Hewlett-Packard has become the latest vendor of many to sound
the death knell on the IT department. An imminent - and presumably
universal - move to cloud computing, it proclaims happily, will
inevitably lead to the termination of rafts of technical IT jobs as
the automators become the automated.
So what is going on here? Is this just the usual hyberbole from
suppliers keeping their eye firmly to the main chance? Or is there
some truth in the notion that cloud computing is likely to have a
disruptive and even revolutionary effect on the structure of the IT
department itself?
Before answering such questions, however, it would appear
important to define what this most bastardised and over-exploited
of marketing terms actually means. Gartner's definition is that
cloud comprises "a style of computing where massively scaleable
IT-enabled capabilities are delivered as services to external
customers using internet technology".
This means that, despite the fact that software-as-a-service
(Saas) is one of cloud's most widely recognised forms, it is
strictly speaking a subset of the classification because not all
offerings on the market today are massively scaleable.
Tom Austin, head of software research at Gartner, explains:
"It's about exploiting the scaleability available in the cloud
environment - that is one issue. But another is that it is a new
class of outsourcing that exploits hundreds of thousands of CPUs as
a single compute engine, at a cost per CPU and per CPU cycle that
is dramatically lower than you could ever do internally."
As a result, he adds, cloud computing is to compute cycles and
services what Raid was to disc storage. "Raid was originally
developed by IBM to improve the performance of best in class discs.
But by the late 1980s, people realised that they could take low
reliability and low performance discs, apply Raid and create highly
reliable and dirt-cheap discs. So there's a metaphor," says
Austin.
Another benefit of cloud computing is that it dismantles the
traditional relationship between physical devices and content. And
this concept will become increasingly important over the next few
years as organisations find their customer-facing - and even
internal - websites and systems need to support more and more forms
of mobile technology, an activity that is expensive and complex to
manage.
"It is no longer about the software licences you buy to run on a
particular device. It is about services. It does not mean the
device is unimportant, but it does mean cloud should support you
working independently of the device while exploiting its
capabilities," Austin says.
Key areas in which uptake is already taking place, meanwhile,
include e-mail, content archiving and SaaS, although according to
Jonathan Yarmis, vice-president of disruptive technology at AMR
Research, most deployments are departmental in nature or consist of
limited trials.
Nonetheless, he believes some services offering mainly commodity
application access and cheap storage capabilities will move into
the mainstream quite quickly.
Take-up momentum
"Consumer adoption will naturally be faster than enterprises or
small-to-medium businesses, but if you look out five years and ask
how many large companies will use some type of cloud-based service
to deliver certain content solutions to certain constituencies, I
think it will be the vast majority," Yarmis says.
Austin agrees. He indicates that uptake is now moving into the
"early majority" stage and by 2013, he expects "the wave will
really accelerate dramatically".
In the SME space at least, such adoption is likely to be helped
by initiatives such as Microsoft's Live Mesh, which will help
reduce the fear factor and demonstrate some of the benefits. Live
Mesh enables users to synchronise back-end files, folders and
web-delivered content such as news feeds across multiple local
devices whether they are on- or offline.
Dale Vile, managing director at research firm Freeform Dynamics,
explains: "Microsoft will help give cloud computing some
credibility and acceptance. Many smaller businesses are afraid of
cloud because they fear putting all of their eggs in one basket.
But Microsoft is saying, 'you can still access stuff locally if you
like but you can also do it from the cloud too', so it becomes
fairly non-threatening and more about value-add."
As to how significant cloud computing is likely to become,
Austin believes it is "probably the single biggest magnitude wave
of change that we've ever seen", although he does point out that
this is "a personal rather than a Gartner statement".
"IT management that ignores the opportunities and benefits is
making a fatal mistake, because it will decrease their competitive
advantage. It will be a career mistake too because rivals will
exploit the productivity and economic cost advantages associated
with cloud. So you can't ignore it, but also don't fall in love
with it because, like everything, it has its place," he says.
Austin compares the situation to the PC Lan revolution of the
1990s when pundits were widely proclaiming the death of the
mainframe.
"But they had a fundamental misunderstanding of how business,
technology and economics work and anyone saying that cloud is going
to kill the IT department is engaging in the same logical errors,"
he says.
This means most activities IT departments undertake today will
still be their responsibility in five to 10 years' time, with cloud
computing acting as a complement to on-premises systems rather than
a replacement.
Yarmis agrees that "not everything is going to move to cloud".
Instead he believes the key challenge for IT organisations will be
to understand these emerging services, how they can best exploit
them and what job roles will be needed to do so.
Change in the IT department
"They'll be challenged to redefine the value proposition or
realise it no longer makes sense to do low-value things," he says.
"But most people in IT departments don't sit around doing nothing
all day. They're overwhelmed with work and the challenge is always
to find enough time to do the things that are important to the
business."
It is this impetus that has helped to drive the rise in
outsourcing over the past few years, but that has not succeeded in
killing the IT department either, no matter what the doom-mongers
predict. "If you're doing low-level management tasks, you might
find your job is subsumed, but you'll still be able to move
somewhere else and work for a vendor because they have massive data
centres," Yarmis says.
But any move to cloud is likely to have ramifications for IT
directors in that it will be increasingly necessary to assume the
role of (internal and external) service orchestrator rather than
gatekeeper.
"If you know your own requirements and what you're trying to
achieve, you'll be more comfortable in using the best means of
doing that because you'll know the risks and you'll be able to ask
the right questions," says Vile. "My advice is to look at what this
translates into in terms of business models, architectures and the
like and see how and what applies to you."
Nevertheless, he warns that one of the reasons that cloud will
fail to take over the world is because of vital cultural and trust
issues, with many company executives, auditors, and indeed
regulators in some instances, remaining uncomfortable with storing
sensitive business data outside of the corporate firewall.
For the time being at least, another inhibitor is the current
patchwork of service providers, comprising large numbers of mainly
small players or large providers with specialised offerings, all
trying to get a slice of the pie.
"For users looking at this stuff today, the last thing they want
to deal with is hundreds of vendors providing a small portion of
cloud, each using different back-end databases and them having to
integrate it all. They want one head on a plate," Yarmis says.
Although consolidation will inevitably take place over time,
leading to the emergence of a few large players, another likely
phenomenon is that the big systems integrators such as IBM will
start acting as service aggregators.
A third break on adoption in the SaaS domain, however, is the
lack of customisation available for key business applications. This
is because the economy of scale argument, which enables vendors to
provide services cost-effectively, is based on a one-to-many
service delivery model, which relies on vanilla packages - and this
situation is unlikely to change any time soon.
Disaster recovery
One organisation that was not put off by such arguments,
however, was the Erith Group, which specialises in demolition,
asbestos removal, remediation, waste recycling and haulage for the
construction industry.
IT manager Paul Driscoll is an advocate of the cloud approach
because of the administration and management time it frees up for
an IT department that comprises two staff catering to the needs of
230 personnel, many of whom work remotely and use a range of mobile
devices.
As a result, Erith began trialling Google Apps Premier Edition,
which comprises e-mail, calendar, word processing, instant
messaging and voice-over-IP support, in 2006. The pilot initially
comprised 12 tech-savvy staff and managers, before being rolled out
to about half the company.
In September of the same year, however, the organisation
suffered a catastrophic fire when oxyacetylene tanks that were
being stored in a neighbouring building caught fire and launched
themselves into the company boardroom in the middle of the day.
"Fortunately no one was hurt and all our mission-critical stuff
was backed up elsewhere, but once we'd physically and
metaphorically washed our hands and faces, we found that half of
the staff could work in the same way and half found it more
difficult despite all of our disaster recovery planning," Driscoll
says.
As a result, he was immediately given the go-ahead to roll out
the service to the rest of the company. This, he believes, has
saved Erith about £38,000 over three years in terms of upgrading
and maintaining on premise systems, "which is a no-brainer in a
company of this size". The new service costs the firm £25 per
account per year.
Although Erith still runs local Microsoft Office applications on
its PCs because of the limitations of the word processing and
presentation applications available as a service, staff do use such
offerings for collaboration purposes and in emergency situations
such as forgetting their laptops.
But Driscoll indicates that, over time, he would be happy to
consider adopting the cloud model for more business-critical
applications. "The problem is now that unless you pay a huge amount
for a fibre link or SDSL, it's not worth doing it because of the
cost of getting a big enough pipe," he says. "If one of the
operators could provide me those options at a reasonable price, I'd
consider it, but currently the return on investment goes off the
scale and it's not worth it."
Cultural change
Nonetheless, Driscoll warns that the most difficult element of
such an implementation is "changing perspectives". This is a
process, he says, that was helped by staff training and selling
people the benefits.
"It was about getting people on side and showing the board the
savings that could be made and because they backed me it wasn't so
much of an issue. A lot of people are worried by change and don't
like it but my view is, what's the point in reinventing the wheel?"
he concludes.