Does cloud stifle innovation?

Even in the most advanced markets, the changes that cloud computing could make on the industry are still only just emerging

Tags: Cloud computing
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Does cloud stifle innovation? Will cloud take the skills for innovation away from the IT department? (ITP Images)
By  Mark Sutton Published  May 3, 2014

Even in the most advanced markets, the changes that cloud computing could make on the industry are still only just emerging. Cloud has the potential to dramatically change how companies ‘do’ IT, and the future shape of the IT department is unclear.

The question of whether cloud stifles innovation came to mind after reading comments made by the head of IT for General Motors in a recent interview with InformationWeek. In the article, Randy Mott of GM outlined his principles for IT, based on his 30-year career IT industry. One of the most interesting things that Mott said was that he believes firmly in in-house IT, and that cloud computing won’t help companies to develop innovation.

In the past year, GM has switched billions of dollars of IT operations and development from outsource partners to bring it back in-house, so Mott is practicing what he preaches. On cloud computing, he said he prefers systems that can be customised and integrated in-house, and that “the companies that win in their industries are the ones that figure out how to get ahead, because getting competitive advantage takes innovation, it takes creativity, and you’re not going to get that from someone who’s going to make everyone on the planet even.”

In short, if everyone in an industry is using the same systems, how can you differentiate?

At a time when organisations in the Middle East are gradually coming to accept public cloud and trying out services, mainly from big global players, it seems to be a pertinent question. How can IT add innovative value to the business if all of its applications are coming from a service provider who is selling the same solutions to your competitors?

Of course, not every organisation is going to start taking the exact same applications from the same providers and competition from cloud providers will create some room for competitive margin. Indeed, many organsations are already running the same systems as their competitors, by sticking to the same vendor templates and best practice guidelines, and avoiding customisation in their on premise IT deployments. Services divisions and systems integrators might be keen on big, bespoke projects, but for many CIOs, customisation is almost a dirty word.

Similarly, customisation of public cloud-based applications is not unheard of, and the quality of the data that you put into the application is going to have more impact than any tweaks that you might want to make to an inhouse application but can’t make with a cloud provider.

The theory is that cloud, managed services and outsourcing frees up the CIO to develop those business-changing innovations. But that also begs the question of ‘how much is the IT department responsible for, and capable of, creating business innovation?’

There will be a different answer for every organisation, based on its size, operating sector and mindset, but for my money, this is where the impact of cloud has really yet to be seen. In organisations without large IT budgets, where IT is not seen as strategic or mainly just a support function, it will be tempting for businesses to source more and more services for cloud providers and remove the cost of running IT themselves. In this instance, cloud could almost kill innovation in IT.

It is a drastic vision of how the industry might develop, but it is worth asking the question as the industry evolves:  ‘what is going to be the role of in-house IT in the future?’ Let me know what you think.

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