Tom Hogan definitely has an interesting perspective, though seems like something that HP has been pushing for a while.

I like to think of things along three dimensions for managing IT environments:
People (can be shared or dedicated),
Technology (can be standard or custom), and
Processes (can be manual or automated)

Now, you may say there is a continuum along all these dimensions, and you are right. But, go along with me for the moment..

Cloud computing implies: shared resources, standard technology, and automated processes.

Most IT shops at an aggregate (there are clear exceptions, but I am trying to make a point here) are closer to the opposite end of the spectrum, i.e.,
People are likely to be dedicated
Technology is likely to be custom
Processes are likely to be manual

In theory, cloud is an enabler, for both in-house IT Shops and outsourced service providers to dramatically reduce the operating cost and move to the opposite end of the spectrum.

In theory, there is nothing ‘fundamentally new’ in cloud computing if you abstract it enough. However, the actual realization can cause dramatic difference on how IT solutions are created, delivered, managed, etc.

In theory, one analogy that I find interesting is the airline one, especially Southwest. It is not an accident that Southwest is more profitable than any other airline, in no small part because of standardizing on 737s. However, the flip side of it is that they dont do long-hauls, esp international long-hauls.

So, the point I want to make is that cloud computing may work well for some parts of the IT, and not so well for others..

Here are some things to think about though..

1. If you are a company that already has a lot of investment in IT, you have many applications supporting many business processes, and you are looking to get the same ‘functionality’ but at a lower cost point. That is you have a ‘defensive’ strategy as it relates to IT, or to put it another way, the business and functional requirements dont change (or at least dont change a whole lot), but you want the technical and implementation components to transform to provide you a new cost point, while cloud computing seems to fit that bill very well, the challenge is in transforming the existing IT hair-ball that the customer likely has into the standards-based cloud platform. Of course, there are specific areas in your IT environment where this transformation is easier, e.g., messaging and collaboration, and maybe that is a good foothold for cloud computing to take hold. But, i dont think one should generalize to all of IT before we can at least get a clear picture of the problems we will need to solve.
(If you have only 737s, you can do only short hauls)

2. If you are an outsourced service provider who has taken over someone’s ‘mess for less, and you think that you can do the same, you will have the same issues. The issue is transformation. And more importantly, who pays for it. So, unless cloud computing providers provide ‘on-ramps’ for migrating onto the cloud platform, they may severely limit the impact of cloud computing on existing IT solutions.

3. If you are an IT shop that is willing to invest in new capabilities, either because there are processes that you can ‘automate’, or because you can open up new revenue possibilities through technology, then the cloud platform is a platform definitely worth considering from the beginning. The problem in this case is only integrating this specific ‘cloud app’ with other things in your enterprise, and that is a relatively easier problem to solve. So, cloud computing folks should focus on creating the next generation of these apps. Anticipate the next gen of IT spending and enable the alternative economics on that.

4. If you are an outsourced service provider, one way you can ‘innovate’ is by enabling these new apps on the new platform, else all you will be doing is ‘your mess for less’, squeezing squeezed lemons, trying to make lemonade, etc..
Most clients expect outsourced service providers to expose them to the new platforms, and shield the client from technical disruptions. And it is indeed the responsibility of the service provider to do that.

Happy clouding…

best,
Kannan

# Requires shift to new architectural changes including multi tenancy, security and availability

So are you saying that security and availability aren’t part of existing data centre designs?

And:

# Business value propositions – deliver efficiency, increase speed and agility, mitigation of risk, enable alignment & outcome based deployment of resources

Are these factors not also part of any enterprise design?

If the answer to both is yes, then there is no shift as you imply.

Let’s face it, the idea of cloud computing is uncomfortable for IT tinware providers and software vendors. They stand to lose a great deal of revenue and license fees by no longer being able to hold their customers over a barrel and locking them into expensive and restrictive in-house architectures that don’t respond to business demands.

Whatever any of us say, the ludicrous and ultimately self defeating re-invention of the wheel we have now where companies are forced to create platforms and environments to simply process information cannot continue.

The cloud is coming. Make no mistake about that.