The new IT manager, part 1: trends affecting IT in businessBy Larry Hawes

This research was underwritten by Citrix.

CLOUD COMPUTING

The new IT manager, part 1: trends

affecting IT in business - 2 -February 2012

Table of contentsEXECUTIVE SUMMARY 3

CLOUD COMPUTING 4

MOBILE COMPUTING 6

CONSUMERIZATION OF IT 9

SUMMARY 11

ABOUT LARRY HAWES 13

ABOUT GIGAOM PRO 13

CLOUD COMPUTING

The new IT manager, part 1: trends

affecting IT in business - 3 -February 2012

Executive summaryThe tables have turned for information technology (IT) managers. In even the largest

businesses, IT used to be able to dictate not only which computing assets would be

used by employees but also how they would be used. Those days are numbered in large

part because of three trends that are converging on organizations and their IT

departments: cloud computing, mobile computing and the consumerization of IT.

The New IT Manager is a three-part report meant to educate and advise IT managers on the latest developments within IT management for business.

Section 1 of this three-part report describes and quantifies each of these trends,

demonstrating that they are real now, growing rapidly and perilous to ignore.

Section 2 investigates the actual and potential impacts of these trends on IT

departments and their managers.

Section 3 presents actionable strategic options with which IT managers may

respond to the new reality of corporate computing that they face.

Cloud, mobile and consumerization are not the only trends changing the business

landscape, but they are among the most pronounced in terms of visibility and impact

on business computing. In the following pages, we present research data that shows

currently high and growing future levels of adoption for each trend. We also articulate

why each trend is important, from the perspectives of businesspeople and IT staff. The

benefits gained by businesses that have already embraced the cloud, mobile and

consumerization trends — increased productivity, agility, scalability and reliability, as

well as reduced operating costs — are fueling their rapid adoption. It is important to

remember that while each trend is powerful in its own right, the confluence of the

three is responsible for the overwhelming effect they are having on IT departments

and their managers (which we will examine in section 2 of the report).

CLOUD COMPUTING

The new IT manager, part 1: trends

affecting IT in business - 4 -February 2012

Cloud computing“Quick, to the cloud!” Those words, from Microsoft’s 2011 television ad campaign, best

summarize the direction businesses are taking with their computing environments.

The virtualization of applications, platforms and even computing infrastructure by

businesses is proceeding at a rapid pace. GigaOM Pro research conducted in 2011

found that 64 percent of businesses surveyed were experimenting with, or using in

production, cloud computing technologies (see figure 1).1 Clearly, cloud computing is

already a mainstream business practice.

Figure 1: How customers characterize their use of cloud computing

The adoption of cloud computing by businesses has not yet peaked, and GigaOM

Pro forecasts that cloud computing will continue to grow rapidly for the next several

years. Seventy-five percent of respondents in the previously cited GigaOM Pro

research study said they planned to conduct two-thirds of their computing activity in

the cloud by 2016. In other words, in less than five years, the majority of business

computing will be done in the cloud.

1 North Bridge Venture Partners, GigaOM Pro and The 451 Group. 2011 Future of Cloud Computing Survey Results. June 2011.

CLOUD COMPUTING

The new IT manager, part 1: trends

affecting IT in business - 5 -February 2012

The benefits of using the cloud are clear, from both the perspective of line-of-business

(LoB) executives and employees as well as IT managers and staff.

Businesses become more productive and agile by moving computing activities to the

cloud, which translates into faster revenue recognition and greater cost reductions.

Cloud computing raises employee productivity by enabling mobile work and cross-

firewall sharing of data, information and knowledge. Both abilities speed business

process cycle execution, giving employees additional time in which to do more work.

Cloud computing also increases business agility by providing companies with a low-

cost computing platform on which to conduct both strategic and tactical experiments

that, if successful, may be quickly made operational. For example, Netflix sensed that

its business model and core physical distribution channel for the movies it rented to

customers were threatened by new competitors building online video rental systems.

Netflix began to experiment with digital movie delivery using its own data centers.

Once an online system was successfully built, tested and ready to scale, Netflix

migrated it to Amazon's public cloud, which offers improved scalability and reliability

at a lower cost.

IT departments also benefit from cloud computing in terms of scalability, reliability,

agility and cost reduction. Scalability of computing systems is easier and faster to

achieve in a virtualized environment because of the significantly reduced need to

install, configure, test and deploy physical servers. System reliability is also enhanced

because multiple cloud environments can be relatively quickly and inexpensively

established and used when a primary (or secondary) system fails. As with LoB

experimenters, IT staff can use cloud-based infrastructure and platforms to rapidly

build and test new applications. Cloud enhancement of scalability, reliability and

agility all lead to measurable cost savings for IT departments, because those objectives

can be achieved more rapidly and at a lower unit cost compared to using physical

servers deployed in an on-premises data center.

CLOUD COMPUTING

The new IT manager, part 1: trends

affecting IT in business - 6 -February 2012

The largest benefit of cloud computing adoption by IT departments is one of focus. By

outsourcing the hosting, monitoring and management of computing applications,

platforms and infrastructure to public cloud providers such as Amazon, Rackspace and

Microsoft, IT departments can shift their focus to activities that add higher value. Even

if a company chooses to deploy a private cloud environment, its IT staff can refocus on

higher-value activities by using software to automate the monitoring and support of its

cloud computing assets (to the extent possible).

Approximately 35 law firms based in the Minneapolis–St. Paul metro area have

outsourced the responsibility for monitoring and managing many of their IT services

to Element Data Group, LLC. Element uses Citrix GoToManage software to juggle the

complexity of providing remote support, network monitoring, alerting, ticketing and

inventory management services to its law firm customers. Like these law firms, when

freed from the burden of “keeping the lights on,” the IT function in any business can

explore better ways to support the organization with new, IT-driven business models,

processes and applications instead of merely keeping the company’s computing

systems running.

Mobile computingMobile computing is another growing business trend. In 2011, 38 percent of

businesses surveyed by GigaOM Pro reported using mobile phones more than in the

previous year. Moreover, 43 percent anticipated using mobile phones even more this

year (see figure 2). Based on quantitative and qualitative research, GigaOM Pro

projects that by 2015, half of all devices operating on corporate networks will be

mobile devices.2

2 Abhijeet Rane and Tavishi Agrawal. “The future of workplaces.” San Francisco, Calif.: GigaOM Pro, March 2011.

CLOUD COMPUTING

The new IT manager, part 1: trends

affecting IT in business - 7 -February 2012

Figure 2: Current and anticipated business phone use

Source: GigaOM Pro

The growth of mobile business computing is hardly surprising. The use cases and

requirements, which have been in place for years, include:

Employees who frequently travel great distances

Salespeople, consultants, repair technicians and others who are at customer and

client locations more than in the office

Managers and employees on the floor in factories, warehouses and retail stores

Work-from-home employees and those that work out of coworking spaces

What has changed is that mobile devices and related technologies (networks,

protocols, standards and applications) have become more powerful, enabling us to do

more work on laptops, smartphones and tablets.

The growth in business use of mobile computing devices has also been fueled by the

parallel growth in cloud computing, discussed earlier in the report. In fact, the rapid

CLOUD COMPUTING

The new IT manager, part 1: trends

affecting IT in business - 8 -February 2012

growth of mobile business computing would not be possible without the cloud. Most

businesses have long had employees using laptops and virtual private networking

(VPN) software to access applications and databases on the corporate network over the

Internet. However, it was not until Research In Motion (RIM) released its Blackberry

Enterprise Server and Blackberry mobile devices that businesses could offer email

access over the airwaves. RIM’s system was, arguably, the first instance of private

cloud computing used by most businesses.

More recently, employees have begun to expect, even demand, access to more than

just email from their mobile devices. Those who use the iPhone or an Android-based

phone in their private lives have enjoyed access to applications and other web services

that were not available to them at work (unless they illicitly used their personal phone

to conduct business). Consumer tablets such as the iPad and various slates running

Android have similarly conditioned people to a new mode of personal computing that

they are eager to incorporate in their work lives.

Millennial workers (those born between 1980 and 2002) are even more likely than the

overall employee population to work from mobile devices. GigaOM Pro research

conducted in 2011 reveals that 40 percent of Millennials use a mobile device for work

on a weekly basis; that figure increases to 50 percent for younger Millennials (those

age 24 or younger) surveyed. Almost a third said they use a smartphone or tablet for

work on a daily basis. 3 As Millennials continue to make up a larger percentage of the

total workforce in the near future, their work habits, including a strong preference for

working from mobile devices, will increasingly alter the business computing

landscape.

3 David Card. “Millennials in the Enterprise, Part 1: Strategies for Supporting the New Digital Workforce.” San Francisco, Calif.: GigaOM Pro, July 2011.

CLOUD COMPUTING

The new IT manager, part 1: trends

affecting IT in business - 9 -February 2012

Consumerization of ITFor most of the history of electronic computing, new computing devices, software and

practices have been deployed to businesses first and consumers later (if at all).

Mainframes and minicomputers were solely marketed to businesses and almost

exclusively to larger organizations. Even the personal computer was originally

designed, built and sold for use by knowledge workers within large enterprises.

In the past decade, the pervasive penetration of the Internet in our personal lives, the

rapid improvements of electronic devices (including mobile phones), and the

emergence of de facto, open Web standards have resulted in a commercial focus on

innovation for consumers. Many of those consumer innovations have made their way

to the workplace, where they are used without the knowledge or approval of the

corporate IT department. In effect, the introduction and adoption flow of new

computing technologies has been flipped. In a recent survey of businesspeople, 64

percent of respondents said they learn about new technologies in their personal life

and bring them to the office.4 Consumer hardware, software and design sensibilities,

usually described as Web 2.0, are changing the way business computing is done.

On the hardware front, employees are rebelling against employer-mandated use of

specific devices and operating systems. The driver of the rebellion is user experience.

Seventy-seven percent of respondents to a recent survey of workers said they expect

devices used at work to be at least as good as the ones they use in their personal life.

The first shots of this battle were fired by employees wanting to use desktops and

laptops running Mac OS in the workplace instead of corporate-issued computers

running Microsoft Windows. Skirmishes have spread to mobile devices as well, since

many employees are tired of the limitations of the Blackberry platform and yearn to

use iOS and Android-based mobile devices at work. Many businesses have fashioned a

truce of sorts with their employees by instituting ”bring your own device” (BYOD)

4 Crawford Del Prete, et. al. “IT Consumers Transform the Enterprise: Are You Ready?.” Framingham, Mass.: International Data Corporation, May 2011 (PDF file).

CLOUD COMPUTING

The new IT manager, part 1: trends

affecting IT in business - 10 -February 2012

policies and programs. A 2011 survey found that just over 40 percent of the devices

used by information workers to access business applications were self-owned, up 10

percent from the previous year.5 Expect rapid, continued growth of BYOD practices in

businesses.

Figure 3: Devices used to access business applications

Source: Frank Gens, et. al. “2011 Consumerization of IT Study: Closing the ‘Consumerization Gap.’” International Data

Corporation, July 2011.

Employees are also increasingly choosing to buy and use newer, consumer-grade

software and services to do work rather than the legacy enterprise software purchased

and deployed by their employer. Again, this revolution is driven by the superior

simplicity and usability of these Web 2.0 services as well as the need for mobile access

to applications. This movement is taking place across multiple software categories,

most notably office productivity, unified communications and content management.

The use of consumer social media and networking services in place of traditional

enterprise collaboration applications is, undoubtedly, the single largest area of

5 Frank Gens et. al. “2011 Consumerization of IT Study: Closing the “Consumerization Gap.” Framingham, Mass.: International Data Corporation, July 2011 (PDF).

CLOUD COMPUTING

The new IT manager, part 1: trends

affecting IT in business - 11 -February 2012

software substitution. Thirty percent of information workers recently surveyed said

they are using consumer social media in the workplace more than in the previous year,

and nearly the same amount said they would likely use social media at work even more

in the future.6 Many businesses are responding by deploying enterprise 2.0 software

and services, which provide the simplified user experience of Web 2.0 services without

sacrificing necessary enterprise computing attributes such as security, reliability and

manageability. Other organizations are allowing the use of Facebook, LinkedIn,

YouTube and other consumer services but only to limited numbers of employees in

specific functions, such as marketing, customer service and human resources.

SummaryWe have briefly described and quantified three important trends affecting businesses

and their IT departments: cloud computing, mobile computing and the

consumerization of IT. By now, it should be apparent that none of these trends is a

passing fad that may be safely ignored. They are very real and powerful forces that are

reshaping how and where business computing is done.

Cloud computing adoption is growing rapidly because it offers clear, measurable

benefits to both LoB and IT. Lines of business can increase their productivity and

agility — both of which translate into increased or accelerated revenue and reduced

cost — by going to the cloud. IT departments can virtualize computing systems to

achieve superior scalability and reliability and reduce operating costs at the same time.

The cloud also makes IT staff more agile by providing a low-cost platform on which to

experiment. The potentially most valuable benefit of cloud computing for IT is the

ability to refocus from merely keeping existing systems operational to higher value-

added activities, such as working with LoB partners to develop new, IT-driven

business models, processes and applications.

6 Rane and Agrawal. Op. cit.

CLOUD COMPUTING

The new IT manager, part 1: trends

affecting IT in business - 12 -February 2012

Mobile computing also provides clear benefits to businesses, especially in terms of

productivity. Employees can get more work done, because they are able to access data

and information as well as complete business process activities while away from the

office. The increasing demand for businesses to support mobility is also attributable to

demographic changes in the workforce. As mentioned above, Millennials prefer to

work on mobile devices and spend more time doing so than the average older

employee.

The consumerization of IT is accelerating both of the other trends discussed. For the

first time in the history of electronic computing, consumer usage of IT is strongly

influencing and leading business computing practices. Workers, particularly younger

ones, expect the devices and applications provided by their employers to be as easy to

use and as powerful as those they use outside work. “Bring your own device” programs

and the sanctioned use of consumer-grade Web 2.0 services by some employees are

growing corporate responses to this expectation gap, as is the procurement of

enterprise 2.0 software and services.

While each of these trends is powerful in its own right, their confluence is creating a

crisis for IT department managers and their staff. The next section of this report

examines some actual and potential impacts of these trends on corporate IT

departments and employees, including significantly increased complexity of their jobs,

a loss of control of IT procurement and policy, and the reduction of IT departments’

head count and budgets.

For further information on the new IT manager, see parts 2 and 3 of this series

(forthcoming on GigaOM Pro).

CLOUD COMPUTING

The new IT manager, part 1: trends

affecting IT in business - 13 -February 2012

About Larry HawesLarry Hawes is the founder of Dow Brook Advisory Services, where he advises

enterprise software vendors on product road map, positioning, messaging, and merger

and acquisition strategies. He has been published in Wired, InformationWeek, CNET

and many other publications. He also writes on his personal blog, Together, We Can!

His previous experience includes work as an analyst and consultant at Delphi Group

and almost five years as an IBM consultant and program manager. Most recently he

was the lead analyst for collaboration and enterprise social software at the Gilbane

Group. Larry holds a BA in Music from the University of Wisconsin-Whitewater and

an MA in Historical Musicology from the University of Michigan. He also holds an

MBA from Babson College.

About GigaOM ProGigaOM Pro gives you insider access to expert industry insights on emerging markets.

Focused on delivering highly relevant and timely research to the people who need it

most, our analysis, reports and original research come from the most respected voices

in the industry. Whether you’re beginning to learn about a new market or are an

industry insider, GigaOM Pro addresses the need for relevant, illuminating insights

into the industry’s most dynamic markets.

Visit us at: http://pro.gigaom.com