In today’s commercial IT environment, CIO could stand for “Chief Innovation Officer.”

For chief information officers, having a head in the clouds — implementing cloud solutions within the company to accelerate cost savings, increase collaboration and enhance the speed-to-market process — has become a necessary job qualification.

CIOs have recognized the cloud’s opportunities for some time. Sondra Barbour, CIO of government-contracting giant Lockheed Martin, said her company has been laying the building blocks for years, designing virtualization and automated management capabilities into the company’s IT infrastructure.

“We are now assessing our internal processes and applications,” she said, “to identify areas that would benefit from being housed in a cloud environment.”

The next step is implementing a private turnkey cloud known as BlackCloud, which Lockheed and its Cyber Security Alliance partners first developed for federal agencies and are now using in the firm’s Information Systems & Global Solutions division, she said.

John George, CIO at Vangent, which is taking a lead in developing solutions for the federal government, said his company has also been ahead of the cloud curve internally. “From our perspective, cloud computing is an extension of our existing shared-services platform,” he said.

2010 was a breakout year for the cloud, but many tech observers think 2011 will see even greater gains, because of the cloud’s ability to provide companies a return on investment. Cloud has been hyped extensively. But finally, companies are seeing the dollar signs.

Innovators-in-Chief

Recently, CIOs have taken on high-profile roles as the firm’s chief decision maker in cloud efforts.

A CIO also acts as a firm’s “innovator-in-chief,” Vangent’s George said. Making the right IT investments for a company’s customers and itself is simply part of the job description, he said, and cloud computing is the “latest thing” to consider when making strategic investments.

But, part of being a CIO is not only thinking about the latest thing, but also about the next big thing, he suggested.

“In the future, cloud computing will be an enabler for applications we haven’t even thought of yet,” he said. “Our job as CIOs is to figure out what those applications are and implement them for our organizations.”

Roy Stephan, vice president of Technology Solutions at Intelligent Decisions, agreed. “As always,” he said, “it is the role of the CIO to set the direction and the vision.”

So, where should smart CIOs direct their attention now?

Stephan said it’s all about leveraging cloud computing’s economies of scale and taking a wide-angle view of the company. “Without a unified, enterprisewide view of the organization, cloud efforts will fail to meet expectations in scalability and savings,”
he explained.

To Cloud or Not to Cloud?

Aside from the obvious cost reductions, cloud migrations can also help bolster what firms take to market, Vangent CIO George said. His firm has invested in the cloud to “reduce the cost and improve the nimbleness of our client offerings,” he added.

However, adopting it wasn’t a cakewalk, and while the economic benefits now seem as obvious as strands of cumulus dotting a blue sky, there are still concerns to be aired.

“Like anything new,” George said, “we had healthy debates on using cloud technologies,” but not about return on investment, he added.

“The initial hurdles we had were around the perception that cloud environments didn’t perform as well as traditional environments,” he clarified. “In reality, we found that applications actually ran better in our private cloud.”

Debunking the worst fears of cloud skeptics is a running theme of the cloud evolution. But, some still have concerns. Or, as George put it: The three major obstacles to adoption of cloud computing are “security, security and security.”

As firms work to certify public clouds that meet security requirements for their clients, the CIOs suggested companies could take advantage of private clouds or public-private cloud hybrids for themselves.

Public clouds are popular as they allow IT managers at smaller companies to divest themselves of IT infrastructure, said Woody Hall, CIO with General Dynamics IT, while private clouds offer a tweaked version of the large-scale, off-site, Internet-powered public clouds.

“The private-cloud version tends to be used as a strategy for consolidating uneconomically decentralized infrastructure across large enterprises,” he explained, “which do not wish to share assets with others users.”

For skeptical companies with sensitive data, “trading some of the economies of scale for peace of mind” makes sense, Stephan said.

Cloud Forecast

So, how will CIOs continue to make sense of cloud computing for themselves and for the future?

“My crystal ball tells me that cloud computing is simply a step in the ‘consumerizaton of information technology’ journey,” George said, adding the private sector would be smart to take advantage of “massively scalable” clouds, which provide ever-more sophisticated technology.

Lockheed Martin’s CIO Barbour said she looks past the massive scalability to the future of private clouds, which more effectively allay security concerns and could be adopted more widely across industry.

“This means that common views of cloud computing — such as on-demand self service — will need to be tailored to ensure our cloud-computing environment aligns with our business needs and strategy,” she said.

As the technology changes — including redefining what the cloud even is — some postulate IT departments will become a relic of the past.

But CIOs say, don’t count on that any time soon.

“While it’s true that some functions will essentially become ‘outsourced’ to cloud providers,” George said, “the brainpower spent on those functions will be put to good use elsewhere creating innovative applications enabled by the cloud.” ♦