CIOs Rise Again on the Coattails of Cloud Computing, SaaS

NEWS ANALYSIS: The CIO’s role was written off as irrelevant until enterprises realized they needed somebody to take charge of cloud computing and software as a service.

When the chief marketing officer, the human resources manager, the vice president of sales and the chief finance officer all tore off chunks of the technology budget, the obituaries for the chief information officer position were many and morbid.

A corporate executive without budget is soon a corporate executive without a job went the thinking. And for a while as organizations, including Gartner, proclaimed that the marketing department would soon wield a bigger tech budget than the CIO, the predictions of the demise of the CIO’s role appeared prescient.

But stealing a title from Joseph Heller’s great novel about corporate life, “Something Happened” along the way. CIOs and those with different titles, but in the top technology position have the opportunity to retrieve their status due to the very thing which was supposed to relegate them to irrelevance. Software-as-a-service and the greater cloud computing universe in general is the driver in the CIO rebirth.

The arrival of SaaS (and its siblings—platform-as-a-service and infrastructure-as-a-service) marked a far greater change in corporate computing than simply moving applications from on premise to off premise systems. The issues surrounding security, application integration and how to evaluate, license and develop software also underwent a less heralded, but in many ways more profound, change.

In the last week or so, I’ve been talking with some of those corporate technology managers, who observations, while still anecdotal, illustrate those changes. Michael Skaff, vice president of technology for Masons of California, now puts business knowledge and whether an application is available in a SaaS mode at the top of his consideration list.

Kevin Baradet, CTO of the Johnson Graduate School of Management at Cornell University, first investigates SaaS capabilities for new software before moving forward and now vendors without a SaaS offering have a very high bar to clear.

While SaaS and cloud computing in general still remains a small (but fast growing) piece of the overall technology market, the changes are starting to ripple through the entire enterprise segment.

Application integration between those applications, which remain in-house due to their maturity or unique capabilities, and off-premise applications is now a primary technology skill for the corporate technologist. Those famous, or rather infamous, corporate silos of isolated information are broken down through application integration.

A SaaS marketing application has to connect to finance and manufacturing to create that seamless flow of customer and product information that companies desire. The marketing department is not going to create that application integration, but the IT staff needs to become the application integration engine for the corporation.

Security and privacy are always much in the news. But now there are the added concerns raised by the constant flow of NSA-related news regarding data gathering. Corporate data security only works when a consistent security policy is enforced throughout the organization. This policy has to reside in the technology leadership of the organization.

Software licensing is often a dive into endless piles of legalese, which no one really understands and often ends up in a court when things go bad. Simply clicking on all those agreement screens when you sign up for a corporate SaaS application is a sure way to contract purgatory. As grim as the process may be, the head of corporate technology in concert with the legal department is the only way head off licensing tangles latter on.

The shift to a cloud and SaaS orientation will play out in many parts of the enterprise space. Oracle, Microsoft and Cisco are among the large vendors which have seen their revenues fail to meet existing or predicted expectations. It is still unclear if those expectations are off due to an uncertain economy or a corporate purchasing pause as customers start the shift to software subscriptions and cloud infrastructures. I suspect it is the latter.

The CIO, or whatever title the top corporate technologist carries, has seen a dispersal of the technology budget but is experiencing a new role as the technology orchestra conductor.

Eric Lundquist is a technology analyst at Ziff Brothers Investments, a private investment firm. Lundquist, who was editor-in-chief at eWEEK (previously PC WEEK) from 1996-2008 authored this article for eWEEK to share his thoughts on technology, products and services. No investment advice is offered in this article. All duties are disclaimed. Lundquist works separately for a private investment firm which may at any time invest in companies whose products are discussed in this article and no disclosure of securities transactions will be made.

Originally published on eWeek.
This article was originally published on 08-16-2013
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