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What CIOs Need to Consider When Migrating to Cloud Is the Next Big Move

The Great IT Debate

In enterprises across the globe, CIOs are looking cautiously in one direction: up - to the cloud. Migrating to the cloud changes not only the operations of the data center but also the roles of the CIO and IT staff. As a result, management must carefully weigh the pros and cons of shifting to cloud-based computing so that they can prepare their organizations and themselves for change that cascades across budgets, vendor relations, job descriptions and career paths, as well as infrastructure and processes.

The benefits of moving from an on-premises model to subscription-based, cloud-hosted computing are substantial. With cloud computing, CIOs have the opportunity to capitalize on a variable-cost structure. Until recently, data centers have needed to load up with hardware, software and networking devices to prepare for peak periods, even though these investments may lie underused or dormant for significant periods. Traditionally, IT costs only go up. By employing the cloud, however, IT departments pay for only the infrastructure and applications that they use, as they need them. They can easily scale up when the business grows or during peak selling seasons, then scale back if the economy shrinks. Over time, the cost of Software-as-a-Service subscriptions is far lower than that of licensing fees for software, middleware and databases, along with expenditures on hardware and staff to maintain it all.

Furthermore, cloud-based computing enables faster deployment of technology, since the enterprise needs only to add a subscription for a new employee, rather than configure permissions and upgrade data storage.

Equally important, migrating to the cloud substantially reduces pressure on the capital budget. The shift removes a huge amount of demand for data center infrastructure, since the cloud-computing vendor houses virtually all of the servers, networking systems and software.

Additionally, the cloud can relieve the CIO's team of the enormous amount of time and effort required to make upgrades and patches and to extend infrastructure. The CIO is traditionally responsible for ensuring these massive projects are completed in the right sequence and that changes are made in a compatible fashion. In a cloud environment, this demanding work goes away, with no need for patches or upgrades at the business level. The vendor manages it all.

Cloud computing also can make hiring decisions easier and more productive. Typically, finding and retaining people with the right set of skills to maintain and operate a data center has been frustratingly difficult. In a cloud environment, the vendor employs those individuals. As a result, the CIO gains the opportunity to refocus scarce and valuable IT resources on strategies and actions with much higher value to the company. In an on-premises center, routine maintenance and upgrading devours a great majority of the IT staff's time. Because staff is so consumed with must-do chores, the CIO seems to spend his career saying no to requests from the business for applications and capabilities that they really want. With cloud computing, the great majority of routine tasks disappear, freeing staff for more productive activity.

Another consideration is that the cloud environment is much more amenable to the bring-your-own-device trend that has been driving IT management to find ways to protect its networks from malware and misuse. Conventionally, on-premises systems block access with a big internal firewall; it's a system designed specifically to prevent connection of all but a limited set of outside devices. The cloud, on the other hand, is device-friendly. If you can access the Internet, you can work with vendor-hosted data from any type of mobile or desktop device.

Finally, cloud computing dramatically lowers the risk of obsolescence. The vendor automatically makes the latest version of cloud-based operating systems and applications available to every user, while ensuring the networking, storage and security systems evolve to meet the needs of all the vendor's customers.

While some have claimed that the sky's the limit for cloud computing, transitioning to the cloud environment can present difficulties and occasional obstacles that can draw CIOs back down to Earth. First of all, the CIO and the IT team need to develop a new skill. Previously, a large part of IT staff's role had been managing equipment, software and licenses; with the cloud, the CIO shifts to managing the relationship and subscriptions with the vendor. The job is completely different; instead of providing IT services directly to users, the CIO manages a third party that provides those services.

For IT staff, migration to the cloud potentially could be a career threat. For example, computer programmers who spend their days writing modifications to on-premises ERP systems lose that responsibility when the enterprise adopts cloud-based ERP. The CIO must decide what to do with these now displaced employees.

Similarly, a shift to the cloud may generate the perception that someone in the C-suite will decide to cut the CIO's headcount and budget. While this is not a common outcome, the perception may remain and impact productivity.

Working in the cloud, users and IT staff no longer have the ability to modify software. That may be a good thing or a difficult proposition, depending on the organization. Manufacturers of on-premises software traditionally have made their products as configurable as possible, since each release must be able to meet the needs of hundreds of thousands of different companies. Configuration is a process that IT has taken for granted on premises. In the cloud, software customization is very limited, with someone outside the organization controlling the applications.

A final consideration is that a fundamental change in relationships within the business may accompany migration to the cloud. With the on-premises model, users within the company depended solely on the IT department for their computing needs. In the cloud, the relationship changes to one between users and the vendor. It's the vendor that handles user requests, interacts with them and provides the services. Whereas the CIO once controlled and managed all the IT systems and information in the organization, the cloud suddenly empowers individual users and departments. They no longer need to go to the IT department. For some CIOs, this may be a welcome development; others may not wish to relinquish the connections they have nurtured with colleagues in the enterprise, or must seek to evolve them.

CIOs should carefully analyze the potential benefits and drawbacks of migrating to the cloud before making the leap. More resources to assist in that decision can be found at the Plex Systems Knowledge Center (www.plex.com/knowledge-center) and discussions of cloud computing by Microsoft (www. msdn.microsoft.com/en-us/magazine/ee309870.aspx) and Cisco (www.cisco.com/en/US/solutions/collateral/ns340/ns517/ns224/ns836/ns976/white_paper_c11-543729.html ).

More Stories By Jim Shepherd

As vice president of strategy, Jim Shepherd is responsible for defining the strategic direction of Plex Systems (Plex) with manufacturers across multiple industries and global markets. He has 40 years of leadership in manufacturing and technology. Prior to joining Plex, Shepherd was vice president and distinguished analyst for Gartner Inc., the world’s leading information technology research company. Among his many accomplishments, Shepherd was the first AMR research fellow.

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rcopperman 06/21/13 01:59:00 PM EDT

Nice article from Jim at Plex. The other points to stress with movement to Cloud/SAAS is the importance of the back-end infrastructure related to access and availability. Eliminate as many single points of failure for getting and staying connected to the web. This should include redundant switches, routers, Firewalls, and so on. Also, must assure there is adequate bandwidth (dedicated if possible for business critical apps like ERP) and multi-points of access.

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