Sina Moatamed has written a series of provocative posts on the cloudy enterprise, most recently The Office of the Cloud CIO. Sina speaks in tech language that sees around a few corners. But what about the day-to-day predicaments of IT executives? And how does his visionary take clash with the real word uncertainties provoked by PRISM? There was only one way to find out.
Jon: The ‘office of the Cloud CIO’ sounds forward-thinking. But what’s really happening on the ground?
Sina: It’s two different realities right now. One is the business user reality in terms of its relationship with IT, and then there’s sort of the enterprise IT organization relationship with itself and the services that it’s delivering back to the business. There’s been a clear fracture in the large enterprise, where history has always dictated that if you need IT services, you come to the IT organization. The discipline came out of a budgetary constraint, because of the IT department’s own large capital funds.
Jon: So the classic model is: we’ve got to pool our resources and manage our approvals so we can get to work?
Sina: Yes, and because of that, the entire relationship of IT to the business has been around long, drawn out investment cycles. You have to build staff, you have to support that infrastructure, you have to continue to maintain it. The business user would say, ‘Well, here’s my request.’ Then a governance body would make the approval against their capital budget. At that point, you’d be caller number 26 – take a number.
Jon: Are you saying that’s broken now?
Sina: Oh, it’s completely done. That ship has sailed. But the challenge is we’re still in the middle of major life cycle investments. Let’s say our business is running Siebel for CRM. Now your sales and marketing folks say, ‘You know what? I’m out in the field all the time. I need mobility – I want to be able to work off my iPad. I don’t want to be VPNing back into infrastructure. I need versatility, and Salesforce looks really good.’ Here’s the shift: I only need operating expense budget to in order to get it. There’s no big capital investment. That was the pin drop on the ground that created waves of disruption.
Jon: So what happens next?
Sina: The business user is now in charge, especially where cloud SaaS services are, and their needs are getting fulfilled very quickly. That agility is what people are looking for from the business side. The IT department is struggling to find its footing of relevance in this new world. Now, if you’re in a business that has a lot of compliance issues, then you can point a finger as to what the value proposition is for an IT department. But if that doesn’t apply, then what are you bringing to the table? That really become the crisis of identity that the typical IT department is going through right now.
Jon: So if these changes are inevitable, why is there so much resistance from IT?
Sina: If the business user is now in charge of their own destiny, it’s better that you don’t fight that reality. It’s better that you embrace it and find a way to deliver secure services in that model. That, I think, is one critical piece. Then the other tidal wave that came along was the global financial crisis. This is putting tremendous pressure on IT departments to reduce their costs.
For companies surviving in this marketplace, it’s obviously about generating revenue, and that’s around your business opportunities. That’s one aspect of IT strategy fulfillment, but the other is about how you become operationally efficient. For 20 years, people have learned to plan, build, run, and execute projects, and now you’re changing the entire operating model of IT overnight. That’s the problem.
Jon: Is this where the ‘office of the cloud cio’ comes in? And what the heck is it?
Sina: Yes. The idea is that we’re shifting away from ‘plan/build/run,’ and we’re moving to demand and supply. Look at Amazon.com, and imagine that all Amazon sold was IT services. I guess it’s not that big of a reach, considering AWS and so on, but the idea is to imagine that you go to an e-commerce store, as a business user, and you’re making requests for services for yourself. Well, imagine that you’re an application or service owner or somebody who’s doing development work, and you also can go into a commerce engine and order your environment based on a standardized, approved architecture, and have it delivered within hours.
Jon: So you’re saying, think like a storefront that the business users would go into. You essentially order up services from your own IT department.
Sina: That’s exactly right. In the same way that if I was a manufacturer of a product like a toaster, there’s a BOM structure to that. You’re creating a blueprint of that before you build it. The same applies here.
Jon: That’s a little bit different than how IT departments are functioning today.
Sina: Oh, absolutely.
Jon: Now that you’ve charted that course, I go back to today’s overworked, financially challenged CIO. I imagine them listening to this conversation and getting a little bit frustrated because they’re saying, ‘OK, that all makes sense in a Disneyland kind-of-way, but I’ve got these organizational realities that I’m dealing with. I have my own political issues to deal with. How do I take meaningful next steps towards this?’
Sina: It’s going to vary by culture and company. You have to make a choice to either plunge in and educate your entire IT organization about how you’re going to shift into this model and make an enterprise-wide initiative out of it, or you bring it in in slow paces, and you find your greatest pain points and you try to bring automation just around those pieces. Little by little, you can find your way there. It completely depends on the appetite of the CIO and the organization, and how much pain they have.
There’s a lot of mentoring that goes along with making that transition be successful. You need to do a check on the state of your union from a cost perspective. Where is your spend? Then you’ll ask, ‘OK, we’re spending all of this. Now who’s consuming it?’ That exact exercise will align with this notion of saying, ‘I’m going to sell business capabilities back to the business.’ Once you map it out, it becomes easy to see and you’re going to start thinking from the outside in as an IT organization.
I think that shift, from what was very inside-out, and going to outside-in, that’s the paradigm shift of the CIO. That’s the one. Those are the CIOs that are going to make it through this incredibly disruptive wave, versus the ones that will hang on for the next four or five years until the pain gets to be too much.
Jon: You’ve also said that adding IT layers on cloud services is a way to stay relevant and assert value. Tell us about that.
Sina: The idea of cloud brokerages has really taken off. It’s really about adding layers of value-add on top of the service. If the business goes out and buys a SaaS service, that’s great, but you haven’t remedied identity management. You haven’t remedied integration with other services. You haven’t remedied master data management. So IT should say to the business, ‘Hey, before you grab whatever SaaS service you’re looking to get, let me build all these things around it and then I’m going to serve it back to you in a more secure manner, in a way that you want to consume.’
Jon: Some have said that PRISM fears are a huge setback for cloud adoption. Your take?
Sina: I think that the concern PRISM has raised is going to serve as a tipping point for change in the market that economics and big data were going to force anyway. It will accelerate a change of cloud engagement. After hearing about PRISM, the enterprise can now lump hackers and governments together as risk variables to be considered when trusting their data to public cloud providers. The way I see it, the challenge is not for the enterprise consumer to solve, but for the SaaS providers to create additional delivery models.
Hybrid SaaS will become the resolution for enterprises who are concerned about hackers, and now governments. The idea is that SaaS service providers will move their workloads into a segmented enterprise private cloud. With this type of deployment, your contracts will place all data ownership and controls for access in the hands of the enterprise and the SaaS provider will manage the service but in your enterprise’s four walls.
Sure, there are trade-offs to this type of service delivery, but if data security is still your number one concern, this will allow enterprises to outsource function, but maintain data security. Where there is a will, there is a new market opportunity.
Sina is an IT executive, strategist and consultant who deploys cloud services to manage business and IT operations. An SAP Mentor, Sina has worked as the CIO of an SME running SAP’s Business ByDesign SaaS solution. More recently, he has consulted with large enterprises in the manufacturing and life sciences industries. He blogs regularly on cloud computing trends.
Photo Credit: Business Man Lifting a Cloud – © Andres Rodriguez – Fotolia.com
Disclosure: Jon has served as an SAP Mentor volunteer since 2008.