IT Embracing the Cloud as Best Way to Deliver Value to Enterprises

NEWS ANALYSIS: Speakers at Interop say enterprise IT execs are shedding their wariness about cloud computing as they realize it’s the best way to save money and deliver value.

LAS VEGAS—Cloud computing was once seen as an end run around the IT department, where any business manager with a credit card was a threat to the IT budget. No more—or at least no more as far as the attendees at this year’s Cloud Connect conference were concerned.

Cloud Connect, which is held in conjunction with the Interop Las Vegas show, was all about how to make cloud computing an integral part of a company’s IT strategy.

The change from technology outlier to integral operation makes sense. While price cutting and new services from providers such as Amazon Web Services and Google Compute Cloud get a lot of media attention, you would be hard pressed to find large enterprises abandoning their current infrastructure for total public cloud.

As Margaret Dawson, vice president of product marketing for Hewlett-Packard cloud services, told the audience the numbers of larger enterprises going totally to the public cloud is only in the range of 3 to 6 percent. The far greater percentage centers around companies developing hybrid cloud architectures. However, as Dawson noted, a hybrid cloud needs to represent a new entity with new capabilities rather than simply a combination of existing services.

A company’s embrace of the new entity represented by the cloud computing model should begin with new business capabilities that the cloud enables, according to keynote speaker Joe Weinman, author of Cloudonomics.

Weinman buoyed the primarily technology-oriented audience by dismissing those analysts questioning the value of IT departments and instead said, “IT actually turns out to be useful.” However, that usefulness is only realized when IT takes the lead in moving the technology projects from the mundane to the strategic—and in a reference to philosopher Søren Kierkegaard that is probably a first for Interop, even projects that involve into the development of society-improving existential applications.

While existentialism is probably a stretch when talking about cloud computing, Weinman did get the audience’s attention when he claimed that technology investments provide the greatest return for the business investment dollar. “An investment of $1 in IT returns $2 in revenues,” claimed Weinman.

The essential element that IT departments need to make themselves true cloud champions is to develop the internal skills for cloud operations and to emphasize the new capabilities that cloud adoption provides rather than try to simply focus on cost savings.

Scott Carlson, the Cloud Infrastructure Architect at PayPal, outlined how a broad adoption of the Open Stack internal cloud model has significantly cut down the time a developer needs to deploy PayPal–oriented services. One service mentioned by Carlson allows developers to deploy PayPal capabilities on a site within 15 minutes. Carlson said the Open Stack implementation including hardware, software and development platform was produced by staff of 18.

The embrace of the cloud doesn’t mean that all cloud concerns have been resolved. Mayuresh Shintre, the Cloud Platform Architect at Target, noted that in important areas such as security and compliance, “lots of providers are playing catch up.” The lack of overall system management umbrellas that can encompass legacy systems, internal cloud systems and public cloud operations was mentioned by several speakers and attendees as a persistent concern for enterprise cloud deployment.

Despite ongoing concerns, “the cloud is the wave of the future, all IT will be done this way," argued Bernard Golden, vice president of Enterprise Solutions at Dell. Golden went further to state that over the next two to five years, companies will be under increasing pressure to wind down legacy systems and replace those capabilities in the cloud.

Whether Golden’s predictions come to pass, it was clear at least from the speakers and those in attendance that the once leery attitude that IT had towards cloud services is evaporating as business managers realize that issues around privacy, security and compliance will always be best addressed by the IT departments. For IT, the realization is that rather than a new competitor for the IT budget, cloud computing can be a lever to reassert the importance of the IT department.

Eric Lundquist is a technology analyst at Ziff Brothers Investments, a private investment firm. Lundquist, who was editor-in-chief at eWEEK (previously PC WEEK) from 1996-2008 authored this article for eWEEK to share his thoughts on technology, products and services. No investment advice is offered in this article. All duties are disclaimed. Lundquist works separately for a private investment firm which may at any time invest in companies whose products are discussed in this article and no disclosure of securities transactions will be made.