Will The Cloud Drive The CIO To Extinction?

It’s a few years from now and the last known member of the species known as the CIO finally succumbs to “The Cloud”.

The breed appeared from nowhere about twenty years earlier, around the time of another cataclysmic global event called Y2K. It became dominant, in its own environment, and quickly adapted to mix with other species, especially those higher up the food chain.

Dinosaurs in the boardroom

And for a while it looked like the CIO swould thrive in the corporate boardroom, but very soon their ravenous appetite, and inability to contribute any lasting value, meant that they began to be regarded with suspicion by those around them.

Then a predator arrived which they simply could not cope with: The Cloud. They sought sanctuary in the land of Outsourcing, hoping the Outsourcers would protect them and help them demonstrate value, but this was a forlorn hope.

To try and stave off the threats, they used their powerbase, to block any attempt by lesser mortals to improve the way the business worked. After all who else but the CIO knew anything about IT? And along with the henchmen CSO, CTO, and Audit, every possible obstacle was set up to ensure that all power stayed within the IT department.

So finally they fell victim to The Cloud, and apart from a rare survivor in public sector organisations, the CIO ceased to exist,

Fact or Fiction?

Nicholas Carr in the excellent read, The Big Switch: Rewiring the World, from Edison to Google says we are in the middle of an epochal transformation: “What happened to the generation of power a century ago is now happening to the processing of information. Private computer systems, built and operated by individual companies, are being supplanted by services provided over a common grid—the Internet—by centralised data-processing plants. Computing is turning into a utility, and once again the economic equations that determine the way we work and live are being rewritten.”

I believe it is fair to say that corporate IT and outsourcing has failed to live up to its hype: “In the end, outsourcing was not really a new business model or approach – just a shift in how internal IT was delivered and paid for” as Charles Araujo says in The Quantum Age of IT.

Regardless of where you get your analytical data, the conclusions are horrendous. Capital expenditure on IT has risen in the past 50 years from less than three percent of corporate CAPEX, to over 50 percent in many organizations. And yet when you look at the return on investment, it is extremely difficult to find many organisations where the investment has provided a significant business advantage.

Compounding the problem has been the monotonous repetition of failed projects, budget overruns. A study by the Standish Group found that only nine percent of projects succeeded and only 16 percent were considered to have been a success; in other words completed on time and on budget. Compare that with a statistic that over 90 percent of projects had to be restarted, many of them several times.

A similar study by KPMG was even more pessimistic. Over three quarters of companies surveyed said that their projects substantially exceeded budget, in many case by over 50 percent. And what doesn’t help is the pervasive “lemming mentality” within IT. How many failed implementations of a technology are required before enough is enough? CIOs have a lot of interaction with each other, and you would think that a topic of conversation would be “what to avoid”. Or maybe not…

Certainly much of this can be put down to failures resulting from companies trying to gain a competitive advantage by adopting new technologies. One only has to follow the insanity of BYOD and mobile since the arrival of the tablet.

How many executives received an iPad for Christmas, and demanded to have their corporate email on the device? And why not, this was a seemingly reasonable expectation given that you could do everything else with the device.

This was followed by the knee-jerk reaction from IT to try and discover a method of doing this securely, and lo and behold, the next thing is an avalanche of projects to do with mobile device management (MDM). And today many of these projects have floundered, usually because IT have focused on finding Eldorado without really looking at the business objectives.

In other words you end up with BYOD in the organisation with pretty much every useful feature disabled because of a real or perceived security risk!! You may have right on your side, but it doesn’t carry much weight with the business.

The vultures are gathering

A day doesn’t go by without some new risk being identified in the world of IT, and it only takes a few weeks for technology vendors to claim to have solved the problem. But there have been so many false dawns, for BYOD, MDM, AV, APT; whatever the acronym, in many cases these solutions fail to deliver the lavish claims. And of course everything on offer is “Enterprise Ready”, but frequently the solutions offer little more than point solutions that end up costing three to four times as much to implement as the technology costs, and rarely delivering on the promises.

Today every CIO is on the back foot, and looking for help. And those offering a panacea are lined up at the door, whether they be vendors, consultants or analysts. But most of these people focus on IT , not on the business, and CIOs are being asked to provide business value from the same IT that all their business competitors have.

It’s an impossible task if they continue to try and protect the IT territory, and continue to follow outdated traditions.

Cloud: the Saviour or the Grim Reaper?

Ultimately it will depend on how CIOs responds. They ignore Cloud at their peril, and specific solutions that are not available as Software as a Service (SaaS) should be avoided. Customers don’t want the CIO to reinvent the wheel – they want him or her to provide the services they need.

So will the CIO survive The Cloud? That depends on whether they can evolve.

Calum MacLeod is EMEA vice president at Lieberman Software.

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