Nicholas Carr wrapped up the Wednesday afternoon session at the TechColumbus Tech Tomorrow Conference. Nicholas Carr writes about technology, culture, and economics. Nicholas authored The Big Switch (2008) and Does IT Matter? (2004). His writings – including columns for many periodicals such as The Wall Street Journal, The New York Times and The Financial Times – have challenged mainstream thinking. At the TechTomorrow Conference, he reflected on the impact – positive and negative – of technology on our businesses and in our lives, and will look to the possibilities of the future.
Nicholas indicated that we are on the precipice of a major disruptive change in technology. When the internet took hold it changed how people related to technology. Cloud computing will do the same. What does this mean for your organization? For your job? As you read this post – you may want to think about how this change could impact you in the next 5-10 years and for some people, much sooner.
Nicholas compared cloud computing to companies generating power in the late 1800’s and early 1900’s. Because centralized energy generation and transmission had not yet been developed, companies had to create their own. Once power companies were able to reliably generate power at a lower cost, companies “outsourced” their internal power production to the local power company. It is likely we will see a similar transition with cloud computing. I work with one IT company, Haladon Technologies, Inc., that advises their clients to move to the cloud rather than investing in the purchase of new servers. This means a monthly fee rather than large capital expenditure. This monthly fee also means the maintenance of the serves is done off site so the company not only saves in hardware cost but also labor costs. For many companies this is a significant cost. The early transition is often companies deciding to move to the cloud for additional hardware needs while maintaining their existing hardware in house so it can be a dual pronged approach. This makes sense on many levels because it allows the company to pilot the new approach and minimize risk.
What does this mean for the CIO?
- With much of the current technology maintenance activities shifted to the cloud, the CIO and IT staff will be focused on more strategic functions critical to business operations.
- The lines between IT and the business will blur as IT people become more focused on delivering business value.
- The IT jobs within companies will change – more business analysis and less system maintenance.
- Many jobs traditionally performed within companies will now be performed in “the cloud” and the staffing models will likely be different.
What does this mean for the business?
- Reduced IT cost due to inefficiencies of building a system to handle peak capacity and also fragmentation
- New opportunities to leverage IT in innovative ways to connect with customers (think mobile apps).
- Shift capital expenditure to build data centers from all businesses to “cloud” related businesses
- Higher data center efficiency based on centralized model
- Continued improvement of computing power (Moore’s law)
- Improvement in fiber-optic performance making it possible for high speed data transmission at reasonable cost
There are still issues to be addressed before many companies will feel comfortable putting secure data on an external server. The industry will need to address security and standards to mention a few. It sounds like while some cloud providers are consistently delivering high quality services safely and consistently, like Amazon, others are not. Just like with the electricity metaphor, the rate of adoption will track with the rate of progress within the providers of “cloud” services and also economic pressure.
There were five models for adoption – suggesting that this decision is far from an all or nothing proposition. Those options range from gradual adoption, using the cloud as a supplement to full transition. One of my clients built an internal cloud and immediately realized significant performance improvements. Additionally, they had a system outage and because of the architecture of this new system they were back up and performing 2 hours compared to 4 days for prior outages.
Continued dependence on sustaining technology will become a strategic disadvantage at some point in time!
So, if we are facing a disruptive change in how cloud computing impacts businesses and the work people do within companies then what should proactive IT leaders be doing?
- Look for gaps between what is happening now and the future goal and build bridges to close the gap in an orderly manner
- Play a “broker” role between the cloud and the business
- Understand new challenges and necessary skills. Build your skills and your organization.
- Understand how this transition can provide an advantage to your business and your customers and actively leverage the opportunity
- Stay positive and focused, any disruptive change can take a strong emotional toll on the people impacted.
- Communicate with the people who will be impacted and help them transition into appropriate roles to minimize the human cost. Do this early and often!
This change promises to have a significant impact on the landscape of IT, the role it plays in the business and how it is delivered. To learn more about the Central Ohio current skills gap and projected IT employment picture over the next five years, TechColumbus in Conjunction with Columbus State, Wright State and The Ohio Skills Bank released a report on the Skills Gap on Central Ohio IT Talent in October 2011. This report did take into account the impact of cloud computing on the workforce.
If you are an IT professional, how will these changes impact you personally? How do you want to participate in the change and how your role can help you succeed professionally?
To subscribe to this blog, please enter your email address in the box on the right side of this page.
Are you considering improving your ability to be an innovative leader? If so, take this free on-line Innovative Leadership assessment to determine where you fall on the innovative leadership scale. If you are looking for tools to help develop you ability to be an innovative leader, check out the Innovative Leadership Fieldbook. Metcalf & Associates offers assessments, coaching and workshops to help you and your leadership team become more innovative.