Cloud and The Enterprise Big Bang Theory

Attribution: garlandcannon

Attribution: garlandcannon

Much has already been written about how Cloud will level the IT playing field for SMBs who are trying to compete with larger Enterprises. It allows them to utilize enterprise-grade IT (salesforce automation, customer relationship management, supply chain management, disaster recovery etc) without the enterprise-grade price tags that used to go with it. The resulting increase in flexibility, agility, and time-to-market puts them on a par with their larger business rivals.

But what are the business implications of Cloud on the Enterprise? I’m rapidly reaching the conclusion that the flexibility/agility benefits that enterprises are realizing with their cloud deployments are only a short-term effect … simply a precursor to a much more fundamental change. To use a cosmic metaphor, Cloud is going to be the trigger for an Enterprise ‘Big Bang’.

Historically, IT has acted like gravity in holding an Enterprise together — the bigger the company’s ‘mass’, the more it is able to afford big-ticket technology purchases which the individual business units couldn’t afford on their own. It’s a ‘sum of the parts is greater than the whole’ effect, and it’s worked quite well up until now, despite the fact that it has limited the flexibility of individual departments inside the enterprise.

But Cloud changes all that. It replaces a relatively inflexible set of ‘command and control’ business functions built around a centralized and capital-intensive IT department, with off-the-shelf subscription-based IT services, from which each business unit can choose according to their specific needs.

By eliminating the need for an in-house IT department, Cloud ignites a ‘big bang’ where a single monolithic enterprise explodes into a number of smaller, more agile, autonomous companies reporting in to a single holding company.

The leading driver of this change is SaaS. It’s not by chance that most of the growth in SaaS usage inside enterprises is being driven by the business units, not by IT. The reason is simple: Fed up with having to wait months or years for IT to deliver new business functionality based on highly-customized software with cryptic user interfaces, business units can get exactly the functionality they need from easy-to-use SaaS-based solutions, and they can be up & running almost as fast as they can enter their credit card details.

This doesn’t mean that “IT doesn’t matter” – in fact, it matters more than ever before. It simply means that the role of IT has to change. Business units know what they want to use, but …

  • They’re not experts in managing the costs, SLAs, and end-user support of these new services.
  • Compliance issues don’t go away … SaaS providers have to meet corporate security standards.
  • Someone has to manage the exchange of data between all these SaaS applications, and with the corporate ‘systems of record’
  • The holding company has to produce consolidated accounts across all business units.

None of these things will happen by magic, and IT is in the perfect position to provide the answers. So, rather than providing servers, IT now has to provide services; and rather than resisting the adoption of SaaS, IT has to take a leadership role by working with the businesses to make sure it’s done properly, without getting in their way.

While the image of an ‘exploding enterprise’ might seem far-fetched – or even amusing – today, it is the logical conclusion of the Cloud’s ultimate impact. The smarter IT departments have already started to figure this out and are working with their business units, rather than ignoring what’s going on, or forcing “IT gravity” on them.

So, is ‘IT gravity’ still the dominant force inside your enterprise today – or has the ‘big bang’ started and you just haven’t heard it yet?

About Richard Stone

Richard Stone is Senior Solution Marketing Manager at Compuware, responsible for Mobile and Cloud-based Application Performance Management solutions.
Prior to joining Compuware, Richard has held senior marketing and product management positions at Hewlett Packard, Compaq, plus a number of other US and European IT companies. His domain expertise includes mobile computing, wireless data, cloud computing, application performance management, security, compliance, and high-availability solutions for all market segments (SMB, Enterprise, and key verticals such as Finance, Government, Healthcare, and Retail.