Why the Cloud Won’t Kill Your IT Job

Posted February 23rd, 2017

By:  Marcelo Oliveira, Director Datacenter, Infrastructure, and Continuity Solutions

I have just received the image in this post from a dear friend and wanted to share some thoughts.

On the graph below from Techaisle Enterprise Cloud survey, you’ll notice that in over the past 12 months, in larger companies, IT budgets grew significantly more in organizations with mature cloud adoption than in organizations with an ad-hoc approach to cloud. On the same token, looking forward to the next 12 months, IT investments will grow further the more mature cloud usage gets in enterprises.

Note that all different levels of cloud adoption have been using cloud for about the same 3 years.

In addition, here are some really interesting information coming out of this graph. The percentage of IT professionals in enterprises grows from ad-hoc (4.9%) to emerging (6.0%), then it grows again from emerging to core business (6.2%) and then it reduces moving into mature adoption (5.3%), but even with this reduction, it ends about 7% (5.3% / 4.9%) higher than the earliest stage of cloud adoption.

I may be wrong, but here is the story I see behind the graph: Traditional corporate IT faces many difficulties: old technology, conflicting, unintegrated solutions, low budget, lack of skills, constraint of resources, etc. that make it very difficult to clearly demonstrate the value of the IT organization for the business.

The contract of one of our largest clients started at about $100k a month in mid-2012. Today, they are around $200k a month. When they were looking to outsource their entire corporate IT to Columbus (acquired by Cable & Wireless), I asked the mastermind of the move why he was doing that. His reply did not surprise me at all. He said: “Marcelo, I need to replace my older server, some of them with 7 years of usage, and I don’t have budget to do it. I need to update our technology, as an example, we’ve been running Oracle 9i, and again, no budget. I need to train our technology people, no money. I need support 24×7 and no money.”

Once they moved to our cloud, they were hosted in brand new hardware, with proper monitoring, operations, and adequate 24×7 support. Backup started to be correctly done, monitored, and tested. Downtime moved to zero. The risk of loss of days of production and shipment of their manufactured products was minimized by integration of a complete disaster recovery site that did not exist the first time. Let alone consistent DR tests.

These changes provided our client’s management team with visibility into real costs and benefits of IT and gave them confidence to grow their business without imploding their IT department. They realized they could invest more and more in new applications, like business intelligence, SAP Hana, and others. Their IT investments grew as well as their IT staff – even though the technical people do not need to worry about running datacenters, operating systems patches, daily backups, disaster recovery, telecommunications, or anything else at the operational level.

Their IT personnel currently focus on their business: managing applications, finding opportunities to improve processes, ideas to create new products, distribution channels and marketing campaigns, as well as many more business related activities that are supported by technology.

As enterprise cloud adoption maturity deepens, the benefits of technology usage, such as: better controls, ability to innovate, gains in efficiency, higher productivity, etc. become more evident, they consequently drive management confidence up that additional business growth can be achieved by the technology teams, so investments flows into IT.

After migrating their core business applications to the cloud and collecting all major goodies of technology adoption, naturally the incremental benefits become marginal. At this mature point, there is a tendency to plateau and even reduce a bit the number of IT people as a percentage of the total number of employees in the organization. Nonetheless, as you saw above, the number of IT personnel as a percentage of employees, is 7% higher than in organizations with ad-hoc cloud adoption.

One final thought. While some enterprises have now wasted three years with ad-hoc cloud projects and are full of inefficiencies, others have seriously focused on consuming IT instead of building their own IT and are now enjoying significant competitive advantages.

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