Tag: next generation IT

What If the Hackers Had Attacked Sony Through Microsoft Azure Instead of Amazon’s EC2? | Gaining Altitude in the Cloud

There is widespread speculation that the recent attack on Sony was accomplished by utilizing credit card information stolen via compute resources purchased from Amazon’s EC2 cloud offering. This high profile incident has attracted attention in the mainstream press and in the blogosphere, underscoring the interconnected and anonymous nature of cloud computing, as well as the need for vigilance and improved security. Interestingly, there has been little attention paid or blame allocated to Amazon’s EC2 offering in the public discussion. Amazon, rightly or wrongly, has largely escaped unscathed, and the cloud infrastructure services sector – of which EC2 is the most visible champion – continues to enjoy increased adoption, favorable press, and commentary largely unaffected by this incident.

There are many good reasons why Amazon’s EC2 has not been vilified and cloud adoption continues at its frenetic pace. But what if the circumstances had been different? What if the credit card information had been stolen utilizing Microsoft’s Azure platform? Would the world have responded with the same collective yawn? Would there have been an attempt to hold Microsoft accountable for the nefarious use of its compute power? Would open source enthusiasts have suggested it to be another reason to move to open source from Microsoft products? To explore this, let’s first examine why it might have made a difference:

  • Microsoft plays a different role in championing cloud than Amazon. Azure is the Microsoft answer to the Windows operating system (OS) and bundled IP provided through the cloud. As such, it represents Windows and the dominant OS at this time.
  • As the dominant OS provider, Microsoft appears to be held to a different standard than most other providers; if there is a hole in Windows, we are all vulnerable (except, of course, Apple fanatics).
  • Microsoft acts as a lightning rod like no other, drawing negative attention from all quarters.
  • There seems to be a preference to excoriate past monopolists in favor of newer entrants that may yet gain similar market power, akin to market behavior that favored the Microsoft upstart over the established IBM in the 1980s.

So, what would have happened? Would the steady march to the cloud be delayed as we criticized Microsoft and questioned more deeply not only its culpability for how its service is utilized, but also the requirements for security in the cloud more broadly? Would regulators be initiating inquiries threatening further changes in compliance security laws, or attempting to add responsibility to providers of compute power? Or would there have been a similar yawn? It’s interesting to speculate… and as we do, what does this tell us about where we are headed and where we have been?

Consumerism is Driving Healthcare Organizations’ use of mHealth, the Cloud and other Technologies | Gaining Altitude in the Cloud

At an mHealth conference I recently attended, Kaiser Permanente Information Technology’s senior vice president stated, “Our integrated model, scale and technology are providing the foundation for delivering truly real-time, personalized healthcare. That is our journey and this is our obligation.”

He hit on one extremely important point – personalized healthcare. But there’s another critical reality in the healthcare industry…consumers and consumer convenience are driving the ways in which healthcare companies will support patients’ needs, and it’s all around the technologies most of us use today.

Think about it in the context of mobile technologies. Mobile is:

  • Pervasive – 91 percent of Americans own a mobile phone and 75 percent own a PC
  • Always on – Users access their smart phone more than two hours per day
  • Simple and convenient – Little or no training is required for usage
  • Location aware – in America, 150 million GPS locator devices were sold in 2009
  • Context aware – i.e., sensor technologies such as OnStar, the in-vehicle security system

With mobile being such an integral part of our lifestyle, consumers will push for increasing mobile health (mHealth) capabilities to research, access, and pay for healthcare. And consumers’ influence on how healthcare providers leverage technological capabilities potentially extends far beyond mHealth. Questions healthcare companies must consider include: Are consumers leveraging social media to select healthcare providers, learn about service prices to enable them to negotiate with healthcare providers, etc.? Will consumers push to pay for healthcare via PayPal-type services or a smart phone application, rather than by credit or debit card? Should healthcare providers establish their own online medical condition search capabilities for their patients, including live chat with medical specialists, to help retain patients and help ensure better diagnoses? Should they build consumer-friendly, self-administering applications such as diabetic patient monitors that will administer insulin as needed based on preset dietary information? Should these be free services, or should they carry a small fee ala www.justanswer.com which gives consumers access to a wide range of medical/health professionals for a nominal cost per query?

From an “inner workings” standpoint, strategic aspects healthcare organizations must consider as they relate to mHealth and use of cloud computing as a delivery platform for mHealth include:

  • To what extent should they develop applications and employ methods that will allow consumers to use personal tools (e.g., iPad, iPhone and Blackberry) to access those applications?
  • What will infrastructure platforms look like, and to what extent will cloud computing play a role?
  • Will internal “App Stores” become necessary, and how will those be managed?
  • What will be the organizational impact of migration to cloud and next generation platforms – i.e., what will internal IT, roles/skills, governance, and core processes look like in a post-transformation end-state?
  • How can organizations more effectively drive improved utilization of existing assets, while cost-effectively adding new capacity via cloud or next-generation data center models?

I realize I’ve asked a lot of questions in this blog, and that was exactly my intent…healthcare companies and providers of the technological capabilities must consider these questions and many more if they are to succeed. The reality is that packaging mHealth solutions is highly challenging because of the complexities that exist in the diversity of service providers (carriers, integrators, device and appliance providers, and application developers) each of which provide vital pieces of the puzzle including network backbone, broadband, mobile integration support and maintenance, cloud computing capabilities, and application development and provision. In today’s service environment there are traditional boundaries that will have to be bridged, and success will be based on service providers’ development of an “mHealth in a box” solution set. It can be done, but it won’t be an easy task.

How Cloud Computing Is Reshaping The Role Of The CIO | Gaining Altitude in the Cloud

This blog was originally posted in Forbes’ CIO Central on August 3 as a contributed piece. Read the original post.


Four disruptive forces are causing executive teams to reconsider how the CIO function will add strategic value in a world where cloud computing, distributed architectures and mobile ubiquity are givens for future competitiveness.

Rising Server-to-Admin Ratios

When 25 physical servers for each IT admin was the norm, CIOs built organizational structures suited to that reality. Hiring, training, reporting lines, compensation, key success factors, annual reviews, career advancement and social norms were all built around that 25:1 ratio. Now, enterprise IT is facing the near-term reality of ratios that are 100:1, 500:1 or even 1,000:1. Google is rumored to be aiming for a 10,000:1 goal.

This massive increase in administrative density signals wholesale changes in the enterprise IT org chart. It changes who is hired, what skills they must have, how they will be trained and managed, evaluated and compensated, how they interact with and support business units, and what their long-term career paths will look like.

IT Becomes a Variable Cost

In the early 90s, when the CIO title was gaining popularity, the chief driver for bringing IT into the executive suite was the massive capital allocations required to give organizations a competitive advantage through rapidly changing technologies. These technologies demanded larger and larger percentages of the corporate budget, so a direct line to the president or CEO was paramount in justifying these spends.

Cloud and next-generation IT strategies dramatically change this. What was once CAPEX increasingly becomes OPEX, and long-term risk falls accordingly. So, where’s the strategic value in having IT in the executive suite? Arguably, it’s more important than ever.

The increase in business agility and responsiveness that cloud computing makes possible shifts the strategic value of the CIO from a technical role to a business role. CIOs must understand the functions they support, so they can help these functions quickly put the infrastructure and applications in place to support quickly moving new ideas to market, testing them, and iterating them to general release. Competitors will be doing this (and already are, in several industries).

End-User Auto Provisioning

End users are gaining a level of power that makes past demands for integration of Blackberries and iPhones seem whimsical by comparison. CIOs accustomed to pushing back against new ideas based on security threats and support burdens will increasingly find themselves cut out of the deal by end users who can go online and provision SaaS (software as a service) and IaaS (infrastructure as a service) with a credit card.

As Vivek Kundra, until recently the White House CIO, has said, “the more a CIO says ‘no,’ the less secure his organization becomes.”

Infrastructure Becomes Commodity

New — and largely uninvented — processes are required to deal with all of this change. Governance, compliance and security are all matters that 20 years of client/server policy is ill equipped to deal with. On top of this, CIOs must develop policies for the rapid growth of collaboration technologies (and, yes, social media) that employees will increasingly require in order to do the job the CEO is asking of them.

These shifts signal the need for the new CIO to bring an entirely new set of skills to the game. Yes, the new CIO’s job will continue to require an understanding of infrastructure and architecture, but a knowledge of how to turn the dials and knobs will be far less important tomorrow than it was yesterday. Tomorrow’s winning CIO will bring an MBA’s understanding of finance, marketing, operations, HR and the other functions. CIOs will understand how to say “yes” to new services that make their companies competitive, while mitigating risks and allowing for small-scale failures in the pursuit of long-term success.

Banks of the Future, Bank Big on Technology: The Changing Applications Landscape in the Global Banking Industry | Sherpas in Blue Shirts

A rapidly evolving business environment is causing the global banking industry to rethink the way it leverages technology. Market growth objectives post the recession, the desire to create a globally integrated multi-channel environment, and managing the complexity of new products are placing increasing pressure on global banking institutions to move toward a “bank of the future” paradigm. The transition to this future state requires banks to realign their technology environment and, more importantly, their IT applications portfolio. Recently released Everest Group research report, IT AO in Banking – Trends and Future Outlook, highlights the key drivers causing this evolution. Following is a summary of the three most noteworthy trends we identified:

Increasing focus on customer-centricity: How does the “bank of the future”communicate with its customers? The recently unveiled technology-studded concept branches of Barclays and Citibank offer us a preview.

Barclays Piccadilly
Barclays Piccadilly Circus branch in London’s West End. Photo credit Barclays

Barclays’ flagship Piccadilly Circus branch in London went high-tech in December 2008 with multiple types of cash machines, an interactive video wall, a floor staff equipped with tablet PCs, and a “premier lounge” with Microsoft Surface technology. Citibank unveiled an even more tech-savvy branch in New York’s Union Square in December 2010, featuring interactive iPad-style “sales walls” that allow customers to purchase the bank’s products through a flip-friendly, touch-screen interface. Other high-tech features include Wi-Fi access, enhanced-image ATMs to deposit checks without envelopes, and 24/7 video chat station for speaking with a customer services representative.

The clear, common underlying theme behind the extensive use of technology at these banks of the future is improving the customer experience. That said, the bank of the future is not just about having high-tech feature-packed branches; it is also about being in contact with the customer through other channels such as the mobile and Internet. Some banks are using Web 2.0-based technologies to service existing customers and reach out to new ones. ABN Amro, ING and Rabobank all have dedicated web-care teams that communicate with customers through social media. Banks are also striving to provide customers with a uniform and convenient banking experience across channels, be it physical branches, web portals, or mobile devices.

Citibank Union Square
Citibank branch at New York’s Union Square. Photo credit: Jay Irani

Managing complexity in banking operations is becoming exceedingly important as banks’ operations expand and the regulatory requirements become tougher. Frantic M&A activity during the recession and the subsequent foray of banks into newer markets such as the Middle East, Africa and Asia, have created large banking entities with many disparate systems that require integration and standardization. Banks are striving to create a unified view of the customer by integrating complex customer data from across geographies and product lines in order to address risk and improve sales effectiveness.

The regulatory environment today is also tougher than ever before. Regulations such as Basel III (which will be phased in from 2013 to 2019 globally), the U.S. Dodd-Frank Act, and the reverse stress-testing requirements for banks in Europe all require banks to be on top of huge volumes of customer data and process it real-time to assess risk. This will require most banks to upgrade their IT backbone, with a special focus on data management and analytics.

Improving profitability has, expectedly, become an important driver against the backdrop of the pressures brought on by the financial crisis. Banks are continually striving to remove redundancies in operations, improve business efficiencies, and achieve cost savings especially in the middle- and back-office activities. Technology outsourcing continues to be a key enabler of all these goals. Cloud adoption is another emerging opportunity by which banks can meaningfully reduce their IT costs and complexity.

Technology is widely regarded as the panacea for addressing the challenges associated with all these themes of customer centricity, complexity, and profitability. Technology is fast changing the way consumers do banking and the way banks do business. Banks are banking big on technology to prepare for the future today, and tomorrow’s IT services leaders are working fervently today to lay the groundwork.

Related Reports:

Evolving Cloud, Evolving Advisory Role | Gaining Altitude in the Cloud

Avid readers of this blog can tell by now that Everest Group is excited to participate and contribute to the market discussion on the impact of the rapidly evolving cloud industry. We get tremendous satisfaction from both the online and in-person conversations our blog topics have generated in the last year and promise to continue to contribute our informed viewpoints with continued enthusiasm.

Enterprise IT leaders we talk with every day find themselves at a crossroads. The cloud revolution is nearing an inflection point, promising to radically transform the way IT services are delivered. At the same time, there is an equally strong “echo chamber” effect in which promises and benefits are refracted through various service provider prisms, creating a significant challenge in separating what’s possible from unhelpful hyperbole. Additionally, the focus in the current market tends to be on the ever-evolving technology upgrades and releases of various cloud components, which leaves most CIOs in the dark when it comes time to try and sell the economic benefits of cloud technology to their key internal stakeholders.

IT organizations have had enough theory and are ready to start working in more practical terms:

  • How do we transform the provision of IT services to our business to meet its needs more effectively?
  • How do we build a strategy to get us there?
  • What does the financial case look like to achieve our desired outcomes?

We’re excited to share the vision of our Next Generation IT Practice with you, because we believe it to be the natural evolution from our current practice of assisting Global 1000 firms drive greater operational efficiency. Our expertise allows us to help transform IT organizations to strengthen both their long-term strategic and economic positions by leveraging the next generation of technologies.

Our vision for this new practice is simple: provide a bridge between strategic direction and technical execution for IT transformation without bias towards the desired end state. We believe this is where the current advisory market falls short and Everest Group can add the most value.

Our Next Generation IT team is successfully able to:

  • Build on existing experience helping large IT clients develop strategies
  • Leverage our breadth of research on the service providers’ strengths and weaknesses
  • Adopt a time-tested methodology to include next-generation technologies
  • Utilize our business case modeling skills to construct a versatile tool for helping assess transformation economics in a way that is unique in the marketplace

We cannot wait to share more details about how our team at Everest Group has helped clients develop a roadmap towards transformation in the coming weeks, so that we can continue to contribute thought leadership in this space.

Learn details about how our Cloud Transformation and Next Generation IT offerings can help your organization achieve the strategic value it’s seeking.

End User Computing in the Cloud | Gaining Altitude in the Cloud

Since the inception of the end user computing (EUC) space in 1982, there have been many exciting moments including the first IBM PCs, the first Macintosh PCs, personal networking, desktop publishing, laser printers, Microsoft Office, and the Internet.  More recently, the advance of portable devices and media-centric applications have been of interest, but it’s been some time since I’ve been really excited about using my PC. That’s about to change. The convergence of network capacity/availability, technology, and applications are about to create a whole new EUC experience both personal and professional – the cloud!

How the cloud is integrated into corporate infrastructure planning varies by client, but the implications for optimization, virtualization, flexibility, and management are dramatic. New business models are emerging, and firms are working though security, compliance, and other considerations at a feverish pace. While the cloud is going to be very disruptive to corporate infrastructure, and many articles have been written on that topic, little has been written about how the cloud is going to impact us personally, as end users. So, let’s go there.

A few weeks ago, Apple announced its forth-coming iCloud offering. Think about having anywhere, anytime, any device (Any3) access to all the media you’ve ever purchased (on any device) or ripped (legally) to a PC. Imagine no longer being tethered, memory constrained, or having to sync with your PC in order to have access to your personal media when and where you want, regardless of hardware. That’s exciting. That’s the cloud!

Any Access

Additionally, little attention has been paid to how the cloud will ultimately change our professional computing experience. The reality is, the line between personal and corporate computing assets (from an end user perspective) is starting to blur. Imagine having the same Any3 access to every file, e-mail, contact, link, note, or application that you need, regardless of where that content originated, where you are physically, which application or version is licensed on your device, or even what device you happen to have available at the moment. Whether it’s your phone, tablet, notebook, office PC, home PC, a public PC, or even your grandma’s…you’ve got access to what you need! Next, think of the collaborative opportunities that will be enabled for document generation, review, and editing, and you get an idea of the future of EUC…it’s the cloud!

The cloud’s impact on EUC will go beyond just functionality and productivity, however. From a commercial perspective, the cloud will fundamentally change the way EUC services are procured, provisioned, licensed, updated, upgraded, and managed. It will also have positive implications on long standing issues like piracy and intellectual property.

From a usage standpoint, let’s think about just one of the commercial impacts in EUC that the cloud will dramatically impact…licensing. The cloud is going to make it truly use/user-centric. In an average 2,000-hour work year, how much do you actually use each of your applications? Maybe Office for 600 hours, PowerPoint for 500, a variety of other apps like Excel, SAP, Oracle, or Salesforce.com for another 400 or so combined, and one or two specialized applications for just a few hours or days? The cloud will usher in an era in which you’ll be able to use applications on demand, on any device, wherever you are, whatever time it is, for as much or as little time as you need them. And you won’t have to worry about licenses, versions, installation, updates, compatibility, etc.

Now that’s cool. That’s the cloud. And it’s coming soon to a device near you!

Learn more about Everest Group’s cloud transformation expertise.

Microsoft Confuses Economies of Scale with Next Generation Data Centers | Gaining Altitude in the Cloud

In a recent article in Information Week, a Microsoft executive made the claim that the economies of scale of cloud data centers were so compelling that few companies, if any, would want to continue to operate their own. He went on to offer Microsoft’s cloud data centers as the proof point. He stated the Microsoft cloud data centers operate on next generation architecture. Instead  of housing servers in hardened data centers, which are expensive to build, cool and maintain, Microsoft utilizes new hyper-scalable architecture that jam packs servers and storage into vapor-cooled containers similar to those you see on the interstate being pulled by semi trucks. Microsoft achieves resilience exceeding that in the hardened data centers by duplication of assets in multiple locations. And when combined with the flexibility of virtualized cloud offerings, the net result is dramatically lower cost – to the tune of as little as 25 percent of the cost to build and run their level 4 hardened cousins.

Our counterpoint: we have been conducting extensive research, and our analysis confirms that many next generation data centers are significantly less expensive than many cloud offerings. Further, they are mature enough to support enterprise-class computing today, and are far more flexible than traditional legacy data center infrastructures. When enterprises combine these benefits, they can indeed achieve dramatically lower computing costs. It’s important to recognize that these are not driven by economies of scale; rather, they arise from the advantages of radical new architecture and technology. Everest Group’s work strongly suggests that whereas economies of scale do exist in next generation data centers and their related cloud offerings, most of the benefits are reached quite quickly.

A vital distinction – next generation data centers and private cloud are available to most mid to large enterprises at a cost comparable to that of mega Microsoft. Enterprises seeking to capture these benefits should not be seduced by claims of massive gains provided by ever increasing size,  but should instead focus their attention on how to leverage the architecture and next generation technologies while adapting their applications and organizations to take advantage of these dramatic new opportunities.

Economic Forecast Calls for More Clouds | Gaining Altitude in the Cloud

Have you ever stopped to think why cloud computing is at the center of any IT-related discussion? In our conversations with clients, from the boardroom to the line manager, cloud is sure to enter into the discussion. Today, many of those conversations are around understanding, and to a lesser degree, implementation. But once the discussion crosses the threshold of understanding, the topic immediately goes to, “How can I get into the cloud?”

Everest Group recently held a webinar on the economics of cloud computing. There were two objectives: 1) Help clarify just how disruptive, in a good way, cloud computing is and can be; and 2) Demonstrate the economic benefits that exist in the cloud economy, and that there are those striving for this competitive advantage today.

The Hole in the Water That You Throw Money Into

One of the key economic drivers that hampers today’s data center environment is the relatively low utilization rate across its resources. Think about it like this: You’ve probably heard the old adage that owning a boat is like having a hole in the water that you throw money into. That is because the majority of boats are seldom used. (Trust me, I know, I used to own one.) The per use cost of a $25,000 (and quickly depreciating) boat that you actually use three or four times a year is quite high, and the reality is you could have rented a boat often for a fraction of the cost. The same thing is happening in your data center. If your utilization is 20 percent, or even 30 percent, you have essentially wasted 70-80 percent of your spend. That is an expensive data center.

Workload Utilizations1

Cloud computing is like that little boat rental shop tucked away in a nice cove on your favorite lake. What if you could get rid of excess capacity, better manage resource peaks and valleys, and rent public capacity when you need it, and not pay for it when you don’t?

What if we leverage public cloud flexibility1

The Economics

As you can see in the graphic below, the economics related to cloud are dramatic, and the key lies in leveraging the public cloud to pay only for what you use, eliminating the issue of excess capacity.

Public cloud options unlock extraordinary enterprise economics

There is a variety of point examples in which this is done today, with the above economics reaped. For instance, Ticket Master leverages the public cloud for large events, loading an environment to the cloud, specifically sized for each given event. The specific event may only last several hours or days, and once complete, Ticket Master takes down the environment and loads the data in its dedicated systems.

There are also enterprises and suppliers working to enable peak bursting more seamlessly. For example, eBay recently showed where they are working with Rackspace and Microsoft Azure to enable hybrid cloud bursting, allowing eBay to reduce its steady state environment (think hole in the water) from 1,900 to 800 servers, saving it $1.1 million per month.

Hybrid economics example eBay

 The Steps to Getting Started

Dedicate yourself to getting rid of your boat (or should I say boat anchor?) Begin a portfolio assessment. Understand what you have, and what is driving utilization. Consolidate applications, offload non-critical usage to the valleys, and look for ways to leverage the public/private cloud. When I unloaded my boat, I freed up capital for the more important things in life, without sacrificing my enjoyment. Doing so in your data center will allow you to take on strategic initiatives that will make you even more competitive.

The Risky Side of Offshore Growth: Operational Challenges with Indian Majors? | Sherpas in Blue Shirts

In my May 3 blog entitled “Size Does Matter – The Real Pecking Order of Indian IT Service Providers” – I commented on the rapid growth achieved by the Top 5 Indian IT majors or WITCH (Wipro, Infosys, TCS, Cognizant, and HCL) in the last few quarters. Last week as we were rounding up our latest service provider risk assessments, I couldn’t but help notice that this very growth has taken its toll on some of these providers, with buyers increasingly highlighting service delivery concerns especially as it relates to the quality (or lack thereof) of resources deployed on their engagements.

Since the Satyam crisis in early 2009, Everest Group has been tracking global and offshore majors across a number of dimensions to analyze patterns that indicate deviation from “ideal” behavior, and thereby highlight risks to service delivery. Based on analysis of 1Q 2011, our risk dashboard for the WITCH majors required a change in operational parameters from “No Risk” to “Marginal Risk.” While individual, provider-specific rating changes are common, this is the first occurrence of a collective group rating change since we started our assessment over two years ago.

WITCH Risk Dashboard

At the core of these operational challenges is the strain on the labor model of the offshore majors that are “blessed” with an environment of hyper growth. With attrition levels at a three-year high, service providers are being forced to meet the commitments for new logos/projects by rotating employees out of existing accounts, especially smaller ones. This practice of robbing Peter to pay Paul is eroding service quality and creating concerns for clients. Further, the hiring freezes and cutbacks at the peak of the economic crisis in late 2008 and most of 2009 created an imbalance in the labor model. Service providers are now having to back-fill for attrition through relatively junior and less-experienced resources than those to which clients were typically accustomed.

Attrition Trend for WITCH

WITCH Attrition Trend

To clarify, this is not a “WITCH hunt” and should not be read as propaganda against offshoring, India, or the WITCH majors. I firmly believe in the fundamentals of offshore growth, India’s delivery competitiveness, and the capabilities of WITCH majors’ management to navigate what we hope are merely short-term hiccups. The issue, however, reinforces the need for a more robust approach to global sourcing risk management in which being proactive is key to staying ahead of the game. While a proactive approach does not guarantee prediction of the next major crisis (e.g., Satyam), our experience suggests that a focused and consistent approach can deliver early warning signals to buyers, who can then use them to potentially undertake mitigation or course correction strategies. After all, as the old saying goes forewarned is forearmed!

In a complimentary Breaking Viewpoint released earlier this week, I shared additional information on this topic, and provide perspectives to better manage the current set of offshore delivery challenges. Download the complimentary Breaking Viewpoint.

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

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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