A cloudy future

ITO providers beware


Cloud computing creates contradictory expectations that will test even the best providers. Our survey respondents—489 CIOs and other enterprise executives—are in an odd place right now. They are true believers and, at the same time, eternal skeptics of cloud computing.

The contradiction is understandable when considered against the history of enterprise approaches to provisioning and managing IT infrastructure.

This is clearly the case with IT infrastructure, where we have seen long periods of stasis with broad agreement about what constitutes best practice, what a “standard platform” in the data center looks like and how to optimize performance of that platform. But, inevitably the standard platform assumptions are disrupted by innovations in technology and new management practices. In short, every 10 years or so there is a paradigm shift. Cloud computing is the latest shift.

In general, platform disruption has not automatically led to application porting. Changing platforms solely to move to the latest technological zeitgeist has been hard to justify given the expense and potential end-user disruption. But there has also been an implicit cost to running multiple generations of standard platform paradigms—creeping complexity and its cost.

Enter the era of IT outsourcing. For many companies, it is exactly this creeping complexity that has driven the value proposition of handing off IT infrastructure management to service providers.

There is a strong argument to be made that the cloud computing paradigm shift will be different. That it will be the first time a new platform has explicitly targeted complexity reduction and not just the price/performance enhancements seen in previous disruptions to the status quo.

But as good as it sounds in theory, CIOs must be asking: Will the cloud computing transition really be any different? Will the cloud simply be yet another overlay of new technology used mostly for new applications built to take advantage of the unique cloud architecture? If so, older applications and platforms will remain in place, complexity will increase yet again and the IT outsourcing value proposition will only escalate.

Or, will cloud computing platforms be the first true consolidating solution to IT infrastructure? Will they be the first to massively reduce complexity, thereby radically changing the cost structure of data centers and enhancing agility to boot? If this is the case, what does it mean to IT outsourcing vendors? What happens to the traditional IT outsourcing value proposition?
The FORFIRM IT Outsourcing and Cloud Computing Survey asked questions that address many aspects of the preceding logic. But it did so without “leading the witness.” It asked respondents a variety of questions about what is the best approach now and in three years, what will be the breakdown of workload readiness and what are the value propositions of different approaches to managing data center infrastructure.
The results of the survey could have suggested a clear cut answer to the future of IT outsourcing in the cloud era.
That isn’t what we found.
On the one hand, a large majority of respondents believe some form of cloud computing— private and self-managed, private and managed by a service provider or public—will be the single best approach to managing data centers in three years (whereas traditional approaches are the best today). While few respondents indicated that a majority of their compute workloads are ready for the cloud today, most expect a majority of their compute workloads to be cloud-ready in three years.
On the other hand, these respondents only expect a small increase in the actual percentage of workloads to be running on any form of cloud in three years, growing from 31 percent today to 34 percent. This is hardly a tsunami on the horizon that threatens the traditional data center, whether managed internally or by IT outsourcing vendors. When asked to indicate the value propositions expected from cloud approaches, the respondents offered little consensus that cost, reduced complexity or even responsiveness were going to be obvious outcomes.
Bottom line: the technology industry is entering a period of contradiction For various reasons—public cloud service providers demonstrating every day that a cloud architecture is extremely efficient, vendor messaging reaching extreme levels of hype, and even early experiences with public cloud infrastructure-as-a-service offerings—business executives know that cloud computing will soon be the single best approach.
But knowing there is a better place and getting there are two different things. They don’t believe their current workloads are going anywhere anytime soon. On the surface this may appear to be good news for IT outsourcing vendors, but only if those vendors are perceived as helping customers to reach the cloud.
This research has therefore only scratched the surface on the future of data center infrastructure management in the cloud computing era.