If you give a CFO a Cloud

Yaron Levi

If you give a CFO a cloud,

 

He’s going to ask for ROI analysis,

 

When you give him the ROI analysis,

 

He’ll probably ask you for an executive summary,

 

When he’s finished, he’ll ask for a meeting with the head of IT.

 

Then he’ll want to look in his calendar to make sure he doesn’t have another meeting.

 

When he looks into the calendar

 

He might notice a meeting with the CEO to discuss cost reductions.

 

So he’ll probably ask for a couple of short term cost reduction examples.

 

When he’s finished making himself familiar with those examples,

 

He’ll want a business unit to try it on first.

 

He’ll start thinking.

 

He might get carried away and think about every business unit in the company.

 

He may even end up thinking about other companies as well!

 

When he’s done, he’ll probably want to drink something.

 

You’ll have to fix up a coffee for him with milk and sugar.

 

He’ll sit back make himself comfortable.

 

He’ll probably ask you to read him a business case.

 

So you’ll read to him from one of your cases, he’ll ask to see the numbers.

 

When he looks at the numbers he’ll get so excited he’ll want to add some of his own.

 

He’ll ask for a paper and pen.

 

When the business case is finished, he’ll want to sign his name.

 

Then he’ll want to make a copy, which means he’ll need to go to the Xerox machine

 

He’ll place the original copy in the machine and stand back to look at it while it copies.

 

Paper jams at the old Xerox machine will remind him that, He needs a disaster recovery for the ERP system

 

So…

 

He will ask for additional hardware,

 

And chances are if he asks for additional hardware,

 

He’s going to want a cloud to go with it….

 

 

 

Cloud computing is expected to be a significant growth driver in worldwide IT spending. In fact, cloud services are expected to grow at a compound annual growth rate (CAGR) of 27% and reach $42 billion by 2012; spending on non-cloud IT services is expected to grow at a CAGR of 5%, according to IDC. Although most of the spending will be done through IT budgets, I believe the business side of the house will be the main driver behind it.

 

IT managers spend a significant amount of their time forecasting and preparing the systems to some expected usage load, the reality however is very different. If the actual systems utilization is lower than the forecast or worse if the project has failed then most of the CAPEX that was spent on the project is wasted. Alternatively, if the project was a huge success and more users want access the system, the lack of horse power and available resources create and IT hell where once again IT is being blamed for. The cloud makes IT an enabler, not an obstacle hence it can support the business side faster and more efficiently and be equally prepared for success or failure.

 

Moving infrastructure to the cloud will allow IT to do “more with less”, reduce the time and stress that is spent on emergencies (especially off business hours and weekend’s maintenance windows) and reduce the amount of time that is spent on forecasting and justifying expenses. It is estimated that ~70% of IT time is spent on maintenance, patching and updates. How great will it be to eliminate most of that? IT People may be able to go back to work 40 – 50 hours a week instead of 80!

 

In his book, The Big Switch, the author Nicolas Carr discusses an information revolution very similar to an important change within the industrial era. Specifically, Carr equates the rise of cloud computing in the information age to the electrification in the industrial age. It used to be that organizations had to provide their own power (water wheels, windmills, technicians, engineers etc.). With electrification however, organizations no longer provide their own power; now they just plug into the electrical grid. Carr argues that cloud computing is really the beginning of the same change for the information technology. Now organizations provide their own computing resources (power). The emerging future, however, is one in which organizations will simply plug into the cloud (computing grid) for the computing resources they need. As he puts it “in the end the savings offered by utilities become too compelling to resist, even for the largest enterprises. The grid wins!”  

 

Now, how is that for a story to tell your CFO?