CIO Summit: Coming to grips with the future of Cloud computing

Vendor consolidation, Outsourcing 3.0

The challenges faced by the chief information officer of 2015 will include changes to outsourcing, a winnowing of the number of Cloud vendors and increasingly converged IT, according to IDC's Chris Morris.

Speaking at CIO Summit 2011 in Sydney, IDC's Asia Pacific Cloud services and technologies principal analyst said there are four trends set to change the Cloud model forever.

The first was 'Outsourcing 3.0' — the Cloud evolving to include integration with services built on mobile devices, mobile applications and information analytics.

"If you just assume that the Cloud is a place to put your application in, or replace infrastructure than you are going to get left behind," Morris said.

See all the action from the event in the CIO Summit 2011 slideshow.

According to Morris, Outsourcing 3.0 will mean that by 2015 the Cloud will be just another tool in the CIO's toolkit.

"Outsourcing 3.0 using the Cloud would have a full portfolio of services from commodity to mission critical services, and because of that service management plays a critical part of the IT service cycle," he said.

"Just as we do in outsourcing, playing close attention to due diligence — where you check if the provider has long term status for your organisation — becomes very critical."

The second prediction is the hybrid environment of public and private Cloud will evolve and converge to include data centre transformation.

"There is a long way to go with data centre transformation, as the target for large enterprises is 100 virtual machines per server by 2012," Morris said. "We are getting there, because 2010 was the first year where more applications were deployed in a virtual machine environment than deployed in physical server environment," he said.

However, CIOs need to look at a different architectural approach because the deployment is taking place in systems based on older technology.

"The network and storage is being overstressed by the number of virtual machines and the ROI is not being addressed," Morris said.

Morris also predicts that the provision for 'Big Data' will become part of the Cloud suppliers' portfolios.

According to IDC statistics, in 2010 9.8 exabytes of disk storage was bought by Cloud service suppliers in the Asia Pacific.

"The Cloud service provider has a big part to play in this as they have the relationships with the storage providers that are on demand," he said.

He added that the supplier portfolio will change, as there will be fewer suppliers but each of those suppliers will offer more services.

"By 2015 public Cloud will probably be more important than virtual private Cloud because those security and reliability levels will have come up and there will be 80 per cent of new applications developed for public Cloud," Morris said.

"Your future will depend on your ability to source and manage these applications from a public Cloud environment.

"You as a CIO are going to be dealing more with Cloud service hosters, far fewer technicians, and the vendors are going to vanish. We predict that up to 35 per cent of your key vendors will be 'Wiki[pedia] trivia' by 2015."

According to Morris, many vendors will be taken over because they have good reach and a strong customer base in the Cloud market. Finally, the Cloud skills base will change as IT operations become sourcing organisations that manage technology and technicians

"If you are looking at the future mix of an organisation, it would be 80 per cent technicians and 20 per cent management. That means you need to retrain and reskill people who can manage services."

Morris said that as chief information officers offloaded more services into the Cloud, they had the potential to be more agile and concentrate on running the business.

Follow Hamish Barwick on Twitter: @HamishBarwick

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