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Gartner to IT: Get a grip on cloud services, or else

A new list of cloud computing trends shows just how nervous the growing use of cloud services makes IT departments.

It’s easy to see why. IT staffs used to hold the keys to the kingdom — controlling what applications and data ran where and on what devices. That’s all changed — a lot — with the consumerization of IT and the advent of compute power that in-house developers can spin up on Amazon Web Services (s amzn) and pay for out of petty cash — without IT approval. Ditto the departmental use of easy-to-expense software-as-a-service applications. All of that erodes the power of IT folks.

Gartner(s IT), the big researcher, says it’s high time for IT to grab the bull by the horns, according to a list of 5 cloud computing trends released Monday.

For one thing,  Gartner sees a growing need for what it calls cloud services brokerages (CSBs) — a new breed of middlemen that sit between the corporate users of cloud computing services and the cloud vendors themselves.  These brokers would vet and/or approve cloud services before they get deployed.

According to Gartner:

Gartner believes that IT departments should explore how they can position themselves as CSBs to the enterprise by establishing a purchasing process that accommodates cloud adoption and encourages business unit to come to the IT organization for advice and support. The enterprise CSB approach can be implemented by modifying existing processes ad tools such as internal portals and service catalogs.

Forward-looking IT departments are already positioning themselves as facilitators of new-and-improved services to their end-user business units. (For more on this, see GigaOM Pro–subscription required.)  For IT to retain its grip, it has to be seen as a solution provider, not a department whose default position is to shoot down requested services.

Companies also need to establish “formal decision frameworks” to make the best possible cloud decisions, Gartner said.

While cloud computing’s ability to shift IT spending from capital expenditure to the more palatable operational expenditure, it should also be used to raise the lowest common denominator of IT services. IT resources should be used for “higher-value-added” activities for the business and to support innovation — not just to keep servers running and the lights on. Global systems integrators are also positioning themselves to take on this role.

IT departments are clearly on notice here. Recent Microsoft-funded research by IDC showed that the use of cloud computing will result in millions of new jobs in the next five years. That’s the good news. The bad news for IT is that whatever job growth there is will not come in IT. The automation that cloud computing provides will take on more of what traditional IT departments have done in the past so smart IT people need to get better acquainted with the services they can provide to their in-house end users, aka customers.

Photo courtesy of Flickr user Maurizio Zanetti

36 Responses to “Gartner to IT: Get a grip on cloud services, or else”

  1. Robert Ludwig

    How many sites were affected by the AWS blackout? When the cloud has a problem all IT people can do is shrug or yell in the telephone. It’s a particularly helpless position to be in.

    Personally I think the cloud is a solution in search of a problem. Does anyone remember distributed computing?

  2. Mark Smith

    Cloud services are not good for sensitive information. It makes theft easier by employees, and advertises itself as a gold mine for hackers. Not to mention that certain supposedly democratic governemnets around the world think its ok to take down entire cloud services or access information without due process.

    And what if the cloud service is taken down? Can you run your business without cloud computing for a day, week, month? what is the backup plan when all your cloud data is gone and stolen?

    Cloud computing is about as secure and reliable as banking services in India. Cloud computing as it stands today is a step backwards – just like Indian call centres – the difference is banks have enough clout to screw customers over to save a buck, small business do not, so cloud computing is not good for most businesses IMO.

  3. Why is operational expenditure more “palatable” than capital expenditure? This question goes back to: Is it better to lease or buy? Another old question: It’s is 11 o’clock do you know where your data is? Third, when you centralize you stifle diversity and innovation. You think IT is boring now? Wait until all of it goes to Cloud and becomes utility. Oh speaking of utility, what happens when you have a data/information outage — not just for one business but for 100 out of Fortune-500 all at once? Is government also thinking about Cloud? A cloud here and there is OK, but too much cloud not good. I say keep that SUN…

    • yes, companies have to really assess their workloads and type of workload. For Spiky workloads–uneven demand for compute — might make sense to put the spike in the cloud — provisioning our it for the Black Monday spike goes to aws or rackspace, but internal IT handles the daily load.

  4. Roagie

    I don’t want to be the boogie man here, but I had to rebuff my CEO’s recent love affair with the cloud so I thought I’d share my story.

    I got a memo the other day that my department was to put together a cost benefit analysis for a move to cloud computing. In this memo were all the buzzwords that has infiltrated every boardroom since the movement started: converged services, reduced IT budgets, I even believe synergy was thrown in there somewhere.

    Now a tiny bit of background; we are a medium sized company that makes stuff. The stuff we make has to be kept secret until we make it (<–my security training at work right there).

    So here is what I did. I sent an email back to my CEO saying quite simply "Cloud computing could cost us everything". Here is my argument why:

    In an age of corporate espionage, information pirates, and hacktivism gone wild why on earth are we going to trust a third party when we don't even trust the majority of our employees? Will the cloud computing company reimburse us for the 15+ years of RD that was stolen? How will they value the bits stolen by man hours or lost profit? How long is that going to take in court? Which one of us is gonna stand at the podium and explain this to our stock holders?

    Now I know some of the cloud computing guys are going through every safety measure they can think of to make my assertions sound ridiculous. But let me ask you this: If I told you three years ago that Sony servers would get dropped like a rock and have their customers credit cards would you have believed me? If I had asked you even last year if you believed the governments network could be compromised what would you have said?

    The reality is we are losing the security game, instead of "converging" I am convinced our company should be lowering our public footprint. In my humble opinion anyone moving to the cloud should make sure that the computing they are doing is something they wouldn't mind being right out in the public, because that's basically what you are doing.

  5. If you’ve survived in IT this long then you most likely have the ability to reinvent yourself every 5 to 10 years. I started as a VB programmer and then learned Centura for our client-server model, then became a Peoplesoft developer, then integrated parts of Peoplesoft with our platform(which so far has been a big expensive flop), and I’m ready to tackle cloud platforms when the time comes. This is just another phase in our ever evolving world.

  6. Jerry E Durant

    No criticism on Gartner, you do what you need to do to provide service, make money and hopefully impart knowledge along the way. I would just caution the nervous few to treat this as a warning and not as a condition. If you are feeling that way it’s because the risk to your business has not been reconciled with the solutions that are being so artfully promoted. Cloud isn’t for everyone but it can be a solution for those companies who have ever changing, and future unknown, resource issues that can be abated with such a model. It still however has to be shrinked wrapped with security, protocol, pragmatic performance monitoring, change control (at the operational level) and have it incorporated into your strategic planning.

  7. IT fear the loss of power blah blah standing in the way blah blah.

    1) Most companies I’ve worked for IT have no power anyway, so there is nothing to “protect”
    2) Ever think that we highly trained, highly qualified professionals might actually have some idea what we are talking about maybe? Maybe we are trying to do our best for the company? Maybe we understand this just a little bit better than journalists and sales reps?

  8. Interesting article, and close the the heart. I’m being asked regularly for It blessing to go out tothje cloud SAAS envirnment by the Busines users. They are looking for a rubbber stamp from Security to cover their risks. This is as indicated in the artcle as providing a new service as a CSB

  9. Melvyn Polatchek

    I remember my early days as a PC programmer when business departments would hire me to build applications they could not get from their IT departments which were called the ‘evil empire’ So, when the IT departments realized they were becoming less relevant, they adopted client-server and got the power back. You are talking about adding a layer of bureacracy for politics.

    Melvyn Polatchek

  10. Sylwia Matuszewska

    Definitely true. Observing (also from Gartner’s perspective) all these changes you described, we created inlevel ( to give business people (even with no IT knowledge) a tool helping them to start conversation with SaaS vendors in much more symmetrical way. They just need to openly speak business language (busines benefits they expect from software, processes software should improve or change, KPIs to measure the success of implementation, etc.) as the software in our directory is categorized based on such business parameters ( What’s more – they can simoultaneusly contact many selected vendors by sending them directly just one easy RFI. As easy as that! Of course, we also invite IT people willing to talk business:)

  11. TechnoBaron

    Once in the Clouds “POOF”… Thin Air! Oh and for anyone who actually thinks this is an evolution “NO” can you say TREND? Cloud is simply a way to make IT look like it going through an evolution (smoke and mirrors). These services have been available for years, all that has been done here, is a marketing ploy and a new name!!!!

  12. Barb, thanks for sharing Gartner’s insight on the cloud. It is true, cloud is taking off with an increasing amount of users apart of it, whether public or private. With popularity also comes with the increasing need for security in the cloud.

    Mosaic Technology

  13. I wonder if there will be any fixed contracts preventing cloud sercices companies from doubling, tripling their prices for their services once a company has committed to the cloud?

    • I wonder about this too… during the recession, the push back against open-ended consulting contracts was strong. I would bet there will be more fixed-time/fixed-cost implementations going forward — although companies seem so flummoxed by cloud they might be afraid to push them onto their integration/consulting partners.

  14. Bruce Culver

    IT can play a great role in embracing Cloud capabilities. The biggest hurdle for IT regards to “embracing” is the speed aspect of the Cloud. We are no longer in the SAP / ORACLE world of 24 months to implement and scores of consultants. Your CEO needs the advantages faster and cheaper. SAP and ORACLE can’t deliver on those two counts.

  15. Jeffery Schulte

    As a small IT company providing custom cloud solutions, we have had great success in supplying an integrated approach to our cloud service. It is true that many of our clients reflect this sentiment at first…

    “cloud computing trends shows just how nervous the growing use of cloud services makes IT departments.”

    However, after we show them that we are a compliment to their efforts, e.g. hosted DR and business continuity services, onsite remote management, and hosted managed services. They realize that this frees them up to spend more time on innovations within their respected companies and less time on administration.

    As a smaller provider we can take our clients to our ‘cloud’ and show them the physical equipment they will utilize.

    This takes all the mystery out of it, and allows everyone to optimize using the right combinations of services that ultimately make not only the company better off, but IT staff too.

  16. I can only base this result on solid facts. Out of a sample of 100 companies accessing my website in January the initial enquiry always come from the CEO or managing director level rather than dedicated IT staff. This is a trend that will continue as the market drivers are targeted towards the business rather than the IT function.

  17. Richard Kaminski

    Yes, it is comming. Major players in cloud technology will select the internal hardware and become advisors as to what software companies should purchase to run their businesses. IT departments will shrink and things will run much more smoothly. There will always be a need for programmers and business analysts – but that need will be at the cloud consulting companies who will supply those specific talent sets to their clients and integrate the resulting enhancements into their base software offerings.

  18. Wil Cramer

    It is interesting how we, the IT community have allowed technology advances to influence the business so strongly and so directly. If we look across to the old CMMI there is a danger that just as we were approaching that 4th level of a managed system, another apparent technological boost allows the business to take us back to level 1 or below. Gartner’s point is valid that the business needs more advice but it is us that must integrate better to the business and the executive so that they have clear advice and guidance.

    Conscious of the various arguments and opinions about the ‘cloud’, a cynic might say that it is external suppliers driving straight into the business because they are an easier target for a direct sell than the IT dept. We as organizations should be looking to protect ourselves from that or at suggested earlier we’ll be back in the mini days!

  19. Awesome point of view.

    The transition of power (knowledge and accessibility) to the business is inevitable. They need the technology to solve Business issues. Look at spread sheet. How much of every day business computing was done in spread sheet? Would you like to be the IT person who insisted that all calculation needs to be done by IT?

    How long do you think that person lasted in the business would?

    IT should help Business follow established SOA standard to integrate in cloud as they should helped them writing better formulas. (My apology on my grammar since english is my second language)

  20. Marilyn Evabs

    Oh dear .. the late 80s » early 90s saw us face the same dilemma. Minis & PCs gave business the opportunity to go it alone & fire the internal IT dept., which charged well but treated them like mushrooms !!
    While IT depts. remained in denial for years companies such as IBM seized the day creating IBM GSC; GMH IT became such a successful company that EDS bought them out & small software houses .. many still in business .. found their start-up opportunities.
    It was only the ability to network PCs & thus re-exercise control, that enabled the return of IT depts.
    Are we going to repeat the ostritch trick so soon or are we going to learn how to provide Customer Service ??

  21. newchaos

    Ever notice how IT is a favorite target of media articles? It’s because traditionally most of the tech spending has gone through IT. The media analysts want it taken out of the hands of people whose core competency is to procure, have experience at this very task, and put it into the hands of people who don’t have mindset for it and can be easily manipulated. This is a media war that IT people are too busy to fight and don’t have any way of fighting. Gartner’s agenda is pretty obvious.

    • Eamonn Colman

      Some of the message gets diluted but the fact is, cloud is the new delivery model for IT. This isn’t a war on IT, it’s just an evolution. Between you and me there are SAP and Oracle guys who say “pshhh cloud whatever.” Those guys are too busy to fight. They will lose their job.

      • Daniel Boyer

        Depends on what your critical infrastructure is supporting and what you are doing on it. No trend just another market, they ALL have their inefficiencies…trust me I work for a bunch of hackers.

    • markokenya

      sorry, but I agree that IT departments need to have their monopoly dissolved. They are risk averse, bureaucratic, unimaginative, and resistant to progress. Most companies will be better off with their IT team gone

  22. See the self-serving aspects of Gartner’s report here.

    “need to establish “formal decision frameworks” to make the best possible cloud decisions”

    Guess who is going to provide these decision frameworks to IT departments?

    Barb, next time you write these, please add some of your critical thinking, instead of repeating things verbatim.

      • Huh!? Firstly because firms like Gartner etc provide IT consulting to IT departments, hence they can see trends closely and analyse better. Also, this talks about downsizing of the IT department – if it was self interest alone, then why would they publicise something that kills their golden goose. If that was the case, then I would come up with a report that allows IT department to deal with cloud and protect their jobs.
        The cloud effectively puts control (of usage) into the hands of business users who so far have been charged arbitrarily by IT department for computing usage (because there is no other model to divvy the charge – not malicious). The pay per use model will charge business IT usage like any utility bill would. In such a case, a formal decision framework will need to be established to “buy” computing usage. You seem to assume above that the decision framework can only be done by IT and that too only with Gartner’s help. To that, I ask you to consider the following – today the business users already have decision making frameworks in place to buy their supporting consumables i.e. paper, electricity, clips, pens and pencils, water, etc etc. It is called the Procurement Department – which can very well extend it’s repertoire to “buy” computing usage as well.