Is Being a Cloud Operator a CIO's Key Task?

CIO's Role Has Expanded to Include Cloud Orchestration and Operation Rahul Neel Mani (@rneelmani) • January 24, 2022

Since its inception in the 1950s-60s, cloud computing has grown to outperform every other technology platform, especially in the last 10 years. Annual end-user spending on cloud usage has skyrocketed to over $400 billion.

When Amazon was experimenting with cloud business, it was hesitant in reporting its revenue purely from cloud services. Finally, in 2006, Amazon Web Services (AWS) was launched as a full-fledged cloud computing platform to provide online services. It all began with Amazon Elastic Compute Cloud and Amazon S3 that provided large virtual computing capacity. Today, AWS delivers more than 250 services. From $3 billion in 2013, the company's revenue has surged to over $60 billion. Presently, more than 360 vendors across 21 categories are offering more than 550 platform as a service (PaaS) offerings in cloud, according to Gartner.

Public cloud services experienced tremendous growth in the last two years, despite strong macroeconomic headwinds. The global pandemic and its prolonged impact caused majority of organizations to relook at their working models as they transitioned from physical to virtual or hybrid. To support that elasticity, capacity expansion, scalability and flexibility, cloud appeared to be the only viable alternative. Be it infrastructure as a service (IaaS), software as a service (SaaS) or PaaS, cloud gained unprecedented momentum.

To comply with the increasing demand, CIO's role expanded to include cloud orchestration and operation. "Every CIO must now think of themselves as a cloud operator," Red Hat CEO Paul Cormier said at the company's 2021 user conference.

Many organizations have also employed a dedicated C-suite, high-profile Chief Cloud Officer (CCO) to harness the full power, productivity and efficiency from their cloud solutions and services. CCO is tipped as the ultimate custodian of cloud resources in an organization.

"Every CIO and their organizations need to understand that they control their own destiny in the cloud. We know how to build with the cloud in place, but now we need to know how to run our operations at scale," Cormier says.

Almost a decade ago, Marc Andreessen, an American entrepreneur, investor, and software engineer and the co-founder of Netscape, authored an essay for Wall Street Journal. "Software is eating the world," Andreessen wrote. His essay is relevant even today. Software is the foundation of any digital company's business. In the contactless world, SaaS-based applications ran businesses with less friction and a great deal of ease. As of April 2021, 33% of C-suite technology leaders surveyed indicated that their organizations are running more than 50% of their workloads in the cloud. Over the next 12 to 18 months, over 56% of the organizations are expected to run more than 50% of their workloads in the cloud at their organization.

Is it, therefore, safe to assume that CIOs have to move toward becoming cloud orchestrators or cloud operators? In my view, while cloud computing dominates the technology infrastructure stack of an organization, the CIO is a key strategist who does much more than overseeing how cloud functions. The transformational CIO is the one who collaborates with other C-suite colleagues on a host of digital strategies. They are one of the key leaders to lead the change and, with the help of emerging technologies, drive agile practices that enhance customer experience and help organizations deliver an experience par excellence. This is what differentiates companies that are investing resources in their digital transformation journey from those that have either not started or have a rudimentary approach on the same.

One of the biggest obstacles in using cloud is cost escalations over a period of time, making cost management an important aspect of cloud adoption. On average, a company allocates about 1/3rd of its total IT budget to cloud computing. The cost escalation could be due to a multitude of reasons, including:

Lack of proper cloud selection;
Poorly configured cloud workloads;
Lack of appropriate skills;
Locked in with one cloud service provider;
Wrong data migration strategy.

This is where the CIO's role as a cloud orchestrator or operator becomes crucial. "It is a CIO's responsibility to convince the CEO, and even the board to share the responsibility for proper usage of technology, which also includes cloud. Cloud, done rightly, can power both digital experience and digital optimization. Aligning with a provider who understands your business and one who can help you create the right infrastructure, is important. Business needs drive technology and not vice versa," says Wayne Sadin, lead advisor, Via Group Partners.

"Investment in cloud is strategic as it provides agility," says Sarbjeet Johal, an acclaimed cloud consultant and founding investor at The Batchery. "If your competitor is driving at a speed of 100 miles an hour and you're at 80, there's no way you can win that race. The agility gives the advantage of launching new businesses and business models. In a short term, it may be an expensive proposition, but in the long term, the TCO is lower."

CIOs moving from traditional data centers to cloud-first or cloud-native stages have to beware. "Many CIOs will now have to manage their cloud estates in a more portfolio-like manner, while driving unnecessary dependencies and vendor commitments out of the mix whenever possible. This will result in a more resilient and vibrant cloud ecosystem for most organizations. It will also increase competition among cloud vendors, while increasing choice for customers. At least that is the direction that cloud in the enterprise should be headed," says Dion Hinchcliffe, VP and principal analyst, Constellation Research.

Therefore, while the CIO's role is not only of a cloud orchestrator or operator, they have to also manage the ever-expanding role of cloud, its costs, security of the data in the cloud, and the service providers in a multicloud environment.

This article was previously published on the DynamicCIO website on Jan. 24, 2022.