Friday, March 30, 2012

The Changing Roles of CTO, CSO, CFO and Consultants with Public Cloud

One of the most fun aspects of hosting The Cloudcast (.net) podcast is that we take a completely vendor-neutral and technology-neutral stance on what we discuss and who we invite onto the show. Lots of learning and lots of great discussions. And occasionally we ask a few questions and find some interesting needles in the haystack that we didn't expect. [APIs, data analytics and the business models they enable are top of mind for me these days]

This is exactly what happened on this week's show with Mat Ellis (@matellis), CEO of Cloudability. I had learned about his company while doing some research for a blog I'd written about emerging Cloud Management vendors and trends. At first look, I thought Cloudability looked interesting because they seemed to make cost management for public clouds very simple. I thought we'd have an interesting conversation about comparing the costs between different cloud providers, some unknown cost horror stories and maybe dig into some of the analytics

As we got to talking about some of the interesting trends Mat was seeing from his customer's use of public cloud services, he commented on the changing role of the CFO (paraphrasing):
In the past, the CFO was often the gating factor to IT projects because they tried forecast long-term ROI without understanding the impact to the business. They had the power. With public cloud, the CFO is often bypassed (early), the business likes the new apps, and now the CFO has lost his power because he isn't going to tell the business to shutdown a successful project. Then the decision becomes about managing costs to keep it running successfully.
The next interesting aspect of our discussion was around the changing role of the CTO. I originally had asked who within a business was his actual customer, expecting it to be the line of business (eg. "shadow IT"), but was surprised when he said it's almost always IT itself (paraphrasing):
With the ability to obtain or leverage IT services from the public cloud, we're starting to see the diminishing role of a centralized CTO and the beginning of distributed CTO functionality. Either as an embedded function within parts of the business, or the CTO becoming more consultant than decision maker. The lines of business don't want to wait for a single person to figure out the long-term vision for all parts of the business.
One of the interesting stories that Mat shared was about the various ways that companies are using tools like Cloudability. I would have thought the primary usage would be economic (manage costs, visibility of costs), but he highlighted a few interesting non-cost cases:

  • One company began using their service and determined that they were under a serious attack because of the neighboring customers in the cloud they were using (would have been a HUGE bandwidth, I/O bill at the end of the month).
  • Another company's IT organization was using it to monitor shadow IT within their business in various ways to manage security (CSO function) or determine how to best escalate it to management so it would be discouraged or stopped. 

The final element that I didn't expect was about the role that some cloud services are beginning to play in creating customer-centric learning communities. We're seeing more of this at facilities companies like Switch or Equinix, where proximity and volume-buying matters, but it will be interesting to watch the online companies that have access to so much B2B data and associated analytics. Will this part of their business grow to be considerably bigger than the primary service offering? It's hard to imagine how traditional IT consultants could bring that level of expertise and insight to their customers looking to move to the cloud.


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