The Corporate Datacenter is Dead

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A few weeks ago I attended the Puerto Rico CIO & IT Leadership Conference. Fred Thiel of Thiel Advisors, Inc. was one of the speakers, and during his talk he emphatically declared “the death of the corporate datacenter.” Various CIOs in the room looked incredulous, especially those that always start a new software project by purchasing additional hardware, even before gathering requirements. Thiel’s statement stayed with me.

Last week I received a copy of an IDC eBook sponsored by Microsoft called Part 1: The Booming Cloud Opportunity. In the eBook IDC states that the Public Cloud is growing six times the rate of IT spending and that by 2017, two-thirds of Global 2000 CEOs will have digital transformation at the center of their corporate strategies. Impressive numbers, but what about non-2000 companies, specifically mid-market companies—are they embracing the cloud? Even more important, how should they be embracing cloud transformations?

According to IDC 57% of CIOs see themselves as Chief Innovation Officers within 2 years. I would have hoped to see a greater number here, such a low number indicates CIOs are not seeing the writing on the wall: modern CIOs are all about innovation for the business. As CIOs, your job is no longer to manage the corporate datacenter, your job is to improve the business through technology innovation. This is particularly important at mid-market companies where the stakes are higher and budgets are lower.

In order for CIOs to become Chief Innovation Officers they first have to delegate part of their responsibilities, and it all starts with the cloud. Why manage an Outlook server? Use a cloud email service like Office 365. Why worry about patching all your database servers? Use a database cloud service like Amazon Relational Database Service. Worried about security? Your corporate datacenter is NOT more secure than the public clouds.

All CIOs should be planning their software applications cloud deployments to create more time their new innovation duties. What applications can you move to the cloud and have managed by your partners?

If your plan is to buy additional hardware for your organization this year, you are probably doing something wrong. Instead of doing on-premise capacity planning, you should be downsizing your capacity and finalizing plans to move your software systems to the cloud. Maybe you are not ready to deploy the majority of your software to the cloud, but if you don’t start now, how will you drive future innovation?

Once you liberate yourself from having to manage and maintain your applications you will be in a better position to plan for the digital transformation of the business. Remember, CEOs will expect digital transformation to begin with their CIOs. CIOs that don’t innovate and drive the digital transformation of the business will probably be replaced or demoted in the executive chain of command.

Instead of thinking about the corporate datacenter, CIOs should be thinking about innovation. For example, how to implement machine learning in the business to automated decisions and recommendations. Remember the corporate datacenter is dead, digital innovation is the future of IT.

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