An Application’s Journey to the Cloud - Part One
In this first blog in the series – An Application’s Journey to the Cloud – we’ll take a look at how the cloud might fit into enterprises. Future posts will explore cloud computing solutions and their perceived benefits, the types of cloud configurations, their benefits and usage models, and the types of applications that might be appropriate for the cloud.
Despite the best efforts of IT, optimal alignment between business process and technology faces many hurdles. According a survey conducted by the Economist Intelligence Unit, merely 30% of enterprise architects believe that their technology infrastructures have the ability to meet most of the demands—existing and future—of their respective businesses.
Likewise, it’s now common to have several departments and business units within a company that view IT as an obstacle rather than an enabler. This situation describes many use cases for Amazon EC2. Gartner suggests that there are thousands of instances of compute and applications that are running on EC2 without the knowledge or authorization of IT departments (also called Shadow IT). If IT isn’t enabling the business, the business will do an end-run around IT to fulfill its requirements.
To begin addressing these issues, it helps to define three basic types of IT organizations:
- The Cost Center: IT as a cost center represents 40% of companies. They’re becoming obsolete as they struggle to optimize their physical assets, skill sets, and internal processes with their limited resources. These IT organizations tend to exist in low-margin and/or commodity-type businesses.
- The Service Provider: IT as a service provider represents another 40% of companies. They look to perform more services for the company and maximize the services they provide, because they tend to be in industries that are process or service oriented. They’re challenges that they face are how to optimize the IT service outcomes, project and portfolio management, and internal business process outcomes.
- The Revenue Contributor: IT as a revenue contributor represents the remaining 20% of companies. These IT organizations strive for total operational flexibility and look to achieve competitive advantages. They also look for new market opportunities, while optimizing marketable innovation and intellectual property, external customer experiences, and external business processes.
Many IT organizations have evolved from cost center to the service provider model in the past few years, and the evolution from service provider to revenue contributor is a more recent and continuing development. In a few industries, such as financial services, the revenue contributor model has taken root more rapidly.
Ultimately, IT needs to focus more on becoming a service provider and becoming strategic to the business, and less on short-term tactical tasks such as cobbling together hardware and software in hopes that the solution will eventually work properly.
Next, we’ll discuss the current definition of cloud computing solutions and their perceived benefits.