Monday, 19 November 2012

Leadership .. and the rush to the cloud

Might seem strange to write a post about leadership, on a cloud computing blog; but think about it this way -- the 'Cloud' is all about leadership.  It's the bandwagon that you've got to get on, irrespective of where it's going.  It's the "common wisdom" where 'thought leaders' are too conscious of the opinions of others and began to emulate each other and conform rather than think differently (wiki link). 

The reason I think this is happening, is that the fundamentals of IT service delivery have't gone through a revolution in the last 5 years.  Sure, there have been leaps forward - notably in the smartphone and tablet markets, which have radically influenced accessibility and demand for services.  Over the last 5 years, we have also seen incremental advances in IT capacity, in networks (notably end-user bandwidth which has been driven by the increasing demand), and in compute and storage terms.  But the fundamentals of IT service delivery haven't changed.  If you had implemented ITIL 5 years ago, you would still have the same frame of reference today and it would serve you well. 

The difference is perception, and the advances of running IT like a business.  Yet, this was one of the main strategies before the cloud came along.  The reality is that business caught up with IT, and debunked the myths of risk-averse culture that became prevalent in many large enterprises.  The business started to demand quality of service, and began to put a focus on costs.  Just like an enterprise would manage costs in any other part of it's business, IT soon found that they were under similar cost pressures - and these became accelerated as the global downturn impacted profit margins.

What's really interesting though is the way that certain business models have begun to prosper in this new dynamic.  Those are models that allow businesses to move away from large sunk capital investments, and towards a flexible model that allows them to account for their costs as a percentage of their revenue stream.  There clearly is a great deal to be gained in accounting transparency here, but there's more - these flexible arrangements allow businessses to scale their cost base according to their overriding dynamic.  On the face of it, it's a low-risk engagement for the customer.

But here comes the rub.  As any risk analyst will tell you, it's the weakest link in the chain that tells you where your true risk really lies; and of course there are a number of risks associated with moving to this flexible arrangement that could scupper the whole deal.  For several years, the security risks of losing personal data were often quoted as a show-stopper.  More reputable companies offering their services have mitigated those risks -- for now at least.  There are a certain number of regulatory factors to take into account, not least the actual jurisdiction of the data stores.  Balancing these competing risk factors is the business of IT leaders.

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