Fortune 500 CIO: I Think Cloud is 'Overhyped'

Partners clinging to upfront payment models and a lack of understanding of the difference between true cloud and "as-a-service" has left one Fortune 500 CIO lukewarm about the cloud.

"I think [cloud] is overhyped," said Tom Peck, chief information officer of Los Angeles-based Aecom, during an XChange Solution Provider 2016 keynote address. "It’s a facade to appease Wall Street."

Peck told solution providers Thursday that his biggest beef with the cloud is that he sees too many product companies attempting to sell cloud like it's on-premise hardware and demanding upfront payments. Aecom would prefer to see cloud delivered as a subscription service with a true pay-as-you-go option, but Peck said such a model has remained elusive.

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"This doesn't make us happy, because all I'm doing is paying you a markup for something branded 'cloud,' when, in reality, it's on-premise,’ Peck said. "It's just in somebody else's premise."

Peck acknowledged during a Q&A forum with Quy Nguyen, CEO of Irvine, Calif.-based partner Allyance Communications, that part of the challenge is on the buyer side, with many end users failing to understand the difference between true cloud and Infrastructure-as-a-Service, Platform-as-a-Service or Software-as-a-Service offerings.

And while Aecom -- a $20 billion architecture, engineering and construction firm -- sees a benefit in being able to spin up compute cycles on demand and having someone else manage its infrastructure, Peck said the elasticity of cloud is often overstated.

"The cloud is only as elastic as you're willing to pay, because you still need to predict hardware and compute cycles and all that stuff," Peck said.

As long as someone else can manage the infrastructure, Peck said, Aecom is agnostic as to whether it's located in the cloud or elsewhere.

"Cut through the BS, tell me like it is, and let's get right down to solving business problems," Peck said.

Having said that, Peck said, two of Aecom's closest vendor relationships are with cloud-based customer relationship management company Salesforce and cloud and virtualization company VMware.

"I can call [Salesforce CEO] Marc Benioff today, and he’d take my call … and almost move heaven and earth to meet our needs," Peck said.

Peck praised Salesforce for providing Aecom with a total turnkey relationship, setting the company up with partners in its ecosystem capable of handling everything from implementation to mobility. Aecom is also working with VMware in the virtual desktop and information modeling spaces to come up with ways for construction companies to handle big behemoth files that consume tons of bandwidth.

Landing a Fortune 500 client like Aecom requires both top-down and bottom-up approaches that go well beyond spammy emails or glossy brochures, Peck said.

From a top-down perspective, Peck said, he's most impressed by partners who can speak the language of his business and come to him after having done their homework with specific proposals that will improve business outcomes.

From a bottom-up perspective, Peck said, connecting up with people lower down in the operation who understand IT better and explaining why your offering is superior to the technology the client is using today also has value. The challenge of the bottom-up approach, though, Peck said, is that the people the partner is speaking to might not have the ear of the CIO or other IT decision makers.

The single biggest thing a partner can do, though, to break through all the noise is to get a reference from a trusted confidant of Peck or someone who's well-regarded in the industry.

"If there's somebody I know and trust -- a reputable CIO or an executive at a company who I've done business with before -- who calls me and says, 'You should do business with [a particular partner],' I will listen," Peck said.

At least one attendee agreed that some attribute too much to the cloud.

Some clients come to Daniel Haire, a production manager with Charlotte, N.C.-based gTechserv, with an overly rosy view of the feasibility and cost savings associated with migrating all of their legacy applications to cloud.

"Everywhere you look, there's cloud," Haire said. "I don't think people really understand what it is fully."

Haire said he's often had to convince customers to stick with an on-premise or hybrid setup so that they can continue to use everything they're running right now without a major hiccup or hefty bill.