Infrastructure Strategies

Cloud computing significantly changes the strategic playing field. Core to this change is both a philosophical and physical change to how infrastructure is managed. One doesn’t have to look far to see similarities in other industries where this transformation has taken place. Paramount among them is the electric industry. In the late 1800’s, companies built their own power generation facilities. By the turn of the century, companies were leveraging central facilities to provide power. This afforded companies several advantages. First, economies of scale provided economic benefit. Companies could acquire power cheaper than they could produce it themselves. Second, it allowed companies flexibility to move their companies further from the power sources themselves. Centralized power generation lead to additional power transmission possibilities. Third, it allowed companies to focus on strategic priorities and avoid becoming masters at power generation. Lastly, the economic model changed for the companies. Instead of making capital investments in power generation, they moved to a pay-as-you-go service based model. This provided further flexibility for the company

Turning back to present day…

In the short term, there are a number of questions that come up when considering cloud computing and specifically IaaS. Many enterprise and SMB companies are already starting to consider pay-per-use services to replace their existing systems. Some estimates peg this number at ~40% of companies use some form of cloud computing service (2009). But this story is not all positive. There are a number of challenges that come with these opportunities. The first challenge is in IT portfolio management. As an organization evaluates their existing (and projected) portfolio offering, consideration needs to be given on which services are strategic to the company. Similar to power generation, is compute/ storage capacity strategic? Or is it simply a requirement? Second, providers need evaluations that consider internal operations. Asking the right questions and probing into sensitive areas will provide confidence in the provider’s ability…and risks. One cannot absolve themselves of risk assessments simply by leveraging a third-party provider.

Similarly, is one provider enough to meet the requirements? As we have already seen, infrastructure providers will have failures too. How do you ensure that you’re protecting the interests of the company through your arrangements?

Tim Crawford is ranked as one of the Top 100 Most Influential Chief Information Technology Officers (#4), Top 100 Most Social CIOs (#7), Top 20 People Most Retweeted by IT Leaders (#5) and Top 100 Cloud Experts and Influencers. Tim is a strategic CIO & advisor that works with large global enterprise organizations across a number of industries including financial services, healthcare, major airlines and high-tech. Tim’s work differentiates and catapults organizations in transformative ways through the use of technology as a strategic lever. Tim takes a provocative, but pragmatic approach to the intersection of business and technology. Tim is an internationally renowned CIO thought leader including Digital Transformation, Cloud Computing, Data Analytics and Internet of Things (IoT). Tim has served as CIO and other senior IT roles with global organizations such as Konica Minolta/ All Covered, Stanford University, Knight-Ridder, Philips Electronics and National Semiconductor. Tim is also the host of the CIO In The Know (CIOitk) podcast. CIOitk is a weekly podcast that interviews CIOs on the top issues facing CIOs today. Tim holds an MBA in International Business with Honors from Golden Gate University Ageno School of Business and a Bachelor of Science degree in Computer Information Systems from Golden Gate University.

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