Monday, June 27, 2011

Where's the Business?

Despite all my attempts it appears cloud computing continues to be a technology topic, at least in the Fortune 1000. Over the past year secrets of cloud including Facebook's private cloud, Zynga's use of 12,500 Amazon EC2 instances, and NetFlix creation of their Chaos Monkey have made big company executives ask what are we doing? Hey Mr CIO are we doing these things? What are we doing that we can tout in Fortune magazine or at our next board meeting? Are we in the cloud? I wouldn't be surprise to find a few CIO's have broken down in heaving sobs or curled up on the floor with their thumb in their mouth.

The preconceived notion is that cloud is all about TECHNOLOGY. Guess what, it's not! In reality each of those examples, and the ones CEO's and CFO's trot out to "motivate" their CIO's have nothing to do with technology. Rather, each has to do with the business. It's the needs of the business which drove the application of the technology, not vice versa. Therefore the right question is not CEO to CIO but CIO to the CEO: "Here is what cloud enables businesses to do differently. How can we take advantage of it?"

As clouds are being built the enemy of efficiency, fiefdom building, is following right along. With the number of business savvy CIO's in the Fortune 1000 I'm surprised at how few have engaged the business in a discussion outside of cost savings. Great, run applications and all at a lower cost. But that wasn't the goal of Facebook valued at over $50B. Or of Zynga who is the fastest growing game company on the globe. Or NetFlix who singlehandedly put Blockbuster out of business and force the cable operators to take notice. Either the CIO's don't understand it which I doubt, nobody will listen, or too many people are busy building fiefdoms to protect themselves and therefore are unwilling to share their knowledge.

I met the CTO of Grooveshark, a great web based music delivery service, and we talked about their technology a bit. What interested me was his lack of interest. He had business problems to solve and that was his focus. He didn't want to talk technology.

I have said in front of clients, conferences, and on this blog that technology is the easy part of cloud. And I understand it's also the most visible thanks to the marketing of companies like Microsoft, Oracle and Google. However the value of cloud is in solving real business problems. The impact of cloud is in its transformative value; moving a company further into the digitization of its services.

Technology is interesting. Cost savings is great. But last time I checked companies are ranked by and investors take notice of revenue, profits, and growth.

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