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The End of IT 1.0 As We Know It Has Begun

Cloud computing is a shot across the bow for the giants of the IT industry

Innovation Journal on Ulitzer

The time has come to declare the beginning of the end for the traditional approach to Information Technology.  The party is over.

The End of IT 1.0 As We Know It – has begun.  To borrow a phrase from my previous IBM colleagues who wrote, “The End of TV As We Know It” with which I became familiar while working on IP Television (IPTV).

You may wonder whether it’s too early to make the call given the lack of interoperability standards, security concerns, and common definition of cloud computing.  Well, the IPTV space shares many of the same similarities – emerging technology, emerging standards, emerging adoption, varying definitions, and yet the call was made in that space.

Cloud computing is a shot across the bow for the giants of the IT industry.  They are on notice.  Certainly, some will make the transition, slowly, at the speed which the overall market develops or slower, as they have no incentive to drive the market and rapidly cannibalize their existing businesses for a less lucrative business model even if it is more cost effective, flexible, and efficient for most of their clients.

Just think of the companies that provide hardware, software, services, consulting and systems integration.  Now consider the cloud computing paradigm.

  • No packaged software to order, install, configure, test, implement, manage, support, and maintain on client premise.
  • No hardware to order, install, configure, test, implement, manage, support, and maintain on client premise.
  • No hardware and software / systems integration on client premise.

Now look at the companies that provide these services today, EMC, HP, IBM, Oracle, SAP, Accenture, Infosys, and others.  Are these giants ready to quickly accelerate the cannibalization of their own product and services offerings?  Will they transition from mega projects to micro projects?  How will many of these companies who rely upon an on-premise installed base make the transition to the much lower revenue model that cloud computing represents?

To be fair, most of the high tech leaders already have cloud computing groups, and many of the technologies that underpin cloud computing capabilities comes from these very companies.  Certainly, they face many challenges ahead as the industry further transitions to this computing paradigm.

One can easily see the giants of IT playing with other large non-IT industry leaders which will leverage cloud computing through an on premise model, and provide many custom services for those clients.

Besides, for many years to come there will still be a need for large (non-cloud) IT projects and large, financially stable companies to undertake those, that’s why it’s not the end of the end, or the middle of the end, but the beginning of the end for some companies, as not all will survive the transition.

Not to worry though, traditional IT will still be around for many years to come, even if the days of traditional IT are numbered.

More Stories By Ray DePena

Ray DePena worked at IBM for over 12 years in various senior global roles in managed hosting sales, services sales, global marketing programs (business innovation), marketing management, partner management, and global business development.
His background includes software development, computer networking, systems engineering, and IT project management. He holds an MBA in Information Systems, Marketing, and International Business from New York University’s Stern School of Business, and a BBA in Computer Systems from the City University of New York at Baruch College.

Named one of the World's 30 Most Influential Cloud Computing Bloggers in 2009, Top 50 Bloggers on Cloud Computing in 2010, and Top 100 Bloggers on Cloud Computing in 2011, he is the Founder and Editor of Amazon.com Journal,Competitive Business Innovation Journal,and Salesforce.com Journal.

He currently serves as an Industry Advisor for the Higher Education Sector on a National Science Foundation Initiative on Computational Thinking. Born and raised in New York City, Mr. DePena now lives in northern California. He can be followed on:

Twitter: @RayDePena   |   LinkedIn   |   Facebook   |   Google+

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Most Recent Comments
JulesLt 03/05/10 06:19:00 PM EST

While I can see many advantages for deployment, I don't see how Cloud computing will save clients from configuration, testing and implementation of software on site - unless businesses use 'out of the box' software packages, and adapt their processes to the software - and where they do that, they're not using IT to gain competitive edge.

A good example would be to look at the growing market for Salesforce.com consultants - there's always going to be a role for analysing and converting business requirements into a logical workflow, and confirming the solution does the job - what changes over time is the amount that is code and amount that is configuration.

The advantages of off-siting may also be exaggerated - x86 servers are getting pretty cheap these days, and increasingly easy to administer (particularly as vendors start supplying pre-configured VM images) and a well utilised local cloud may be more cost effective than large amounts of off-site bandwidth - but of course it depends on the firm.