Finding Silver Linings in the Cloud (First in a series)

Post #1: Scanning the horizon

Intertech had a series of goals for 2011… Some we blew out of the water (like our sales goal, thanks sales crew)…

Only one came short… our target for cloud-based applications for customers. Why? While we believe cloud computing represents the future of IT and we’re eager to be among the best providers of cloud-based development services. I’m sorry to report that our goal was not met, not even by half, because clients were convinced that it made sense to pursue custom cloud-based applications. Many have not even thought about it.

Turns out, our clients are not alone.

A 2011 survey by InformationWeek found that only 29 percent of respondents had analyzed the impact of the cloud on their internet-facing architecture. And the technology research firm Gartner predicts that while cloud computing will grow at an annual rate of 19 percent through 2015, it still will account for less than five percent of total worldwide IT spending by that year.

With such paltry predictions, why should companies care about the cloud? Many, including MIT digital business research scientist Andrew McAfee, believe the economics of building and running a technology infrastructure will favor the cloud over on-premise computing. That might be the reason why the chief information officer for the United States this year called for moving $20 billion – or one quarter – of all federal IT spending into the cloud.

As a CEO, have you given much thought to the implications of cloud computing for your company? If you lead IT, are you concerned that the cloud will displace you or even your entire IT department? Are you unsure what “cloud computing” even means? If you answered yes to even one of these questions, my next series of posts may be helpful. I will sort out the pros and cons of cloud computing, giving you my personal perspective and sharing information and insights gleaned from the excellent article, “What Every CEO Needs to Know about the Cloud” by Andrew McAfee, which appeared in the November 2011 issue of Harvard Business Review (HBR).

Next post: What is cloud computing?