Mark McDonald

A member of the Gartner Blog Network

Mark P. McDonald
GVP EXP
8 years at Gartner
24 years IT industry

Mark McDonald, Ph.D., is a former group vice president and head of research in Gartner Executive Programs. He is the co-author of The Social Organization with Anthony Bradley. Read Full Bio

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Has your IT Strategy become obscured by Clouds?

by Mark P. McDonald  |  November 28, 2011  |  3 Comments

Just about everyone is talking about or moving into the cloud and that is ok.  But when it comes to your IT strategy, the cloud is a red herring.  A red herring is distraction, something that deliberately draws attention away from things that are more important.  In the case of the cloud, it is taking business and IT attention away from the IT strategy.

Your IT strategy becomes obscured by clouds when it dominates IT priorities, plans and projects to the point that it crowds out discussions regarding business value and IT’s capacity to create business value.  When this happens all you talk about is the cloud, how it is going to fundamentally change IT and how it will be better for the business.  That is fine, but while you are talking about the cloud your not talking about how your resources are raising business performance, executing the strategy, creating demonstrable value.

Right now the cloud appears to be crowding out everything else as shown by the figure below.  This is a brief analysis of the top 10 search terms on a popular technology website over the past year.  The chart shows the percentage of each term in relationship to the other top 10 terms.

The cloud represents an infrastructure and operations play for many IT organizations.  The expectation is that lower infrastructure costs driven by the cloud will liberate a significant portion of the IT budget by reducing server, storage and other operational costs.

Those are all operationally important.  They are the basis for a plan.  They do not constitute a strategy because they do not address the fundamental question of how the cloud creates competitive advantage for your organization.

An IT strategy that contemplates the cloud needs to have at least expect statements that cover one or more of the following:

  • The reasons behind the decision to move to the cloud and moving away from current owner/sourced/operated models.   What is the organization gaining and giving up by making this decision?
  • The abilities moving to the cloud will give the organization that it cannot get via another alternative.  Cloud technologies create flexible capacity and cost, how will those abilities be applied to products, services, operations or structure to create competitive advantage?  Does the cloud give the organization a different cost structure and therefore different price points to address new markets, customers, or segments?
  • What happens to the resources ‘liberated’ via a move to the cloud?  What are the strategies these resources can pursue? What will they deliver, do, achieve of higher value?   Returning the savings to CFO is important and creates operational value not strategic value.
  • What capabilities does this give IT in terms of agility, speed, scale, etc.?  How will those capabilities be employed to drive competitive advantage?  Do they change the pace, process, or scale of product launches, customer service or the information intensity of your offerings?

These are but a few of the questions that an IT strategy involving the cloud will be able to answer.  If these look unfamiliar or you are thinking that you are going to the cloud because it is new, cheaper, the future, something to do, etc., then you are making an operational rather than a strategic decision.

If the cloud is the hallmark of your plans for 2012 – 2015 and you cannot talk about how it creates competitive advantage, then fine you have a cloud plan.  But know that you need to answer the competitive advantage question if you hope to be strategic, otherwise your IT strategy is lost in the fog, aka clouds at ground level, and you are obscured by the cloud.

3 Comments »

Category: 2012 Cloud Strategic planning Strategy Technology     Tags: , , , , , , ,

3 responses so far ↓

  • 1 Margaret Dawson   November 28, 2011 at 10:54 am

    Thank you, Mark. Absolutely agree. I am always telling IT leaders to not let the cloud change our IT focus — set your strategic goals, figure out how you can support business metrics, identify the solutions you need, and then if the cloud is relevant for those solutions, then evaluate those cloud solutions like you would any other solution. It’s not an all or none equation, but rather the cloud should extend and augment your existing IT strategy. Now, if only companies could get over the public versus private cloud debate – but that’s for another blog :-).

  • 2 Links for December 4 2011 | Eric D. Brown   December 4, 2011 at 6:06 pm

    [...] on I2I – Incentive IntelligenceQuote: Technology is rarely the problem – Humans usually are.Has your IT Strategy become obscured by Clouds? by Mark McDonald on the Gartner Blog NetworkQuote: If the cloud is the hallmark of your plans for 2012 – 2015 and you cannot talk about how it [...]

  • 3 Jerry   December 17, 2011 at 3:51 pm

    Far too many It organizations have been suckered into building strategies around cloud solutions. Cloud though remains a solution not a strategy per se other than indirectly. Even Vivek Kundra’s federal strategy of Cloud First is still not so much a strategy for the organization as it is a technology plan.