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The next generation of cloud computing
How CIOs can help their organizations prepare for the business of tomorrow

Table of Contents
The heart of the matter An in-depth discussion Challenges to cloud computing Despite maturity, some confusion lingers The power of partnering How the CIO can lead innovation What this means for your business Contacts 3 6 8 9 9 10 11 12

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Page 2 of 12The heart of the matter
Once every five years or so a profound change flows across the IT ecosystem. In the early 1990s, the Internet transformed the way businesses communicate. By the mid-90s, ecommerce virtualized purchasing for customers and business partners. A decade later, offshoring took hold – and took a lot of in-house business functions to China, India, and other low-cost centersaround the world. Today, cloud computing is sweeping over the information technology landscape, bringing broad changes in the way IT services are designed, delivered, consumed, and managed. Demand for cloud computing – and its predecessors, virtualization and off-premise services – has been fueled by the lingering effects of the global recession, which forced many organizations to trim their coststructure (capital and operating) while still meeting customer demands. While this ―do more with less‖ mandate is still in effect at most companies, many CEOs are now asking their organizations to prepare the business for growth. Cloud computing is a strategic initiative for organizations that aims to strike the right balance between lowering costs and enabling growth. Cloud computing provides aproven means to efficiently deliver lower IT capital costs and increased operating efficiencies. Yet concerns about information security, service availability, performance, and the complexity of integration have dissuaded many CIOs. But that’s all changing. Case in point: Use of cloud-based e-mail service. While CIOs initially distrusted cloud-based enterprise messaging, today a wide range ofbusinesses, nonprofit organizations, and local governments have adopted it to cut costs. Security issues? Cloud-based e-mail is now considered safe enough for cabinet-level US federal government agencies. The General Services Administration (GSA), for instance, recently selected Gmail for its 15,000 employees in a bid to trim 50% of its annual e-mail costs over the next five years. 1 Similarly, theDepartment of Agriculture opted to use Microsoft’s Business Productivity Online Suite (BPOS) Federal cloud suite for its 120,000 users.2 Government adoption of cloud-based e-mail and collaboration tools has concluded the first phase of cloud computing. The next stage of cloud deployments has now begun as organizations discover that the technology can help create innovative opportunities for partnershipsand revenue growth. When coupled with a CIO’s IT strategy around data center transformation, service virtualization, and unified fabrics, cloud computing offers synergies that can bring a new order of competitive advantage. Forward-thinking CIOs must be prepared to lead their organization into the cloud. Doing so can create an accelerated trajectory to success — for the CIO and the entireorganization.

1
2

General Services Administration, GSA Becomes First Federal Agency to Move Email to the Cloud Agencywide, December 2010 USDA, USDA Moves to the Microsoft Cloud, December 2010

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Page 3 of 12

Public cloud workloads

Application streaming Long-term data archiving/preservation Business continuity/disaster recovery CRM or sales force automation Audio/video/web conferencingHave implemented

11% 10% 11%

7% 7% 7% 18%

19% 15% 18% 11% 9% 12% 19%

23%

Currrently plan implementation Would consider implementing in next 12 months

Source: IBM, Dispelling the vapor around cloud computing, January 2010

Private cloud workloads
Data mining, text mining, other analytics Application streaming Service/help desk Industry-specific applications Test environment...