Analyst: Cloud computing will change the way companies do business

Speaking at the recent Gartner ITXPO event in Sydney, Gartner senior vice-president for research, Peter Sondergaard, told the audience that cloud computing, in conjunction with social computing, context-aware computing and pattern-based computing strategies, are set to redefine traditional IT paradigms that focus on maintaining and optimizing technological services. Instead, IT departments will use these new technologies to help businesses grow by cutting costs and generating revenue.

Sondergaard said businesses are facing an economic period that demands their full commitment to cutting costs while maintaining, and often improving, their services. The extended recession throughout the international economy has created an atmosphere of uncertainty in the enterprise, forcing businesses to reduce budgets without sacrificing efficiency or product quality. As a result, organizations are turning to IT departments to become a front-line business enabler. This is leading to the wide-spread deployment of new technologies, with cloud computing among the leading innovations, Sondergaard explained.

When discussing the cloud, social computing, context-aware computing and pattern-based computing, Sondergaard said "each will be disruptive in its impact on IT. Combined, they’re an unimaginable force that will impact not just IT and the IT industry, but the capabilities of business and governments.These four trends are diametrically opposite to the focus of IT organizations from the last 20 years - a focus that has primarily been on using IT to optimize your process and cost."

Sondergaard went on to liken information to oil in coming years, calling it a commodity that businesses will depend on and use as a utility. Despite this heightened value on information technology, Sondergaard told the audience IT budgets will likely be limited in growth through 2014. While budget expansion should match inflation rates throughout the global market, they will likely struggle to go beyond that. As a result, Sondergaard warns, CIOs will need to integrate cost-reducing technologies, such as cloud computing, to be successful in the enterprise. Though budgets will not grow, businesses are increasingly turning to IT to generate revenue and bring profits to the organization.

In order to adjust to this new role in enterprise environments, Sondergaard said, CIOs need to think creatively, finding ways to deploy revenue-generating technologies and gain a leadership role in businesses. Gartner research found 65 percent of global CIOs expect IT to become a significant strategic influence in many businesses. Gartner Managing Vice President Ian Bertram went on to say that CIOs would need to consider an elaborate role reversal in order to adjust to these changes.

Typically, CIOs facilitate growth by installing new technologies, cutting costs and improving compliance and security. However, the cloud and other computing methods demand innovation at the end-user level as well. Bertram essentially said that traditional software systems, designed to last for an extended period without becoming obsolete, are fading out of prominence in businesses.

Therefore, CIOs are forced to split their planning into three stages, giving more control to the user. The first stage deals with compliance and other legal issues, as CIOs must regularly record and monitor the use of programs, data and other information technology items in the enterprise, which Bertram called a system of records. He said CIOs must also install a system of differentiation, allowing them to manage the costs and budgets associated with a cloud computing solution. The final step, however, forces CIOs to give more control to the end user, as systems of innovation are installed, allowing employees to obtain and deploy applications based on needs that arise in their daily work.

The words of Sondergaard and Bertram clarify cloud computing's role in the enterprise over the next few years. Essentially, the cloud is a disruptive, process-altering technology that will drastically upend traditional business and technological models.