The Rise of the Cloud CIO – A Silver Lining for IT and the Business

“The cloud will change IT as nothing before it has. It may end up removing the last vestiges of the captive IT organization that "owns" its enterprise as surely as the enterprise owns IT. CIOs are right to start addressing it now.” – The Why of Cloud, Richard Hunter, Gartner Inc., December 2011

The Rise of the Cloud

For over a decade now I have been working on software and on demand services for enterprise IT organizations. Never have I witnessed something as positively disruptive to IT, both from an operational and leadership perspective, as the cloud.

In the late ’90s the rise of the Internet and the dot com boom resulted in a heyday for IT. Spending surged and it was all about building bigger, better datacenters and powering the “move online.” In the early 2000s the bubble burst, and at Microsoft we launched Windows Server 2003 with the rally cry of “Do More with Less.” Budgets and staffing had been reduced so IT needed to be more efficient, but the model was still to develop and operate internally. The leaders who excelled were strong technically, accustomed to owning their own infrastructure, and proficient with optimizing spend and operations.

In the end of this last decade several factors aligned to fundamentally change IT:

• IT budgets were cut dramatically, and many have not come back. Budgets of less than 1 percent of revenue are now common, with much of that spend focused on just keeping the lights on, leaving little for major new infrastructure investments.
• Employee expectations of IT soared. Through their experiences as consumers with modern web services, employees got a taste of “IT done right” and brought these new expectations to work.
• Cloud became real, plentiful and went direct to the business. Key vendors like Salesforce, Webex, Workday, SuccessFactors and Concur delivered high quality, enterprise ready apps that were easy to use and deploy – and gave business leaders choices that often didn’t involve IT.

The result? Business leaders can now choose from a large number of high quality, easy to use cloud solutions to meet their needs, employees now expect all web applications to be as easy to use as Gmail, LinkedIn, or Facebook and CIOs are much more focused on the cloud.

In fact in January of 2011, Gartner published the results of their 2010 CIO survey and cloud computing was the number one area of concern for CIOs. As an indicator of how quickly things had changed, in 2009 cloud computing did not even place in the top 10 areas of focus for the CIO.

The Strategic Cloud CIO Profile

At Okta we talk to cloud CIOs every day. They are key decision makers in our sales cycles, they champion adoption of Okta and they provide us invaluable product feedback. When I compare these interactions to those I have had with IT leaders in the past I see a few key differences:

Focused on Business Outcomes

Cloud CIOs are more focused on achieving business outcomes and less on the technology required to do so. Cloud CIOs strive to deliver the service that balances cost, quality and time rather than the one that runs on their servers. With Gartner predicting 35 percent of enterprise IT expenditures for most organizations will be managed outside the IT department's budget by 2015, this seems like the right approach.

Paul Aldridge, the CIO over at Genomic Health, one of our customers, communicates this strategy in a recent article on CIO.com : "We're in the cancer diagnostics business, not back-office services. We use SaaS so IT can concentrate on things that are of value to us.”

Embrace New Technology

Cloud CIOs explore and embrace new technology that they think will provide the company with a real business advantage. They encourage their teams to be on the lookout for disruptive technologies and are not wed to “the way we have always done it here.” Whether it is championing a Bring Your Own Device (BYOD) strategy, running an iPad pilot or evaluating a new class of SaaS applications, they like to operate on the cutting edge.

Care Deeply About Users

Cloud CIOs are passionate about providing their users with a great experience. Gone are the days when users were held hostage to archaic IT methodologies. With their applications in the cloud and their users accessing apps from many different devices, CIOs must have a people centric IT strategy. Cloud CIOs optimize their technology and vendor choices to ensure that user productivity is optimized. If users want to have tablets or smartphones, then IT supports seamless and secure access from those devices.

Manage Vendors Strategically

The Cloud CIO has to provide world-class service with a smaller IT budget and thus must leverage his vendors strategically. TD Williamson is a great example of doing just that. With 1,800 people in 37 countries and a tight IT budget, the CIO, Rick Bennett, uses cloud vendors to deliver high quality, centralized support across the globe without sinking a bunch of resources into his own infrastructure. Whether an employee is in an oil field in the Middle East or back in the home office in Oklahoma he is able to provide a core set of IT services from the cloud, with high quality.

The move to the cloud is not a threat to IT but rather an opportunity to rise above the technical minutiae of the past and become a more strategic advisor to the business. Joe McKendrick, writing in Forbes, describes how the cloud is grooming the modern CIO for more strategic leadership: “But rather than replace IT jobs,” McKendrick writes, “cloud may be having another effect. In many cases, it is elevating the role of IT-savvy managers within many enterprises.”

At Okta we salute and support the rise of the cloud CIO. This fundamental shift in IT requires new skills to navigate, but also promises big opportunities for cloud-savvy CIOs to influence business as never before.