Cloud Computing, Moore’s Law, and In-house IT


13th Sep 2012

Yesterday I attended a trade event called EMC Forum 2012 – Transform IT, Business and Yourself.  The venue was the Ritz Carlton Hotel in Doha and the event was hosted by EMC2.

Apart from the unfortunate decision to allow people to smoke in the exhibition area (this is 2012, not 1912, guys) I very much enjoyed the event and the opportunity to hear the challenges facing my colleagues today and how similar these are to those we faced twenty years ago in IT.

The thrust of the conference was that the data that is being collected and stored electronically is growing at an increasingly exponential rate, that this is a resource to be mined by enterprises, and that there are opportunities for many people as a result.

The key opportunities are as follows:

  • the opportunities for companies to transform themselves through their ability to harness the information that is now availabel to them;
  • the opportunity for IT Departments to transform themselves to support the businesses that they serve through effective adoption of cloud technologies; and
  • the opportunity for individuals to transform themselves by effectively recognising and reacting to the data-driven, as opposed to technology-driven, world.

Bearing in mind that the conference was hosted by a hardware solution vendor and its partners, the content was nevertheless, often stimulating and thought provoking. Sadly much of the material that was presented was very similar to that many of us have seen before, the labels have changed, but the messages are the same.

Takeaway 1: Moore’s Law can be shown to be a good basic predictor of demand. It can be used to plan how you will deliver your IT Services; or how you should structure your outsourcing contract

Some of the rhetoric, that the growth in data will cause the “biggest wave of change that IT has ever seen” and that “the cloud will transform IT AND businesses” are clearly hyperbole. Motherhood-and-apple-pie-type statements that any of us who have spent any significant length of time managing IT services will recognise as being rolled out annually by vendors.

We know that the rate at which we can store, collect, move and process data will continue to increase exponentially and that the costs to do so will NOT. This has been true for three decades and we have seen whole new industries and business-models spring into existence and old paradigms die as a result. We are seeing the impact on the book, movie and music industries as I write this.

Hopefully CEOs and Boards today are considering how they will transform their own businesses to take advantage of this information-age fundamental. They probably don’t need a hardware vendor to point out the bleedin’ obvious; whether or not the message will filter back to the top from the large technical attendees is somewhat questionable.

Takeaway 2: IT Operations is NOT core business for most companies and internal IT Departments don’t cope well with the need to change

Another fact (which has been rolled out regularly since the 1990’s) is shocking in its implication; “70% of the effort in the IT Department is keeping-the-lights-on and only 30% is spent on innovation and developing new capabilities”. This quote apparently comes from the Forrester Research organization although no date is attributed to it. Again this is hardly news, I remember similar figures being floated by Gartner back in the mid 1990’s.

What is really frightening is the fact that so many companies still maintain in-house IT Departments. These dinosaurs attempt to provide IT services using in-house resources and consequently contribute little, if anything, positive to the  company’s bottom line.

My bottom line on this matter: if it facilitates or supports, but doesn’t contribute to, improving your business – it’s not core business – outsource it. Smart management should be concentrating on increasing business, quality, and profits, not keeping the lights on.

Have a look at the statements below:

  • We need to run our helpdesk in-house because the healdesk staff need to know our business intimately
  • Our need for data storage is different to our competitors, we should keep it in house and manage it ourselves
  • Our IT needs are different, we have specialists who know our business and no one can provide IT like we can
  • Outsourcing is too expensive
  • We can run IT better and more efficiently than an outsourced provider
  • Cloud services are not secure, stable or trustworthy
  • We would lose control of our intellectual property / company secrets if we put it “in the cloud”
  • Our information security needs make us special, they are not the same as others’
  • Our user’s requirements are different to other industries/companies/organisations

If you are a CEO of a large enterprise and your IT Director is telling you any of these things the I know a nice piece of Queensland swampland that you might be interested in buying.

If you have an IT, Informatics, or information management department at all they should be working with functional heads to figure out how information resources can be most-effectively leveraged to improve the business. They should not be delivering  IT Operations (management of IT related incidents, problems, security, availability, reliability, and capacity).

Takeaway 3: We are nearly all consumers of cloud services, and yet we are still talking as if there is a choice as to the right way to go.

IT organisations must be able to make intelligent decisions about where and when to use private, public and hybrid cloud services.

Since the late 1990’s I have been using service such as Microsoft’s Hotmail and MSN Messenger. In all that time I have never had to worry about whether or not there is enough hardware, processing power, or memory for me to use these applications. Never have I had to speak to a helpdesk person to obtain a username and password, have these reset or recover lost data. In more than 12 years I have experience less outages of these services than you could count on one hand.

The technology that is used by Microsoft, Google, Yahoo, Youtube, Facebook, Amazon, and the myriad other companies that provide cloud services has been available to purchase for a decade. And yet… IT Directors are still debating the merits of cloud!

Guys and gals, the cloud is just familiar technology with a new name. With sound engineering and end-to-end planning backed up by a clear strategy and framework for delivering service cloud can be delivered by anyone to anyone, securely. If you can’t do it in house, and most IT departments simply can’t, give it to someone who can.

All the big outsourcing companies, the companies whose very existence depends on service, provide services using cloud technologies. Why? You figure it out.

Takeaway 4: IT is just a service. I don’t expect my Facilities Manager to manage electricity generation, I don’t expect my IT Director to run operational IT.

The headline tells the story, however running IT as a service takes a special set of skills. The skill to ensure that service levels meet the needs of the business. Not just today but tomorrow and into the future. The skills to ensure that information and technology are properly leveraged by the enterprise to improve the way that business is done, and the skill to identify trends and to forecast the opportunities and impacts in-time to effectively do something about them.

Sessions like that offered by EMC2 are valuable and gratefully received. They stimulate thoughts and ideas and give us all a chance to reflect on what should be.

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