curve on behalf of their organization.

Beyond the short term, they will need to address and manage – via a robust and sensitive change management program –the impact of the cloud’s technological transformation on a much broader set of stakeholders, including the internal IT team.

Another subtle but significant shift will be from the role of service manager to one akin to an air traffic controller for workloads. For example, with a workload that requires 240 CPU hours and you have procured a cloud that gives you 10 virtual machines, a CIO can choose to turn on one virtual machine and leave the nine others to run other workloads, but the process will take 10 days. Or, the CIO can turn on 10 virtual machines to process the same workload in one day, but the organization will be out of capacity for that day. Managing that trade off will be a new to many CIOs, and a regular situation for all.

What other concerns should CIOs have, and how should they prepare themselves?

For information on what CIOs want from the cloud: http://cloud.savvis.com/information-center and download the CIO LinkedIn Market Pulse Survey

For how roles are changing because of the cloud: http://www.pcworld.com/businesscenter/article/227238/panel_the_cloud_requires_fresh_it_skills.html

For an introduction to the economics of cloud enterprise computing that CIOs should consider, register and attend the May 24 Everest Group webinar on the topic.

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