The beginning of a new year is often a good time to review current practices and plan for thoughtful changes that drive more positive impact to the company. One of the significant cost items, that have significantly weighed the bottom-line of any company, is the capital expenditure and operating expenses of IT infrastructure, believes Dr Werner Vogels, CTO, Amazon Web Services.

It is time that companies seriously consider the resources such as cost, time and effort spent to-date on owning or maintaining those IT infrastructure and ask poignantly – Are they contributing meaningfully in differentiating your core business? Or are there better ways to manage those IT infrastructure and future requirements?

Old World of IT
It has been estimated that as much as 70 percent of time from product engineers, personnel and developers have been spent on procuring, waiting, setting up and maintaining IT infrastructure. There is also the usual long and tedious request-for-proposal process and vendor management in sourcing infrastructure-related product or hosted services that consume a significant amount of time and resources. These practices are very much the old world of IT.

The old world of IT has witnessed massive upfront investment, expensive maintenance contracts and forced upgrade that lock in companies with the existing suppliers for many years, limiting company’s ability to switch to new technologies that better fit the changing business environment. We all know that few companies pay the published price of any vendors; there is much haggling between IT and vendors just before the end of existing contract in price and terms. It is not uncommon for companies to experience the pressure of locking in a long-term contract with vendors or hosting service providers to get ‘better pricing’.

In the old world, IT was often perceived as a blocker, for example, when a line of business asked IT for a server to experiment ideas or carry out some work, you could expect answers like “it’s not possible” or “it will take months to deliver”, which adversely affects creativity and dampens the spirit of innovation.

CEO’s, CFO’s and CIO’s owe it to their shareholders to take a hard look at their existing technology infrastructure and make sure that it’s really differentiated and adding value to the company…because it’s likely costing them a lot of money and personnel’s time for a long lock-in period.

New World of IT – Taking control back
Enter the new world of IT, Cloud Computing, a new paradigm that has brought significant positive change in IT. We have seen initiatives by individual business units that are no longer taking “no” for an answer as the cloud-based infrastructure services are easily accessible by those who want to experiment new ideas or push new frontier for the company. We are seeing a shift in IT, driven largely by business units, to break away decades of old practice and mindset in order to stay relevant in the new world:
• IT will be the new business enabler: The IT department now wants to be seen as an enabler of innovation. The cloud frees IT resources from the heavy lifting of the undifferentiated infrastructure, supports innovation and allow them to focus on business critical activities.

• The computerization of IT: In the consumer world, decisions about technology are often based on functionality, offered at a price and speed that they want. New workforce and leaders embracing this new tech infrastructure come from this world where they have been in full control of their technology resources. To remain relevant, CIOs are now beginning to take control – they want the ability to choose what they want, when they want it and how much they are willing to pay. There is also a change happening in enterprise IT, being influenced by the richness of app experience available in the consumer world, which makes the old world of enterprise IT looks like science fiction. Cloud is enabling quicker app development, better integration of services with mobile devices and growing consumer apps. Ultimately, we will see an assimilation of consumer and enterprise IT, delivering a whole new set of opportunities for business, which will largely be driven by cloud computing.

• New licensing models: The transparency of price structure and flexibility offered by the cloud computing today has led to transformative change. It’s now about putting the buyer back at the driver’s seat. In the new world, customers do not want a forced lock-in. Today, cloud services like AWS allow anyone to access any combination of services at a transparent pricing structure via multiple platforms, multiple programming languages, and multiple operating systems; companies can grow and shrink the usage quickly based on business requirements, and pay for what they actually consume – because flexibility is what customer wants.

• Customers are in control: In the new world, certain cloud providers are making it easy for customers to get either into or out of the cloud – giving customer the choices to pick what best suits their needs. In short, the new world of IT puts customers in control. They have the ability to walk away easily if they’re not getting what they want, whether that’s in terms of features, performance, reliability or support.

Cloud provider’s like AWS has witnessed many early cloud adopters made good because they have the ability to test ideas quickly, drive innovation, and take their successful ideas forward to the market in a short time to grow their business.

Like many successful companies around the world that have already stepped up to use the cloud, local businesses should move quickly to harness the power of cloud in order to stay competitive in the new dynamic world.