Impact of Cloud on Corporate IT

Cloud computing has been widely recognized as the next “disruptive” technology that will bring significant consequences to organization and individuals alike. Depending on the current state of adoption and the perspectives of cloud services within an organization, this represent as both an opportunity and crisis for the organization and individuals with deep felt impact.

The real impact is not on technology, or data centers or application suites but on services in fact. Without the automation and commoditization of services we wouldn’t be seeing the huge trend towards the cloud adoption. Ironically, these services expose the weaknesses of corporate IT. The very services that IT vendors have honed and refined into cloud computing offerings are the very things that are eroding the value proposition for corporate IT and undermining the role it has traditionally played in organizations.

Corporate IT thus, need to step up and become more like managers of the IT services provided than the actual providers of those services in order to be seen as a value add partner to its’ peers in his/her organization. One might argue that the IT role is not any different from the traditional outsourcing boom that we witnessed in the early and mid 2000. There are 2 distinct differences worth noting. First, delineation of responsibilities between providers and IT is much more nebulous than that between IT and outsourcers etc. Given the newness of the cloud computing business and its’ fluid state of development, lack of responsibilities are to be expected. With time, more maturity in defining the responsibilities between organizations and cloud providers will occur.

The other difference between cloud computing and other, earlier trends in shifting IT services is that cloud computing is likely to involve much more direct business unit interaction with cloud service providers than with other providers previously. In fact, I have noticed a heightened trends that a lot of business units going directly to cloud service providers without even consulting corporate IT. Essentially, IT will be cut of the business loop – deliberately.

Many business units see a diminishing value of corporate IT to provide the services that the business unit need – not only in direct IT skills, but even in management or oversight of IT operations. This diminished view of IT’s value directly to business units is reinforced by cloud computing “pay-as-you-use” business model and shift from capital expenditures (capex) to operational expenditures (opex). This should sound as a beacon alarm to corporate IT.

However, it is not all lost. Corporate IT could take advantage of cloud computing to slash costs and streamline its offerings. Proactively finding ways of using the cloud to replace basic services – the things that can never be performed as efficiently as a cloud provider. Then take a serious look at what IT is doing well and where IT can really add value to the organisation. Corporate IT has a role in a cloud computing service-driven world, but it is a different role. It is a role that may well still be there for the taking – if it moves quickly up the value chain before the cloud provider does, that is.