Preface

What's Really New about the Cloud?

It seems to be a recurring phenomenon: I finish the manuscript for a book and I am ready to send it to my publisher. Then I find additional sources with fresh insights and great ideas. I call my editor, he growls at me, and we agree to extend the deadline so we can include the new material.

It happened with my first book, The Transformational CIO, and it happened with this book. Days before finalizing the manuscript, I was fortunate to secure interviews with three top thought leaders at IBM—Leslie Gordon, vice president, Office of the CIO, Application and Infrastructure Service Management; Jim Comfort, vice president, Integrated Delivery Platforms, Cloud Computing; and Lauren States, vice president, Enterprise Initiatives, Cloud Technology and Client Innovation, IBM Strategy.

Now my only problem was figuring out where to put their comments in the book. Fortunately, the solution to that problem became apparent almost immediately. The wisdom and insight that Leslie, Jim, and Lauren shared with me were so valuable that I knew they had to go right here, at the front of the book.

“Cloud puts power in the hands of the end user, and that can lead to a better financial equation for IT because of higher adoption rates and less under-utilization of resources. Cloud is changing the way we consume IT, and we're only at the beginning.”

My conversations with these brilliant people covered a wide range of topics, but the main question I put to each of them was this: What do you say to someone who tells you there's nothing new about the cloud?

Here's a summary of their responses:

Leslie Gordon

Internally, we leverage cloud as an extension of existing strategy. From a technology perspective, it's not dramatically new. It's grounded in a lot of the same technologies that we already use. I see cloud as a natural turn of the crank. It's another abstraction of IT services, the next generation following virtualization and optimization of the infrastructure.

The cloud is not a one-size-fits-all solution, and it is not a panacea. You have to ask yourself, “Where does this approach fit in my organization? Where will it help me extend my strategy?” When you look at cloud from this perspective, it represents both an opportunity and a challenge.

One of the opportunities we identified early on was development and testing. We intentionally began in a low-risk area so we could really explore the potential of this new approach. It's proven to be a strong success. Now our developers can create and access test environments on demand, whenever they're ready, and wherever they are in the world—without engaging the test-build organization. We've taken the middleman out of the equation and enabled our developers to become more agile and productive.

We've also received tremendous positive feedback from our developers, and they've driven very high adoption of this new approach. The flexibility, speed, and freedom to do what they want really appeals to them.

We've also identified business analytics and storage virtualization as prime opportunities for using cloud, and we see strong potential in both areas. We've already used cloud to provide common BI services that can be applied to a large set of data warehouses. Taking that step has enabled us to analyze information more effectively, which is very valuable from a business perspective.

What's cool about cloud isn't the technology. What's really cool about cloud is how it changes the way people consume IT. Cloud puts power in the hands of the end user, and that can lead to a better financial equation for IT because of higher adoption rates and less underutilization of resources. Cloud is changing the way we consume IT, and we're only at the beginning.

Jim Comfort

The genuinely transformational aspect of the cloud is on the user side . . . the people who use IT. The cloud is about enabling developers to become five times more productive. It's about responding to market demand in hours or minutes, and not days, weeks, or months.

It's difficult for most CIOs to quantify those kinds of benefits. Most CIOs are great at quantifying what's going on in the IT shop. And that is the conundrum. The discussion rapidly becomes a very detailed conversation about nuts and bolts, speeds and feeds. CIOs are comfortable having these conversations. But when you talk about the cloud at that level, it's hard to see its value.

The fundamental abstraction of cloud is separating what from how. Separating what the user is trying to accomplish from how the underlying technology works.

Once you've made that separation, you can focus on the user. You can start asking, “What is the user's role? What is this user trying to do? What can we do in IT to make this user more productive?”

You aren't giving users infinite choice, you're giving users a range of choices that will help them become more productive. That's how you leverage cloud on the user side, by increasing labor productivity.

On the IT side, you leverage cloud by reducing costs and complexity. You build a service catalog that is efficiently constrained, standardized, and automated. Users get a range of choice that helps them become more productive, and IT gets lower costs and less complexity.

Now you are bridging two worlds, you are connecting IT and the business in a way that makes sense to both sides of the equation. That is the CIO's role during this transformational period: building bridges between IT and the other parts of the company. The cloud can help you build those bridges, which are essential to the company's long-term health.

“The fundamental abstraction of cloud is separating what from how. Separating what the user is trying to accomplish from how the underlying technology works.”

Lauren States

I think the prime focus should be on new business opportunities where the flexibility and speed-to-market advantages of the cloud delivery model can really bring value to the company.

We can argue about the technology itself all day long. Most of it is evolutionary. But I've seen it mature to the point where we can do things with it that we couldn't do before.

Virtualization is not an enabler for the business. The cloud, on the other hand, enables new business models. That's a big difference. It's not the technology that's revolutionary—what's revolutionary are the new ways we can apply the technology.

Where do you begin? Start by looking at your business processes, applications and workloads. Find out where it makes sense to move services into the cloud. And of course, you've got to consider data privacy, security, regulations, compliance, standards, tolerance for risk, governance, and all those requirements that are specific to your organization.

You'll have to negotiate with the cloud provider to make sure you get the service level agreements (SLAs) you'll need to deliver secure and reliable services to your end users, whether they are internal or external customers.

Some of the organizations we work with are moving into the cloud because of the economic benefits it can deliver in terms of reduced costs and added capabilities. Others see the cloud as a way to create new business services they can take to market and monetize. Those companies are saying, “With cloud, we can leverage our infrastructure and our technology to provide services to new customers and new markets.”

In either case, you will need a new mix of skill sets in IT. Which skills will be important? Architecture, contract negotiation, governance, customer service, to name a few.

I recently saw a tweet listing the five stages of cloud adoption: denial, anger, bargaining, depression, and acceptance. I have it posted on my wall. It's funny, but it also reminds me that different people view the cloud differently. Most people are still in the earliest stages of adoption, and that's something you have to accept.

Personally, what I like best about the cloud is that I can carry it around in my handbag. The cloud delivers banking, shopping, reading, playing games, managing credit cards, talking to my family, communicating with work, building my professional network—all through mobile devices and all without me having to understand the many technologies behind it. That's really exciting.

I think this is driving toward a tipping point in IT, to a place where we can be much more productive and more flexible than ever before. I think this will be bigger than the transition from mainframes to client-servers, because this will enable us to do more—as companies, as consumers, and as a culture. For IT professionals, this opens up the possibilities of creating whole new sets of applications that are more collaborative, more data-intensive, more available, more networked, and much easier to use. Today, we're getting a glimpse of the future. We don't know how the story ends, but it's very exciting.

“Personally, what I like best about the cloud is that I can carry it around in my handbag. The cloud delivers banking, shopping, reading, playing games, managing credit cards, talking to my family, communicating with work, building my professional network—all through mobile devices and all without me having to understand the many technologies behind it.”

After my conversations with Leslie, Jim, and Lauren, I came away with a much stronger belief that the cloud is revolutionary in a business sense. The cloud will enable a new generation of business models—that seems perfectly clear. The fact that cloud computing is merely “evolutionary” from a pure technology perspective does not diminish its overall impact or lessen its potential as a transformational force. At the very least, it is another arrow in the CIO's quiver.

I was also deeply impressed by their shared insight about the cloud's impact on the role of the CIO. At minimum, the cloud's presence will require CIOs to develop new skill sets, whether or not they actually use cloud-based services. CIOs who do not acquire these new skills will likely find themselves at a competitive disadvantage as cloud services become more the new norm.

Leslie, Jim, and Lauren also mentioned a possibility that I hadn't previously considered, namely, the potential of cloud computing to serve as a template for managing an increasingly virtualized portfolio of IT capabilities. In other words, the cloud can become the model for the next generation of IT management. That, from my perspective, certainly makes the cloud worthy of deeper exploration.

As most of you already know, IBM is a major participant in the emerging cloud economy. IBM has publicly stated that the cloud is one of four key growth initiatives in its 2015 Roadmap. So far, the cloud has surpassed the company's expectations as a revenue engine. The company expects the cloud to play an important role in achieving its 2015 operating earnings per share (EPS) target of $20.

IBM's confidence in the ability of the cloud to deliver significant revenue isn't based on wishful thinking—as a cloud user, the company genuinely understands the value and the potential of the cloud as a fundamentally new model for enabling business transformation in rapidly changing markets.

In summary, what's new about the cloud isn't how it works, but what it enables us to achieve.