It wasn’t all good news for Enterprise IT coming out of this year’s Gartner Symposium. We’ve already highlighted our “Top 5” … here’s the “Bottom 5,” and the implications for enterprise CIOs:
1. Continued Confusion over the Private Cloud
Gartner isn’t giving companies clear guidance on the private cloud, and appears to be divided internally on the topic. On the one hand, we’re told to “beware of the limitations of the private cloud, it’s just a stepping stone.” On the other hand, we’re told that “private clouds will win in the enterprise,” and presented misleading math about the economics of the public cloud (see #2).
Let’s make this simple: Building a true cloud service is hard—Amazon, Salesforce, and Google invest billions in getting it right. Here’s the question that every CIO needs to answer: do you want to be in this business? And just because you CAN (due to your scale) doesn’t mean you SHOULD. Remember Economics 101, the law of comparative advantage—invest your resources where you are differentiated, and outsource the rest. Sure, you could drive your cost of storage to nearly zero if you really focused on it. But your organization will be better off if you focus your resources on what you do better than anyone else
2. Bad Math in the Business Case for the Public Cloud
We’ll be the first to admit that building a concrete business case for moving existing IT to the public cloud is not straightforward. For example, it’s entirely possible to move an application to the cloud and not save ANY money if all the on-premise infrastructure is still shared by other applications and the application is not enhanced. Building a business-case driven roadmap requires a careful analysis of what you spend where, and finding “trigger events” where there’s opportunity to expand benefit, defer expense, or drive cost savings.
Gartner knows this—they perform incredibly sophisticated benchmarking and costs analysis for their clients. That’s why its so painful to see them present inaccurate “rules of thumb” to CIOs about when it might make sense to look at the public cloud. Consider email: We were told that cloud-based email was less economical for companies with more than 5000 employees. But there’s no magic size of company above which running your own email makes sense– we’ve helped Internet Service Providers decide that they wanted to use the public cloud for nearly 100,000 inboxes. There’s any easier way to make it simple—look at the question in point #1. Then use a real business case to drive your roadmap, not rules of thumb based on company size.
3. Vendor FUD around Cloud Computing
It was easy to tell which vendors had a coherent approach to cloud computing by the amount of FUD in their marketing. Culprit #1? Marc Hurd, CEO of HP. He claims to have “gotten boos” from a room full of enterprise executives when bringing up the topic of cloud computing, and told the CIOs at Symposium that “HP would never put anything material outside the firewall.” Where does HP really want to see all the information in the enterprise? “We love it when its printed,” joked Hurd. More ink cartridges. Nice.
4. Defensive behavior & job preservation
Of course, self-interested behavior isn’t limited to vendors. It was equally painful to hear IT leaders sometimes put the interest of their group above the interest of the business. The most aggregious example? One UK CIO who saw the adoption of SaaS solutions by his business units as a “cancer that needs to be eradicated.”
The reality is that the role of the CIO is going to change dramatically over the next couple of years. Those who take stock in the size of their team and their budget will say “you can take my servers out of my cold dead hands” (to quote one session), and will be left managing inefficient, non-strategic infrastructure. Those who are aggressive at adopting cloud alternatives, on the other hand, will be able to focus on the issues most important to their business partners, and get a well-deserved seat at the table setting the direction for their organization.
5. Too much thinking, not enough doing
To Gartner’s credit, every session ended with a page on “what should I do now.” But the recommendations were too often “think,” strategize” and “calculate.” Of course these are all important steps, but what’s missing is the need to “experiment” and “prototype.” One of the key advantages of the cloud is the transparency of what you get – you can start to experimenting in minutes.
Strategy and prototype go hand-in-hand, and should be done in parallel. The best way to see what the cloud can do in your organization is to have someone sign up for a free developer account on a cloud platform and spend the weekend building a prototype…. that insight can be combined with a business case to develop the roadmap to the cloud your organization needs.