Labcast: Cloud Adoption Challenges and Opportunities

In this week’s Labcast, Justin Pirie, Cloud Strategist at Mimecast, sits down with OpenView to discuss cloud adoption — common misconceptions and challenges, its impact on roles and responsibilities in IT, and suggestions for successful adoption and implementation.

Please listen to the podcast below:

Labcast 75_ Cloud Adoption According to Justin Pirie

Kevin: Hello and welcome to OpenView’s Labcast. I’m Kevin Cain, and today I’m joined by Justin Pirie. Justin is a SaaS and cloud product managing specialist, and today we’re going to be talking about cloud adoption with end users and clients.

Hey Justin, thanks for joining me today.

Justin: Hey Kevin, great, thanks for having me.

Kevin: So as I mentioned a second ago, we’re going to be talking a little bit about cloud adoption today. Cloud is one of those terms that you hear floated around a lot these days, and even if you’re not in IT, it’s something that’s really on the tip of everyone’s tongue. So my first question really is: What’s the biggest misconception out there about cloud computing for people like me, who don’t know a lot about it?

Justin: Well, I think it depends on who you’re talking to. Typically, I think your audience is mostly SaaS businesses, people in the SaaS business and SaaS professionals.

Kevin: Sure. Exactly.

Justin: My name’s Justin Pirie. I work at a company called Mimecast. We’re one of Europe’s largest software as a service companies. We have about 1.4 million users, spread over 5,500 customers. So, I approach this whole podcast with that in mind. Having convinced 5,500 companies to use our services, and dealing with the process that we have to go through, particularly with IT, to get that adopted. So, probably the biggest misconception about cloud computing, from an IT buyer’s perspective, is that it’s going to do me out of a job. They suddenly think that just because they can buy something as a service, which they used to do manually or with a combination of hardware, software, and skill, that they’re going to be out of a job.

The reality couldn’t be further from the truth. Mark Field from DataSwitch – I forget where he’s from – he said to me, the best piece of advice his boss Ella gave him once was you could do yourself out of a job every year. If you’re not doing yourself out of a job, that means you’re stuck doing the same things, and you become a human hamster on a treadmill. So we’ve got to enable people to step out from the mundane and the time consuming and the stuff that doesn’t help their business, and empower them, IT people in particular, to do more with less and use cloud services to empower that transition.

Kevin: Sure, absolutely. So, picking up on that theme, are there other ways in which cloud is impacting the roles and responsibilities of IT departments? It sounds like it’s possibly leading to a significant change.

Justin: Absolutely. And I think there are two pieces here. There’s cloud bought by IT, and there’s cloud not bought my IT. What we’re seeing is a massive shift in the way IT is bought. Gartner predicts that the CMO will spend approximately 30% to 35% of IT budget in 2015. So, within the next 3 years, 30% of IT is going to be bought by the CMO. Gartner also thinks that there could come a stage later, between 2015 and 2020, where the business buys more IT than IT does. What cloud has done is it’s empowered end users to buy IT-like functions, on demand as a service. And that could be Dropbox. It could be Box.net.

The original poster child is Salesforce.com, because the CRM implementation had gone wrong, and the sales team needed a CRM. So they bought Salesforce.

The challenge with that is that end users aren’t necessarily known for their skill in selecting IT vendors, and the challenge for IT people is to move as fast as the business wants it to. So what we’re seeing is we’re witnessing this almost head-on collision between IT and the business right now. What IT needs to do is it work out what it’s there to do.

Ray Wang had a really good post recently about the four types of CIO. Did you see that?

Kevin: No, I didn’t see it actually. Where can we get a look at it?

Justin: He talks about the four personas of the next generation CIO. He talks about the Chief Integration Officer, the Chief Innovation Officer, the Chief Infrastructure, and the Chief Intelligence Officer. If you think about that quadrant, there are all these different facets that the CIO and IT teams need to deliver to the business. And the challenge today for many IT teams is that they have a single person or single people left to deliver all those functions. So, what we need is businesses who are focused on, and more IT teams that are focused on delivering innovation to the business, that the business can leverage, while still maintaining the data custodianship and the steady state, the security that a business demands.

So the challenge is that if people buy IT willy-nilly, just go out there and buy random [inaudible 05:40], the business actually loses control over its data, because for many businesses they don’t actually know where it is. So what we need to do is get to a point where IT is in a comfortable enough position to buy and provision and manage cloud services in a dynamic and innovative enough way that makes the business happy. People don’t want crappy tools anymore. They want the good quality IT that they are used to having at home. So, cloud computing is dramatically changing this.

Kevin: So how do you see, then, the fact that 30% of cloud implementations are shadow IT playing into all of that. I think that’s a stat that Forrester provided.

Justin: Where I got to with that stat was is they reckon that approximately 80% of the businesses they surveyed, U.S. based companies, were using some form of cloud computing. We’ve seen a steady rise. In 2010, when we did a survey, it was 56%, and then it went up to nearly 70% in 2011. So, 80% sounds about right for some form of cloud computing. So, what they did say then was that only 48% of those implementation were sanctioned by IT. So if you subtract 40 from 80, you get over 30% of cloud implementations, of cloud users unsanctioned by IT.

And the challenge there, for IT people, is that effectively they’ve lost control over an organization’s data. You can’t disable access when somebody leaves the company. You can’t prevent somebody from taking that data. As we shift to a more IT based economy, where the IT that the business owns and the service they deliver is the core value of a company, losing that control, I think, represents a significant to any business.

Kevin: Sure, absolutely. So, Justin, one thing that you touched on before was, rightly, that our audience here is a lot of software as a service expansion-stage companies. So, my last question is, if there are any general tips that you might be able give to our audience, and how they can be most successful with cloud.

Justin: Yeah, I think fundamentally it depends how you sell and who you sell to. So, a lot of the stuff, I sell to IT managers and CIOs, because we take the MX Record, mail is delivered through us, or if it’s not delivered through and we just do uploading for them, then we have a connection to their exchange server. So we’re a very IT net sale, and it’s not very sexy. But the reality is that there’s a decent market size there for us to go after. So, I think, for businesses like us, you have to be really crystal clear about how and who you message to about how cloud is going to improve and help them do their job. It’s absolutely not going to take away their role in life and their value. It’s just going to change.

The way I liken it to, there’s nobody using much Windows 3.1 anymore. So why would you hold onto Windows 3.1 skills? Actually, we are entering the cloud era, and we need to help IT Teams retrain and adopt the new cloud skills that will empower them to deliver for the cloud era.

Kevin: Sure.

Justin: I think the final point is if you don’t have a mission to resell, where your product is maybe a freemium or a freemium plus an up-sell, then it’s really easy to ignore the needs and pains of an IT team and go after the dream of a network effect by ourselves. So, there’s lots and lots and lots of business to be had on interfacing with on-premise [inaudible 09:52] and making IT teams more efficient and more happy. So we shouldn’t forget about that business.

Kevin: No, absolutely not. Justin, this has been really helpful and interesting. Thank you for joining us today. Before I let you go, just wanted to give you the chance to let our listeners know how they can get in touch with you.

Justin: Yeah, I mean, I’m [email protected] and @JustinPirie on Twitter. So, do feel free to reach out, and it’d be great to chat with you. Thank you.

Kevin: Thanks so much for joining us today Justin.

Justin: Thanks for having me. Cheers.

Kevin: Cheers.