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Cloud computing: Five ways it will change IT

Autonomy founder Mike Lynch on the myths about cloud computing and what it means for the IT department.

Autonomy founder Mike Lynch knows a lot about cloud computing – as he puts it “Autonomy worked in the cloud before it was the cloud”.

Autonomy -  a UK firm that was bought by HP last year - provides services to some of the world's largest companies and government bodies - including the US Department of Homeland Security, the US Securities and Exchange Commission, the Olympic Games Security Committee, the UK Houses of Parliament, BAE Systems, Ford, GlaxoSmithKline, Philips and BMW. The company, which specialises in searching unstructured data, has built a 50PB private cloud that is growing at a “phenomenal rate”, according to Lynch.

Lynch, who left HP in May, shared his thoughts on how the cloud will change business and the tech industry, for better or worse, at the Global Business Summit on ICT in London on Friday. Here's a summary of what he said.

1. Large legacy systems won't move to the cloud

Everyone seems to have forgotten the IT rule that 'If it's working don't mess with it'. Nobody gives you much credit for moving something that's working and then breaks.

If you're a venture capitalist be wary about investing in cloud version of a legacy app, such as ERP. Once a company has bought bought it they're not going to buy it again.

2. Security isn't really a big deal

As a PR issue it's massive, it's going to get more massive because we will have some disasters. Data in someone's cloud will get out.

But the reality is this bridge has been crossed a long time ago. Lynch said Autonomy has every message on Wall Street stored in its cloud and it has been stored there for some time. When there's an imperative to move to the cloud people get comfortable with it.

3. The IT department loses control of IT

What's driving the cloud is the ability of people outside of IT to buy in services, according to Lynch.

Someone in marketing who wants to add optimisation to the corporate website talks to the IT department who will say 'No' and when they do agree to do it, it will be very expensive and will take a long time to appear. Or that person can enter their credit card details and have the service up and running by next Friday.

The power has shifted from IT to the business units and that's what's driving the cloud.

Procurement is being done off credit cards and it's a massive corporate compliance issue because you can't control it. If you are in a regulated industry like pharma your systems are likely so unhelpful that your staff are going to use Dropbox or install apps off Amazon.

4. Cloud pushes down the price of infrastructure

In the past businesses bought powerful servers but if you look with people with large cloud infrastructures - the Amazons, the Facebooks - the model is based on a lot of very cheap servers.

The buying power of those companies is very powerful, if Facebook turn up and want to buy a load of servers they are in a price-setting position. So you have a small number of big buyers who are in a incredible position to negotiate because a vendor can't afford to lose that order.

5. Owning the data is key to making money in the cloud

Ownership of data in the cloud gives you the ability to put different services on that data that you can link to business benefit.

The data becomes an asset that can't be moved, because it's too large and complex, and that allows a margin to be extracted.

Salesforce.com is massive because they are amassing customer data and to build products on that data other firms have to go through its platform. Facebook has the ability to mine all of that consumer data.

There are a whole series of enterprise players looking to get hold of that data then build services on top of it.

About

Nick Heath is chief reporter for TechRepublic UK. He writes about the technology that IT-decision makers need to know about, and the latest happenings in the European tech scene.

2 comments
Deadly Ernest
Deadly Ernest

that part of the job of the IT department is like that of the HR department and the Finance department - to see that what the company does is within the laws and rules that apply to them. Part of being an top level person in all three is to be very aware of the current laws of their speciality are applicable to the company, this is an area where the bulk of the company management are weak and it's way too easy for them to have a negative impact on corporate activity by jumping into something that is in violation of those laws or rules. A case in point of the above is one I've seen in the news a few times. A senior level exec from outside the IT area finds the cabled network in his personal office restricts how he wants to lay it out. He tells IT to put in more points to plug in. This takes time to organise the cabling and the maintenance staff. The exec gets fed up of waiting and puts in a wireless point and activates the IT dept disabled wireless on his laptop to allow him to make the changes while IT are getting things organised because he feels they aren't responding to his demands. The problem is he just destroyed all the IT perimeter security because he doesn't understand how those things work, and has also just put a major contract at risk due to it's sections on minimum system security matters. The result is the exec is fired for cause when the wireless point is located. In a related incident at a company I worked for one of the top execs was sold on the idea of a particular device that would act as gateway and Internet proxy. This all in one unit is ideal for a small to medium business, but totally useless for a large business or one with high security requirements. The exec only saw it as making his Internet access easier and faster, so he pushed the thing through upper management, against the advice of the IT gateway manager who was at a lower level of management. The result was we could either have our nice a secure existing gateway or the new device as nothing we could do would get the device working with our existing system, it had too much stuff built in and we couldn't change it. The order to replace the existing gateway with one of these device at each location only got changed when two major contractors who represented about 40% of the annual income pointed out the devices would negate the security provisions of the contracts and the company would lose the contracts. The result was a pile of gear worth close to a million bucks sitting in the corner gathering dust just because a non IT literate exec got a bee in his bonnet. Just because one section of the company can benefit from a quick move or addition of something, doesn't mean the whole company will benefit or the final result will be an overall benefit. Decisions on specialist matters need to be made by the specialists - how would the marketing people feel about IT guys telling them how to run and ad campaign, yet they feel they can tell the IT people how to work IT.

sentral
sentral

I agree with the author, "dont fix it if its not broken". If legacy systems are working and will able to meet future expectations, then there is no need to move it to cloud.