The discussion of if the "Cloud" is a good idea, or if we are "going to the cloud" has been replaced with how we are going to the cloud and what if anything should stay in house. The fact is that doing otherwise is rapidly becoming unsustainable.

In this second decade of the 21st century, Enterprise software has a challenging agenda:

It must be robust, scalable, and secure. It must be consumer usable, while being customizable. It must be easy to evolve, change and upgrade. It must be easy to integrate its data, services, UI and identity management with legacy, current and future systems. It must, of course, enable the specific processes, transactions, communications and other manipulations that are unique to your organization. It must be cost effective.

None of these requirements is negotiable -- but some companies are making surprising tradeoffs, because the payoff is vast. The good news is that the issues that concern most organizations most deeply -- security, robustness and records management are rapidly resolving. Of course, consumer cloud applications are not the same thing as enterprise cloud applications -- there are different standards for reliability, recoverability and security. One should not be confused for the other. But the race is on. Enterprise companies are racing to deliver applications that are both usable and cloud-deployed on top their robust backends, and consumer cloud companies are picking at the edge of enterprise.

Why are we making tradeoffs? Many organizations, including the US Government and giants like GM, who are rumored to be going over to Google from IBM, are beginning a move to the cloud. While the cloud has some intrinsic benefits -- like universal access, integration, standards, social and the like, the real reason we value the cloud isn't so much that the cloud is inherently wonderful, but that the alternative is strangling enterprise. The staggering complexity, expense and time for an IT organization to meet the needs of even a moderately sized organization is becoming unsupportable, and beginning to hold good business back.

The basic value and issues of cloud computing were recently, and perhaps canonically described by Andrew McAfee. But at its core, the reason the cloud debate is extremely simple: SaaS lets you get the best available tools faster, cheaper and with a lot less planning and decision making. Your users will be happier, and your IT focus can focus on 1. that which is unique to your company; 2. monitoring and curating technology usage and adoption in the enterprise; and 3. Thinking strategically about where to go next.

1. Find Focus:

You might have the best IT staff in the known universe. And then again you may not. It is immaterial. No matter how hard you work, how rich or how smart you are, Joy's Law prevails: "No matter who you are, most of the smartest people work for someone else”. [or for the more mathematically geeky, I like this formulation: "Most smart people don't work here... for any definition of here"]. This is to say that the world is filled with smart people, but you can only have a relative few of them on your team. So it is irrational to try to replace aggregate work of these hordes of competents with the few you have on your staff.

The role of IT is to help employees optimize their use of technology to enable them to best meet the needs of their market and customers at the lowest cost. The cloud gives IT the luxury of being able to meet basic needs at the same time as envisioning and shepherding the larger IT picture for the organization, without grinding itself into dust. The IT department can now curate the adoption and use of technology, rather than stand like atlas trying to just keep it aloft.

2. Make What You Can't Buy:

Maximize your Person-Bytes, or why it took Thomas Thwaite a year to make a toaster (that didn't work).

This concept overlaps with Joy's law, but it is subtly different. Not only can you not corner the market on a particular expertise, you need an ever broader swath of expertise to make progress these days. This is precisely articulated by Ricardo Hausmann, an economist who gave one of the most interesting lectures I've seen this year. He begins by comparing the relative genius of the Inuit man who can build his own house, acquire his own food and fashion his own snowshoes, with the relative helplessness of "Modern White Guy" who is, by these measures, completely useless. He goes on to describe knowledge in terms of "Person Bytes" which is a rough measure of how much knowledge an individual can master. He uses fascinating measures and statistics to show that those societies which can produce goods that require the most person-bytes, are the most differentiated, and enjoy unimpeded economic growth.

The idea is that there is no single individual that can master all the knowledge it takes to build a computer from scratch. This is why it took Thomas Thwaite a year to make a toaster. [A simpler, similar story is here].

It's not hard to extend that premise to business -- the more person-bytes required to deliver the value, the more differentiated and unimpeded the business is. So given that you can only hold so many person bytes within your organization, you are best served to get the maximum benefit of somebody else's person-bytes for as much as you can, turning your precious PBs toward that which others do not. The point: the "not invented here" syndrome is akin to self-immolation.

Learning Opportunities

The typical enterprise IT team of the last 20 years was an organization that was in control of every aspect of your technology usage, and if you needed something, you could get in line, and you might get a pale imitation of what you wanted a year later. The IT staff were perpetually overloaded, working very long hours, while progress remained shockingly slow. The cloud is the ticket out. IT can use cloud to return to hero status -- enabling nothing less than magic at the exact time it's needed. The cloud can liberate IT from worrying about the minutia of everything you do and how to do it. They no longer need to be subject matter experts, network mechanics, UI designers and a help desk who are perpetually understaffed, under-budgeted and under-appreciated.The cloud sets them free from spending the majority of their time acting as administrators for what is, in effect, commodity software. They no longer need to reinvent every wheel.

The cloud allows you to allocate the person-bytes within your organization to the things that matter most -- those that distinguish your organization and are essential to fulfilling your purpose. The effort to deploy, support, maintain and upgrade commodity systems is radically reduced, allowing IT to focus on a) unique capabilities; b) strategic direction; and c) business support, meaning that IT can better fulfill its purpose at a very, very significant cost reduction.

3. Thinking Strategically:

Be the river, build the river.

It is said that you can never step into the same river twice. A successful business today needs to move at a dizzying pace to deliver the best possible value in the best possible way. It is trying to build and leverage a constant flow of ideas, information, opportunity, innovation to meet the current and future needs of its market.

The newly liberated IT department can look downstream, can look at the current technology portfolio and where it needs to go. Can weed out what's no longer useful, can evolve what is still useful into modern constructs and find opportunities that the business might be missing. The CIO is a strategist who can and should be several paces ahead of the business -- predicting their needs, recognizing their opportunities and informing their choices. The cloud puts nearly infinite capability in the hands of the CIO at a very reasonable price -- enabling the perpetually heads-down IT group to do what it has always really wanted to -- enable the company to be great.

The best is yet to come.

Editor's Note: You may also be interested in reading: