Many Cloud computing evangelists believe that the conventional enterprise IT service delivery model is dead and almost buried. The new ‘IT democracy spring’ is being fueled by influences such as the ready access to user friendly public Cloud applications, perceptions of low cost and speed of deployment. On the other hand, the reality is that the vast majority of well-run enterprise IT departments were never really dictatorships, and were never comfortable being branded as such. Nevertheless many observers feel that enterprise IT is under siege, with the skies slowly filling with ‘as-a-service’ vendors circling high above, ready to make the most of the opportunities. The reality is that Cloud computing, in all its various forms, is reshaping the way both business and IT thinks about service delivery. For the first time since the advent of the personal computer, business users who consume IT services now have a real choice: If enterprise IT cannot provide them with the services they require in a speedy and cost-effective manner, they'll simply go elsewhere. This keynote session explored the transformation occurring in and around enterprise IT departments and how organisation, IT department and individuals alike can all benefit from the new way of managing and delivering IT services that modern organisations, want, need and feel they are entitled to.

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„Navigating through the Cloud‟ is a Trademark of Rob Livingstone Advisory Pty Ltd.
Cloud: Fueling the crisis
of confidence in
corporate IT?
ROB LIVINGSTONE
- PRINCIPAL, Rob Livingstone Advisory Pty Ltd, and
- Fellow, University of Technology, Sydney
Melbourne, 17th February 2011
navigatingthrougthecloud.com

2. What am I going to cover?
1. A perspective on Cloud
2. Next few years – from hype to hope, we hope!
3. Kryptonite and the Cloud
4. Democratisation of IT
5. The spectre of a Shadow IT Department
6. The shift away from the cost centre
7. Influences on your career, and those of your team(s)
8. The future is now
9. Discussions and questions
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3. 1. A Perspective on Cloud
Maurits Cornelis
Escher (1898-1972)
- most famous for
his artworks of so-
called impossible
structures, such as
Ascending and
Descending,
Relativity, his
Transformation
Prints and more
Relativity by M. Escher navigatingthrougthecloud.com

4. 1. A Perspective on Cloud
It all depends on your perspective…
• No absolutely precise definition,
although the NIST definition is a
frequently quoted definition
• No universally defined and
adopted standards
• It can mean different things to
different people under different
circumstances
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5. 1. A Perspective on Cloud
Definition:
Cloud computing is a model for enabling convenient,
on-demand network access to a shared pool of
configurable computing resources (e.g. networks,
servers, storage, applications, and services) that can
be rapidly provisioned and released with minimal
management effort or cloud provider interaction
• US National Institute of Standards and Technology‟s (NIST)
definition
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6. 1. A Perspective on Cloud
Cloud is about getting from one place to a better place,
…. however ….
The challenge is to know the risks and the endpoint with certainty
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7. 2. Next few years – from hype to hope, we hope!
“There are known knowns. These are things we know
that we know. There are known unknowns. That is to
say, there are things that we know we don't know. But
there are also unknown unknowns. There are things we
don't know we don't know”
- Former US Defence secretary Donald Rumsfeld , 2002
Let‟s transform the Cloud
journey from unknowns
into knowns!
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8. 3. Kryptonite and the Cloud
Is this what happens
when public SaaS
meets the true facts?
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9. 3. Kryptonite and the Cloud
Risks associated with asymmetry of understanding of ‘Cloud’
between IT and line-of-business:
• While there is largely a solid understanding of what‟s inside
the public cloud „black box‟ by CIOs and those within the IT
industry, this is often not the case for line-of-business
executives and managers.
• As long as this asymmetry of understanding exists:
1. Potentially inappropriate decisions regarding enterprise
systems may be made by the business on behalf of IT
2. The full relevance and potential of cloud computing may
not be fully realised in organisations.
3. The business may not end up performing appropriate
due diligence, which may increase risk exposure
• Are you ready to manage this if it occurs in your
environment?
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10. 4. The ‘Democratisation of IT’
Good IT – Bad IT?
• Also known as the „Consumerisation of IT‟
• DOI essentially allows users in a business to be able to
implement their own systems without having to ask enterprise
IT.
• Business users, for the first time, are able to choose from a
variety of IT services without always needing to engage their
internal IT departments.
• The technologies are mostly simple, easy to use and even
fashionable with the rise of the Smart Phone and iPad.
• Essentially, if your IT department cannot deliver in a manner
that meets the business users‟ expectations in a timely and
cost-effective way the business now has plenty of other
options.
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11. 4. The ‘Democratisation of IT’
Good IT – Bad IT?
• The DOI effect provides a number of elements that, when
combined, create the perfect storm.
– Individuals have direct access to enterprise systems and
applications
– Risk of a viral cloud
• The challenge for enterprise IT comes in the form of how to
meet these new demands;
– how to handle new investment dollars, security concerns,
new vendors in the market and new skill sets within the IT
organisation in what really is a wave of innovation and a
wave of business requests
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12. 4. The ‘Democratisation of IT’
The DOI Effect and the CIO
• CIO Accountabilities (it‟s in their contracts and job specs!)
include
• governance,
• effective process design, management and control
• risk and governance
• CIOs and CFOs have a common accountability of risk,
governance, etc, but from differing perspectives
• However, CIOs are now expected to be able to a support and
manage a more chaotic and higher risk environment.
• What are some mitigating strategies?
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13. 4. The ‘Democratisation of IT’
Getting the balance right
Also, always keep in the mind the paradox of the DOI.
• DOI can foster local innovation, which can benefit the whole organisation
• DOI can transfer ownership of non-core technologies, systems etc to
business owners.
• The key is to balance the good governance, protection and maximisation of
the investment in the core technology and systems, yet allow the voice of
the users to be heard in the overall process.
But …..
• Expecting your CIO to dilute good governance over core systems and
technologies, irrespective of whether they be Cloud or otherwise, is
analogous to asking your CFO to provide rough estimates of the P&L.
Everyone always has a preference on how they should treat their revenue
and expenses!
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14. 4. The ‘Democratisation of IT’
Proactive management of the DOI
Some considerations…….
1. The secret is in effective communication, alignment and operational
engagement between IT and the business = a shared vision for the
organisation by IT and for IT by the organisation.
2. Will clarify and assign the accountabilities for all aspects of enterprise
3. Put in place effective policy frameworks that allows the non-core
applications to „democratise‟, subject to a deliberate management
decision, with a defined and effective perimeter
4. BYO End user device policy? – A diversion from the main game?
5. Manage expectation management. Today there‟s a certain set of devices
that everyone wants supported. Tomorrow it‟s going to be different with a
new set of devices on the market.
6. Work out how to deploy and embrace new technologies without breaking
the IT budget – Continually review the enterprise IT Roadmap
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15. 4. The ‘Democratisation of IT’
Implications for the business as a whole
Shifting from a centralised to a federated IT model (or even deliberately
fragmented IT function) presents a number of challenges for the enterprise:
• A local solution that is not scalable
• Facilitates Vendor predation
• Higher overall total cost of IT to the business as a whole
• Inability of integrate disparate technologies
• No single point of ownership = lack of cohesive business strategy for
technology
• Increased Information security vulnerability (increased threat surface)
• Driving a wedge between Enterprise IT and line of business
• Inconsistency of system use across the enterprise, leading to higher
training and support costs, not to mention brand consistency if exposed to
the end users / customers / outside world
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16. 5. The spectre of a Shadow IT Department
• If IT cannot deliver in a manner that meets the business
users‟ expectations in a timely and cost-effective way,
the business now has plenty of other options.
• Can lead to Shadow IT.
• Shadow IT will flourish in organisations where:
• The prevailing organisational culture is somewhat
relaxed about good governance and/or
• Where there are poor business-IT engagement and
alignments, and/or
• IT is just not meeting the real needs of the business
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17. 6. The shift away from the cost centre
• CIOs have often had to battle the perception that IT is slow and
merely a cost centre.
• The perceived speed and simplicity of cloud is shaping the
conversations across the business on the role of IT.
• As such, IT is now increasingly being expected to deliver more
utility-like services to the business – if not, the Shadow IT
department will!
• It is therefore important for IT Departments to fully understand the
cost drivers in a utility costing model, rather than the traditional fixed
„cost centre‟ approach.
• Those without a solid appreciation of cost accounting, and the cost
drivers within IT will be poorly equipped to provide meaningful
comparative cost analysis for the IT services „as-a-service‟ to the
business.
• ie: Is $50/month really cheaper than the $3Million capital
investment?
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18. 7. Influences on your / your staff’s career
Here are few thought starters on how to mitigate against any
unplanned career changes that can arise from the „democratisation‟ of
IT*:
• Read widely and be well informed about influences that are or could
impact you, your department, business unit, company /
organisation and industry.
• Start developing trusted professional networks outside of your
employer, and outside the IT community
• Broaden your skills base – especially if you are trading salary for
niche expertise
• Develop your own personal „business plan‟
* ….or anything else, for that matter!
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19. 8. Cloud – The future is now
1. Cloud technology, as with any other innovation, has the potential
to do things cheaper, faster and better.
2. Cloud has the potential to be a real game changer for the astute
3. It also has hidden pitfalls for the ill-informed
4. Understand the influences it will have on your IT career, and those
of your staff
5. To achieve the real benefits of Cloud technologies, organisations
as a whole need to understand:
• the true cost
• the value
• the risk
• when to buy
• what to buy, and
• when to exit the technology and/or switch horses.
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20. 9. Discussions and questions
Rob Livingstone Advisory Pty Ltd
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