IT Managers and CIO's need to remember that there is no 'magic' in the cloud as such, the cloud in reality is the evolution of infrastructure, platforms and software which can now be reliably delivered in a flexible, scalable way using a combination of hardware virtualisation technologies, software as a service and the Internet as the underlying enabler.
At the 'other end' of the cloud are real companies and people, with infrastructure and intellectual property investments who are seeking to offer differentiated services to their customers in new, innovative ways. The challenge for the CIO is to identify those service providers that will add business value, either through substantial cost reductions in IT infrastructure, or in value added services relevant to the company's industry and business model.
The first opportunity is cost reduction which will be readily achieved by companies like the large telecommunications providers, which can leverage off existing infrastructure investments and combine this with commoditised computing resources, dramatically reducing the underlying cost of computing. These commodity services will compete, as always, on price and service level. This is familiar ground for the CIO.
The second opportunity, value added services, is more difficult. While there are many "apps" already in the cloud, most of these are hardly enterprise ready, and on inspection have only superficial capabilities. Many of the established specialised software vendors are still one step back from migrating deep application capabilities into the cloud. In time this will happen, but until then there will be a level of risk when selecting vendors based on their 'cloud credentials'. For many, this risk is still too high.
There are many opportunities for IT service providers to re-position their value propositions to take into consideration these developments. Value adding services that can be provided by local providers to assist companies realise cloud value include consulting, system integration, service aggregation, service level management, end user training, business improvement projects and so on.
My advice to CIO's is to see cloud as an evolution of the outsourcing model. The key is to build strategic relationships proactively with those established specialised service providers who are well positioned to ensure that these disruptive technologies ultimately enhance your business.
The Adapt IT group has 250 staff throughout SA, with several abroad and conducts business through three subsidiaries: Adapt IT Solutions, ITS Holdings and Apply IT. Adapt IT has customers across SA, Sub-Saharan Africa, Australasia, USA and Europe. Its subsidiary companies provide a range of specialised IT solutions and services to customers in a number of sectors, including manufacturing, mining, education, financial services and the public sector.
For more information go to www.adaptit.co.za.
