Global CIO: 5 Points To Make When Your CEO Cries Cloud

Whether it's from the board of directors, the CEO, or a business unit leader, CIOs are getting hit with cloud computing questions. What are we doing with cloud computing? Shouldn't we do more? What's our cloud strategy? Here's one attempt at a script for how to reply.

1. Not everyone's in the cloud.

It might feel like the whole world has leapt to cloud computing, and left us behind.

But consider these numbers. Dr. Dobb's and Forrester recently surveyed 1,021 developers and found about 4% currently deploying apps to the cloud. Just 4%. InformationWeek's Outlook 2010 research found 10% of companies doing some kind of cloud computing (meaning online CPU, storage, etc., but not including software as a service), and another 5% absolutely planning to do it. Both those data points to a clear reality: cloud computing--when defined as buying computing power by-the-drink IT from a third party--is in very early adopter stage.

Not to say we should dismiss it. That would be a serious mistake. Interest is soaring not because we CIOs are gullible chumps falling for the hype, but because the capabilities are improving quickly and the potential gains are enticing. A year ago, just 31% of InformationWeek readers expressed a positive view of cloud computing, in the sense of either using it, planning to, or feeling "more likely" to use it given the poor economy. This year, 46% take one of those positive views of the cloud. Fifteen percentage points is a big move in a year. Cloud computing has momentum and mindshare for solid reasons, even if it's more interest than adoption today.

2. We should be learning, not deploying.

Remember when we rushed that critical e-commerce project to an offshore developer in 2002, because the promised cost savings made our mouths water? And how we got back what we asked for, but it didn't remotely do what we needed, because we didn't have the skills to ask for what we really needed? Offshoring came with a steep learning curve on our end--learning how to manage offshore resources, and understand the risks. We're going to go through the same curve with cloud computing.

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At the InformationWeek 500 conference this year, I heard this comparison: outsourcing your infrastructure is like renting a house; cloud computing is like renting a hotel room. You rent only what you need while co-existing alongside any number of strangers going about their own business. We need to understand the risks and capabilities that come with what's essentially a new flavor of outsourcing.

3. We are learning.

We're not sitting on our hands, waiting for cloud computing to be perfected by everyone else. We have pilot projects in the works, offloading some discrete but computing-intensive jobs to cloud providers, giving our IT teams some experience and hopefully helping our business unit leaders see what's possible as well, so they can bring ideas to us. We're tire-kicking the vendors, including Amazon Web Services and Microsoft's newly launched Azure, to understand their capabilities. We're talking to other companies about the use cases they find for cloud's variable capacity. Eli Lilly, for example, is using Amazon's EC2 for research.

We're also working on applying cloud architecture concepts, in terms of on demand and shared computing resources, to our own data center. That's delivering near-term cost savings, and we hope lays the groundwork for shifting overflow workloads to public clouds like Amazon, in a hybrid cloud model. 4. We still have concerns about cloud.

Security's on the top of our list, along with everyone else's. But there are other concerns less talked about.

Reliability's also a work in progress. These services aren't being put to the test by enterprises running a lot of large-scale, mission-critical software; a more typical use is a developer needing a variable-cost platform on which to build and run early stage software, or a test environment, or one-time research efforts.

And we have worries about less obvious issues, such as lock-in. If we build an app to run in Amazon's infrastructure, how do we take that work, and that data, with us if we want to move? That interoperability is a work in progress today. For every bit of data we put in, we need to think about the cost of taking it out, so we don't build up a liability that makes it too pricey to switch. I know it doesn't seem possible amid today's enthusiasm, but the vendors could even lose interest in this model, and drop us as customers. For the likes of Amazon, Microsoft, and Salesforce, selling infrastructure as a service is a tiny tag-along business today, hitched onto Amazon's e-commerce machine, or the online software businesses of Microsoft and Salesforce. It's as unproven for them as it is for us. We don't want to try to run while they're still crawling.

5. And by the way, we are in the cloud.

So you're right, we should be doing something in the cloud, and we are. The most widespread and practical type of cloud computing is software as a service, and we're embracing that in a big way. The Concur expense report system we all use, and the SuccessFactors system we're using to set 2010 employee goals--those are in the cloud, running in the vendor's data center, not ours. Same with our CRM system, and we're looking at apps in other areas, such as procurement and supplier management and human resources. Pretty much no new software comes in the door without us considering a SaaS option, since it means less upfront cost and, just as important, faster deployment and less IT staff support, since our staff's 10% smaller than a year ago. In the coming year, we'll run a bake-off for a new e-mail system pitting cloud-based versions Exchange and Lotus, and Google's Web-based e-mail against one another.

So, that's my best attempt at a script for when the inevitable cloud questions come. Will it satisfy your board of directors, or fellow execs? Are there other key factors you'd add to it? If you have some favorite lines you're using about the cloud, I'm sure your peers would love for you to share them here. It sure beats getting by on improv.