EMC's Cloud Revolution Upsets Internal IT Satisfaction

EMC Vice President Global Marketing Chief Technology Officer (CTO) Chuck Hollis Monday said the changes resulting from the storage giant's own no-holds barred journey to the private cloud led to a decline in IT employee job satisfaction.

"Like any other organizational transformation there are going to be some people who get it," Hollis said. "Some people who move a little slower and some people who really don't fit into this model."

Hollis' comments came at $100 million national solution provider GreenPages Technology Solutions' 14th annual summit at the Sheraton Harborside in Portsmouth, N.H. The summit -- with the theme "Brave New World Cloud Computing: From Definition To Delivery" -- attracted some 109 IT executives grappling with budget pressures that are leading a number of them to start to make the move to cloud-based IT solutions.

Hollis said the internal IT satisfaction drop came in the second phase of the EMC cloud revolution focused squarely on mission critical applications. That second phase -- which EMC is in the midst of now -- has sparked major changes in IT jobs as the company has replaced IT management, security staff and backend IT staff.

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"During this phase, this is where org (organizational) chart issues started to come in," Hollis said. "People's jobs started to change. Younger people in the organization were being promoted over older people."

Hollis said the second phase of the cloud revolution is the "scariest" phase for IT because it changes how IT relates to the business." It changes the nature of the IT organization," he said with questions raised about how do you pay for IT as a service and prevent IT resources from being wasted.

Hollis said the second phase tasked the IT team on the "removal of the old stuff, not just adding of new stuff." He said the guiding principle for the second phase is: "No U Turns. There is no trying to keep the old aging technology stack together."

Even with all of the changes brought about by the cloud journey, Hollis said, the "aggregate level of IT" staffing at EMC is "the same or growing."

"The goals are changing," he said. "There are more business analysts. More people interacting with business leaders. More end user focused."

The second phase savings were not as great as the first phase, Hollis said, because it marks a dramatic change in how quickly IT can respond to business changes. "There is more value being created in the ability to respond quickly and the stature of the organization," he said.

EMC is detailing its own private cloud journey with a white paper and public blog posts. Overall, the company claims its cloud journey from 2004 to 2009 has resulted in savings of $104.5 million including $16.2 million operating expense reduction and an estimated $88.3 million in what EMC calls capital equipment cost avoidance. The final phase of the private cloud journey is aimed at running IT as a business.

Next: A Higher Value Placed On Internal IT

The cloud movement is aimed at dramatically reducing what has become by nearly all accounts an industry standard 70 percent of total IT budget spent on maintaining systems with only about 30 percent on IT innovation, said Hollis.

The changes at EMC, he said, are leading to a higher value being placed on internal IT with more dollars being spent on "creating value and less keeping the lights on."

"There is a general feeling across the business that we want to invest more in IT," he said. "We see the value." He said the business leaders now are looking to give more money to IT to drive innovation.

GreenPages CEO Ron Dupler told conference attendees that there simply is no avoiding the profound IT changes being brought about by cloud computing.

Dupler said the cloud changes have had a polarizing effect on IT organizations. One CIO attending the summit said there is no way to avoid the discussion of "reduced" IT headcount that comes with the move to the cloud. "And he is right," said Dupler.

Dupler said that is one reason the GreenPages team chose the "ominous" summit theme: "Brave New World." The cloud shift is here and is "accelerating," said Dupler. "Cloud is coming quick and you've got to be ready for it," he said. "It is something you have to be dealing with in your IT strategy."

Dupler said that one year ago some thought big bets on cloud computing consulting and solutions was too early. That has proved not to be the case, he said, with the cloud solutions taking hold faster than anticipated.

When Dupler asked how many of the 109 IT executives thought cloud was hot air, only several raised their hand. At last year's Summit, about 50 percent of the audience had that view, said Dupler.

When asked by one skeptical attendee what makes the current cloud revolution different than past talk of grid computing or the application service provider (ASP) phenomenon, Hollis said one reason is the impact of the economic downturn. That is leading to a big push to reduce IT costs, he said. "It feels different this time," said Hollis. "People really want to go do this thing."