IT Disintermediation and The Cloud

On a fairly regular basis I get into a discussion with people that starts something like this:

Hey John, with the cloud is IT even necessary anymore?  I mean, if I can buy computing and storage at Amazon and they manage it, what will happen to all of those IT guys we’re paying?  Do we just get rid of them?

Well, no, not exactly.  But their jobs are changing in fairly meaningful ways and that will only accelerate as cloud computing penetrates deeper and deeper into the enterprise.

It’s no big news that most new technologies enter the enterprise at the department or user level and not through IT.  This is natural given the disincentive for risk taking by IT managers.  As a rule, new things tend to fail more often (and often more spectacularly) than the mature stuff that’s been hanging around the shop.  And this is not good for IT careers (CIO does often stand for “career is over” afterall). 

This departmental effect happened with mini computers, workstations, and eventually PCs.  Sybase and Sun got into Wall Street firms through the trading desk after Black Monday (Oct. 19, 1987) because older position-keeping systems could not keep up with the volume (effectively shutting down most trading floors).   IT does not lead technology revolutions.  Often times IT works to hinder the adoption of shiny new objects.  But there are good reasons for that…

For many years, these incursions were still traditional on-premise systems.  In most cases, over time, IT eventually found a way to assert control over these rogue technologies and install the governance processes and stability of operations that users and executive management expected.

More recently, in the SaaS era,’s success hinged on getting sales reps to adopt outside of the official SFA procurement process supported by IT.  Marketing apps often come in through the marketing department with no IT foreknowledge, but then are partly turned over to IT when integrating them with existing systems proves to be no simple matter.  I say partly because the physical servers and software running SaaS apps never gets into IT’s sphere of control.  Often, the level of control turns into one of customization, oversight, monitoring, and involvement in the procurement process.

Like it or not, in a SaaS world, a fair bit of the traditional work of IT is forever more disintermediated.  But how about in the IaaS world??

As we move to IaaS, the level of disintermediation actually diminishes – a lot.  Most people assume the opposite without stopping to think about it.  

As shown above, however, in the IaaS world IT has a HUGE role to play in managing everything above the hypervisor.  Vendor management, ITSM, monitoring, configuration, service catalogs, deployment management, automation, and many more core IT concepts are still very much alive and well – thank you!  The only difference is that IT gets out of the real estate, cabling, power, and racking business – and most would agree that is a good thing. 

What else changes?

First off, the business process around provisioning needs to change.  If I can get a virtual machine at Rackspace in 5 minutes, don’t impose a lot of overhead on the process and turn that into 5 days (or more!) like it is in-house at many enterprises.  But do keep track of what I’m doing, who has access, what my rights and roles are, and ensure that production applications are deployed on a stack that is patched, plugged and safe from viruses, bots and rootkits. 

Second, IT needs to go from being the gatekeeper, to the gateway of the cloud.  Open the gates, tear down the walls, but keep me safe and we’ll get along nicely (thank you).  IT will need to use new tools, like newScale, enStratus, RightScale, Ping Identity and more to manage this new world.  And, IT will need to rethink their reliance on decades-old IT automation tools from BMC, HP, IBM and others. 

Lastly, the cloud enables a huge explosion in new technologies and business models that are just now starting to emerge.  The MapReduce framework has been used very successfully for a variety of distributed analytics workloads on very large data sets, and is now being used to provide sentiment analysis in real-time to traders on Wall Street.  Scale out containers like GigaSpaces enable performance and cost gains over traditional scale-up environments.  And there are many more.  IT needs to develop a broad knowledge of the emerging cloud market and help their partners on the business side leverage these for competitive advantage. 

If there’s one thing that the cloud can change about IT, it’s to increase the strategic contribution of technology to the business.

3 thoughts on “IT Disintermediation and The Cloud

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  1. We are an EDI virtual network, or an IAAS for VAN services. We have an API, 90 functions, and you are your own network. I wrote an article about how the expense of running in house AS2 or FTP clusters are power and labor intensive, the hub manager has to service user support requests, etc. How arcane! Boy did I get a an angry response from the people who run those systems. They have a lot riding on keeping in house As2 Hubs running for their job security. I feel for them. Their employers are in the business of servicing a supply chain, logistics, etc. They didn't like VAN options, so they went P2P or Hub to spoke with As2 (a burden on the trading parters), and the dead end connections that go nowhere but to the hub,Maybe they aere burned by a old school VAN, maybe this, maybe that. They had an IT dept that was all too glad to operate a small AS2 server, then they got a rack, a blade center, a power bill for yikes too much. They got complaints from trading partners that they just can't keep making them hook up over and over, “its not just you, its everyone we have to maintain certs with!”Along comes ECGridOS and a few function calls, and the ire is palpable from the inside IT and EDI comms engineers. I am sorry guys, the cloud is here, there are other jobs that are even better, more valuable to your employer's true mission – there is more to life than running a mini-hub in your closet.Be your own EDI network with ECGridOS

  2. the power of the cloud has really made getting a high powered server all the more important, they are being depended on more and more each day. Things such as the proper server cabinets can really make the difference

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