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By Jennigay Coetzer – Business Day

Cloud computing will give consumers and businesses the freedom to access IT functions from multiple service providers, using any device and pay for them as and when they need them. But it poses a threat to the technocrats who have built rigid, closely protected IT empires, and they will be forced to adapt or die.

Andrea Lodolo, chief technology officer (CIO) at CA Southern Africa says many IT managers and CIOs are afraid of the cloud computing trend because they have built large IT departments and could eventually be left with fairly empty portfolios.

“The CIO will become more of a supply chain manager who manages those that are providing the services as opposed to managing their own IT people.” He says the cloud computing trend is being driven mainly by business management because of the perceived benefits.

These include the fact that in an in-house situation companies typically outlay capital to gear up their IT infrastructure to cater for peak usage. But with cloud computing the service provider is responsible for scaling the service up and down as required by the customer.

“Companies just pay more when they use more and it becomes an operational cost,” says Lodolo. He says in SA, bandwidth constraints are currently a hinderance to moving IT functions to the cloud to any extent, but within the next two to three years this will no longer be the case.

Andy Brauer, chief technology officer at Business Connexion, says CEOs and chief financial officers are embracing the concept of cloud computing and in some cases bypassing their own IT departments to do it. “The emphasis is shifting away from the old IT mumbo jumbo,” says Brauer.

He says there is a lot of automation going on that will replace IT people with self-service cloud solutions. A lot of IT managers and chief information officers are threatened by this, says Brauer.

“They will be out of a job unless they start focusing on the business needs.” He says IT managers and chief information officers have tended to build systems based on the new technology products on offer from suppliers.

This is why companies are typically only using 20% of the functionality of the applications they have installed. “But there is a big shift, and CEOs are saying they only want to pay for what they are using,” says Brauer.

He says companies will start by moving certain functions to the cloud, and this will increase over time.  IT companies will become cloud service providers, and telecommunication companies and others are entering this market.

“The banks are already in this market, because internet banking is a cloud service,” says Brauer. Rudie Raath, country manager for technology consulting at HP SA, says CEOs are tired of waiting for their IT departments to develop systems to bring new products and services to market quickly and gain a competitive edge.

He says if they are to survive CIOs must embrace the cloud services concept, know what services are available and become a broker for these to drive down IT costs in the organisation. Otherwise their CEOs and other business managers in the organisation will purchase cloud services directly off the internet with their credit cards.

“They will be able to satisfy their needs in a matter of a few seconds by doing this,” says Raath. Paul Fick, divisional MD at Jasco Enterprise says companies will need to formulate a cloud computing strategy and look at what applications and services are available.

But it is apparent that there will be a decreasing need for the in-house IT skills that are in demand today. “If a company’s IT manager resigns it is a perfect time to think about moving functions to the cloud,” says Fick.

Jennigay Coetzer is a freelance business and technology journalist with 25 years experience, and she writes regularly for Business Day. She also runs media training and writing skills workshops, and is the author of A Perfect Press Release – or Not?, a guide to writing and distributing effective press releases, an electronic version of which can be downloaded free from her website: www.jennigay.co.za.

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