Rethinking the IT organization in a cloud-first world

Is the IT department as we know it facing extinction? The historical reason for any organization to have a team dedicated to information technology was that the services that the business needed to consume were sourced, provisioned, deployed, and made accessible to the workforce. These services were hardware, connectivity, data, and applications. Now, much of that has disappeared, consolidated, or swept away by the internet-enabled as-a-service model. In turn, organizations are looking to shrink, or even get rid of their IT departments by rebranding them in some way that fits today’s modern paradigm. 

Before we draw out the conclusion of this trend, it is worth looking down memory lane to determine how we got here in the first place. 

The Compute Age came first. About 70 years ago, the world’s first business applications took advantage of the newly invented computer, typically the size of entire rooms. These gave way to microcomputers that ran rudimentary word processing and spreadsheet tools for sophisticated professionals.

Soon after, the Datacenter Age took hold as applications became more complex, connected, and centralized. IT built networks emanating from these datacenters to connect PCs. All of this infrastructure sat securely within a perimeter network.

We are now at the beginning of the Cloud Age (which has had a long lead up), where applications are now available first and foremost in the cloud, and datacenters around the globe shrink and disappear every year as servers and hardware concentrate among few hyperscalers and cloud services.

What is the IT organization’s role in this age? It needs to reinvent itself to adapt and stay relevant to the enterprise.

Brokering, not providing

The typical IT organization we are familiar with is a thing of the past. The emergence of the cloud got the ball rolling, but the ramifications of the COVID-19 pandemic accelerated the transformation unexpectedly. Instead of providing services, IT will broker them through strong governance and compliance policies. The number of people associated with the core IT group will shrink. Those involved with IT-type services outside of this core group will migrate to other business services or reskill themselves to join the core IT group.

Of course, it will take time for existing organizations to evolve to a broker-only state. Still, I don't think any new company starting today will contain the traditional groups we see across enterprise organizations.

Three tectonic shifts have combined with the forced telework through COVID to accelerate us further into the cloud age: 

1. Modern cloud applications. SaaS, PaaS, or IaaS hosted on public cloud infrastructure are now mainstream with superior performance and cost benefits compared to the on-prem alternatives. The modern versions are accessible over the public internet without any corporate office network connectivity. Advancements in these applications will further drive reduced demand for on-premises applications and reduce capital expenses. IT organizations adopting a cloud-first mentality are agile to supply technology on-demand with the flexibility to expand and contract as the business requires.
2. Zero trust is a modern infrastructure and security concept that differs from traditional methods. Breach is assumed, and the exposed network is kept to an absolute minimum. Employees never connect to the corporate network, and their application access methods are the same whether they are in the office or coffee shop. Zero trust adoption has enabled companies to operate with a cloud-first mentality, without the cost and complexity of the corporate network.
3. Cloud-based infrastructure management services. This broad umbrella covers IT managed by a cloud-hosted service, such as identity and access management (IAM), mobile device management (MDM/UEM), SD-WAN management, endpoint detection, and response (EDR), etc. Recent maturity in these platforms means the traditional on-premises management (Active Directory, SCCM, etc.) that large enterprises have needed for their PCs and mobile devices are no longer required. Those companies that have adopted cloud-based infrastructure management platforms have less management overhead, while their employees have more time for work that brings value to the business.

In aggregate, these technology paradigms ensure a flexible yet secure technology environment for businesses.

Think about a new company starting today or an existing company that has transformed itself and embraces the above paradigms. The IT group for that company will have:

• A group of architects that stitch core services together to create the business service "mesh" while defining governance and compliance policies to ensure secure service and public cloud consumption
• Service owners, operations, and support groups for those core business services

Notable is what the IT group won’t have: 

• Datacenter, server, storage, and networking teams. Apps will be SaaS-based or deployed in the public cloud using automated DevSecOps processes to deploy, monitor, and repair the infrastructure.
• Support or operation services for non-core service business-run apps, like HR or payroll services. IT will no longer own the underlying infrastructure. The services will be owned and managed by the department or business unit that owns the app.
• Office network or desktop support staff. The offices don't have a corporate network or WAN connections, so only relatively simple public internet services will be needed, which can be provided and managed by a facilities group or outsourced to third parties. During the COVID-19 pandemic, workers have survived without desktop support, so facilities groups will pick up the duties of physically installing PCs and related equipment–maybe even imaging those devices as well.

If it doesn't already exist, a new organization may be formed around the idea of "business support" or business operations responsible for:

• Centralized business-general support groups.
• In-person general support (ala desktop support)
• Enterprise-wide, business-specific application ownership, operations, and support

I haven’t touched upon software developers within this article. Depending on the enterprise, they may already be in a non-IT business function, in others, they’re part of IT just because they’re closely related. Developers who are part of IT today will transition to other business units as the reliance on “IT infrastructure” reduces and software development further mergers with the business. 

While the growth in software development and engineering occupations will continue, I can see the majority of the enterprise-related roles mutating into business analysts, business technology developer, or some other related moniker as automation, AI, low- and no-code, and other impactful trends continue to evolve the world of programming. 

Yesterday’s IT organization needed to support a wide array of services to run the enterprise’s applications. Tomorrow’s version focuses on brokering services that the enterprise needs to function, adapt, and minimize the cost of changing business models and seizing opportunities to disrupt. You have a choice to make. Going forward you can implement a cloud-first policy and help your organizations keep pace with the market and competitors, and in the process redistribute staff to other non-IT groups and assist in reskilling others to retain their business knowledge. Or you can forgo a cloud-first policy, not transform your organization, and become a drag on the enterprise.

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