James Urquhart| Gigaom

I have been discussing, writing about and working on cloud computing for almost seven years. It takes a lot to shake my basic beliefs about the importance of cloud computing, and how its adoption will radically change — heck, has radically changed — the IT industry.

However, every once in a while something happens to remind me that there are more nuances to cloud adoption than any one person, or even group of people, can fully ascertain.

Most recently, I was reminded that “cloud adoption” isn’t a single path, and we as industry practitioners (vendors, service providers and customers alike) have to be very careful how we generalize the use of cloud computing in business.

About three months ago, I was asked to speak at the Insight Integrated Systems Real Cloud Summit in Long Beach, Calif. IIS is a value-added reseller of hardware and software solutions, and they kindly asked me to come speak about cloud and its affect on operations models. The RealCloud audience was primarily medium size businesses (between 500 and 10,000 employees), and I jumped at the chance to meet a segment of the IT industry with which I rarely interact.

About half way through my talk, which was a variation of the “Big Rethink” and “Operations in a Cloud World” messages I’ve covered for other audiences, I came to a point I thought was very important to most software developers. On a whim, I asked this audience how many of them saw custom software development as a key part of their IT strategy. I expected about half the room of 100 or so to respond positively.

One hand went up at the back of the room. (It turns out that was someone from NASA’s Jet Propulsion Laboratory. Well, duh.)

Boom. Any discussion about why developers were bypassing IT to gain agility in addressing new models was immaterial here. The idea that Infrastructure as a Service and Platform as a Service were going to change the way software was going to be built and delivered just didn’t directly apply to these guys.

I came away from that experience with a new appreciation for several things that I’m working hard to not lose sight of again.

1. It’s the services, stupid

Try as I might, I struggle to remember that cloud computing is more than just recasting IT to better meet the needs of software developers. Part of that is the fact that I live and work in the Silicon Bubble … er, Valley … and work on a product that targets the intersection of IT operations and software development.

But some of it is the insistence that companies selling infrastructure and platform services are targeting “the enterprise,” when in fact they are not and cannot and should not target every enterprise. What AWS and Pivotal and Dell and others are largely targeting is enterprises that are developing software services.

I define software services in this context as software that is designed to be run and accessed over the network, and is built for a dynamic set of consumers (human and/or other software). Certainly if you are building an application for personal use, or for the use of your immediate department, you can leverage cloud, but that’s not the major market opportunity.

So, if you are a business selling cloud platform or infrastructure technologies or services to the enterprise, you likely aren’t wasting much time on these medium businesses that aren’t doing software development. So-called “virtual private clouds” can be used as computing pools in any business, but if they don’t serve developers, they don’t revolutionize the use of IT at nearly the scale as if they did serve developers.

Now, if you offer a software application as a service (aka SaaS), that’s a different story entirely. Common business systems and platforms are where the opportunity is with these mid-sized businesses that don’t write much code.

2. Most medium-sized businesses (and probably many large corporate IT departments) are ill staffed to handle the change in operations models that cloud will drive

The scary thing about the transition from a server- or infrastructure-centric operations model to an application-centric model for businesses that don’t do software services development is how radical the shift in required skills will be from one model to the other. Most IT departments were created and staffed (from the client-server era on, at least) to do one thing first and foremost — make sure there are computers available on which to run software that the business requires.

Look at the IT staffs of most non-web businesses. One of the dominant skill sets that has been built up over the years is data center, server, network and storage operations. And, if you lump in operating systems and virtualization (which I consider part of the infrastructure, not the application software), system administrators.

In an application-centric world, deep understanding of switch and router operations, NIC and BIOS configuration, filer configuration, data center cooling and so on give way to understanding how application architectures can leverage the services offered by cloud providers and cloud platforms to combine connectivity, services, consumers, computation and data.

Since those skills are light in many of these organizations, it will probably delay movement from infrastructure-centric to application-centric operations models — which in turn will likely delay the realization of the value of cloud computing to those operations teams.

Furthermore, if the move to software application services increasingly occurs in these companies, it will likely displace many of these infrastructure jobs. The good news is that it will also create many new application-administration jobs.

3. If you aren’t developing custom services for your business, why the heck not?

Perhaps the most perplexing question to me, however, is why more hands didn’t go up in that room that day. As far as I can tell, the Internet and the power of mobile computing are disrupting every industry (except maybe certain face-to-face service industries, like beauticians or psychotherapists).

Heavy equipment manufacturer Caterpillar provides an online data collection and analytics service to keep track of equipment condition. Early pioneers in online learning platforms included several colleges and universities. Even political campaigns have gotten into the custom software act.

So, is it really true that no new revenue could be generated from at least some simple online service applications? Certainly the effect of mobile on your industry has to have been top of mind for the last five years or so, but what about APIs? Data analytics related to your products or services? Automating your supply chain?

Granted, some of these things might be becoming “standardized” enough to warrant acquiring the capability from a SaaS vendor. But, as has been said time and time again, shouldn’t IT do more than just keep the computers and networks running? Shouldn’t technologists add value to the business by identifying ways technology can expand the business?

That’s certainly not to say that custom software development is for everyone, but it certainly should be strategic for more that just the guys sending one-of-a-kind research instruments into space.


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