I was in Stockholm last week delivering a message on Cloud Computing.  During my visit Paul Dobson (our EMEA Marcom Manager) and I had an interesting encounter with the Editor of CIO magazine (Swedish edition).  It was a bit strange in that I found myself interviewing her instead of the other way around.  I figured if anyone had a pulse on the industry from a CIOs perspective it might be the people who take the time to write about them.  The one question that stands out to me during the conversation we had regarding Software as a Service and Cloud Computing was, “If you take Cloud Computing to its natural end state, is this the beginning of the end for CIOs as we know them today?”

Why is this question so pertinent? Because those companies who sell SaaS today are most accomplished because they sell around the IT organization, not necessarily through it.  Why is Salesforce.com so successful?  Is it because it has such a simple to use interface or the consolidation of information or the fact that the entire sales process from lead generation to customer management is all in one portal based package?  Or is it because the end user doesn’t want to rely on the age old process of building a system based on arcane IT practices that often carry with it unbelievable cycle times for deployment.  Has IT really become obsolete and those of us in the industry are just afraid to admit it?

While I was in Europe I got the opportunity to speak with many companies from all sorts of market verticals.  Small municipalities, large government, manufacturers, developers and education to name a few.  What surprised me the most in these conversations was the general lack of understanding regarding the virtualization of applications.  There seemed to be a good understanding of server virtualization but the virtualization of applications was not well understood. So I began to ponder what the future might hold in regards to how information technology is done today and how the Cloud might affect it in the future.

Combined with the research we completed for the delivery of our Citrix Service Provider program for the SMB and this anecdotal information from IT managers in the field I noticed a trend.  When a company gets to be about 100 people it starts to understand the need for IT based on organic growth of the PCs and shrink-wrap software yielding an unwieldy system of Post-It notes, IT consultants and two or three general knowledge software application “experts” within the company. An IT manager is typically hired only after the need is so great that a single individual can’t handle the work load.  And so the vicious cycle begins. 

The first IT manager is hired into a chaotic environment that is already understaffed and over budget.  As the company grows so do the needs of IT yet there never seems to be enough people to do the job and legacy systems continue to grow to keep the business growing without regard to a systematic approach to providing text book Information Technology.  CIOs are trained in this environment and as their career progresses they inherit the same problems at larger companies only on a bigger scale.  Over and over again this process repeats itself until the entire system begins to collapse from its own legacy operational weight.  The current economic conditions, although tough to stomach, have created a forcing function for CIOs and IT managers using this paradigm… change the way you do business or else.

Maybe I’m over simplifying this, but it seems to me there are only two ways to effectively “change” the way IT is done.  The first is to outsource everything in the data center including the delivery of applications utilizing web based technology.  The other is to virtualize the applications and the server farms to provide a much more efficient way to operate.  And maybe as the Cloud becomes more secure and seamless a combination of the two.  So why is there so much resistance to either or both of these approaches?

Is the Cloud the beginning of the end for CIOs?  I’m not really sure we can say today because it hasn’t evolved yet.  But one thing is for sure, doing business the same old way just won’t be tolerated any longer, either from the standpoint of the CFO or from the end user.  And the Editor of CIO didn’t seem to have an answer either. 

What still blows me away is the lack of planning and strategic thinking around the development of a private cloud that takes all of this into consideration.  I can probably count on two hands the companies who seem to be seriously looking at a Systems approach to application delivery and information technology in general.

Why is this?