Cloud Consumption Model Countdown: The Top 10 Insights (part 1)

I have a confession to make - I love the surge of best-of lists that get published at the end of every year.

I think they’re a great way to reflect on the year behind us, and to contextualize what’s coming in the year ahead. Because of my fondness for lists, I was excited to see this recent Cisco and Intel study on cloud consumption models, where 4,226 IT leaders in 18 industries were surveyed on IT’s relationship with the cloud.  The study covered the past, present and future projections of how IT will be utilizing cloud computing models in the upcoming year. For the sake of brevity, I split this list of Top 10 Cloud Consumption Insights into two posts - I hope you enjoy the first 5.

- IT Peer Network Administrator 

Insight No. 10: A Wake-up Call for IT.

Respondents foresee both growing influence for LOB (line of business) decision makers, as well as a leadership role for IT. They also anticipate a greater focus on metrics such as return on investment, and, ultimately, on improved business outcomes. Shared accountability for business outcomes may become the norm for IT. Yet many IT leaders expect to retain (and indeed, increase) a reliance on traditional funding mechanisms such as chargebacks, which could curb adoption of innovative capabilities, positioning IT less as an enabler of growth and more as a conventional cost center. This is just one example of how the operating models of old may conflict with emerging expectations from the LOBs.

To be sure, the bar for how IT adds value to the organization is being raised. The growing influence of LOBs should serve as a wake-up call for IT: the ability to move at speed, to foster innovation, to enable new end-user experiences, and positively impact business outcomes in a measurable way will be instrumental.

Insight No. 9: A Renewal of the Business-IT Partnership.

Whether centralization and greater resourcing for IT is realistic remains to be seen. What is clear, however, is that IT and the LOBs will shape IT consumption together, and to a far greater degree than ever before. As LOBs look to partner with an IT organization that is both flexible and business savvy, attempts to mandate monolithic, top-down consumption models — that is, from IT to the business — may prove less viable.

While the IT respondents do not envision a diminished role for themselves, retaining a central role will require an increased level of partnership with the LOBs across all stages of IT consumption.

Insight No. 8: Lines of Business Are Gaining IT Influence.

The influence of lines of business (LOBs) will extend across all IT lifecycle stages and create unprecedented complexity for IT organizations as they grapple with security issues and technical support across far-flung organizations. Overall, 44 percent of IT funding is already coming from LOBs, either directly or as chargebacks to IT. Sixty-nine percent of respondents believe that authority over buying decisions will increasingly reside with LOBs.

Given the much-increased influence of LOBs across all lifecycle stages, it is imperative for IT to rethink its strategy. Indeed, LOBs can no longer be considered as buying centers alone. The LOBs are clearly moving into areas such as planning and governance, and IT will need to partner with them on a deeper level than ever before.

Insight No. 7: IT Views Itself as Being Front and Center.

IT leaders in the survey believe they will retain much of the oversight and authority that has characterized their relationship to the business in recent years. Indeed, increased centralization and coordination of IT resources is top of mind for respondents. Fifty-six percent saw IT becoming more centralized (in Asia Pacific, this rose to 79 percent), rather than more fragmented as LOBs’ role in IT consumption grows.

Insight No. 6: There Is No “One-Size-Fits-All” Approach.

The cloud market is evolving rapidly, and companies today can choose from many different approaches for sourcing, deploying, and operating cloud solutions. There is no “one-size-fits-all” approach. Rather, companies will need to formulate an approach that enables them to meet the overarching goals for their organization.

In crafting their strategy for cloud, IT leaders should consider how they can best partner with key stakeholders, such as the LOBs and third-party providers, to pursue an approach that is tailored for their unique needs.

In our next installment, we'll count down the top 5 insights from the cloud consumption study!

In the mean time, check out Intel's planning guide for virtualization and cloud computing.

In the comments, or on Twitter, tell us: What has changed your view of cloud computing over the past year?

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