Thank you for sharing your thoughts. I got everything you had explained clearly. Your expression: “The operating model and technology innovation of cloud computing represent a fundamentally new way of doing IT” strikes a great chord with my thinking.

The zero labor cost you cited means that application developers and project teams can request those environments on-demand through self-service and automation – without manual intervention – from their own internal IT department (i.e. the IT guys).

With a private cloud, those IT guys can spend time on more value-added activities (instead of shepherding a manual provisioning process). They may even use public cloud providers for additional capacity – as Michael points out, IT can be a general contractor to source the right services from the right provider, whether internal or external.

As for running ‘IT as a business’, the concept is not new. It refers to an IT department operating as a service business (i.e. an internal service provider within that retail or manufacturing company) instead of a cost center. The operating model and technology innovation of cloud computing represent a fundamentally new way of doing IT, and the means to help deliver on that vision.

The zero labor cost you cited means that application developers and project teams can request those environments on-demand through self-service and automation – without manual intervention – from their own internal IT department (i.e. the IT guys).

With a private cloud, those IT guys can spend time on more value-added activities (instead of shepherding a manual provisioning process). They may even use public cloud providers for additional capacity – as Michael points out, IT can be a general contractor to source the right services from the right provider, whether internal or external.

As for ‘IT as a Business’, the concept is not new. It refers to the vision of an IT department operating as a service business (i.e. an internal service provider within that retail or manufacturing company) instead of a cost center. The operating model and technology innovation of cloud computing represent a fundamentally new way of doing IT, and the means to help to deliver on that vision.

2010 was a big year for cloud computing. My company, newScale (where Michael is an advisor), saw explosive growth in private cloud and IaaS deployments for our software last year. It’s still early, but I agree with Michael – that momentum is accelerating and in 2011 we’ll really see things heat up.

Thank you for the article. The illustration show the exciting near term goals that show “zero labour cost”. I could understand that it means that when it is the functional heads or end users who themselves can develop and deploy applications using IT as infrastructure or service offerings from cloud companies such as Amazon, Google, or Zoho, there are going to be no labour cost as such, because you are not going to employ IT guys. Is my understanding correct? Secondly, what do you mean by IT as a business? When IT can always be a support for a retailer, a manufacturer, etc, how can it be a business. If time permits, you could respond.