Everyone Into The Cloud
Outsourcers fear the coming Robot Revolution. Specifically, they are concerned that robots and artificial intelligence (AI) will wipe out traditional outsourcing. The reality is that the technologies behind the Robot Revolution will create the greatest outsourcing opportunity of all time…cloud services.
Cloud services are a new way to support IT…or at least a new name for support. Back in the 1960s when computers and IT were just taking off, IT was already outsourced, yet the model was clearly similar. The granddaddy of American computer services was IBM, a company that did not sell their main frame computers, but rather sold computer “space.” You could either buy slices of computers that ran at IBM headquarters, or you might have been allowed to have IBM computers onsite, as long as they remained under IBM control. Not even America’s military could buy IBM computers.
By the 1980s competition in the market changed the model, and managed facilities, equipment buy-outs, sub-contracting, subscription services and every other method of paying for IT was launched, including traditional third-party outsourcing. However, the proliferation of options suddenly made it very difficult to answer a simple question, “How many people are in IT?” Earlier, headcount would give you a simple way to measure IT growth. But contract workers, outsourced workers and “IT as a service” obscured this number and IT managers only vaguely understood their headcount. Every year IT services would change and new devices fell under the responsibility of IT. The phone PBX, ISPs, external data providers, research services, voice mail, cell phones, even printers and copiers might get thrown onto the ever-growing IT heap.
Then the Internet arrived! Just connecting a single user to your network could be a complex and expensive project. Now, you had a way that you could connect to the world and the world could connect to you. More expensive ways to connect were retired. Even sending printed documents to users was replaced by URL connection to a library of PDFs.
For overwhelmed IT workers, it was like a fairy tale. One of your many impossible tasks could finally be accomplished! By the way, have you read a fairy tale lately? They all go something like this…you have a problem, it gets solved, you expect to be happy, then you find out that no one gets anything for free. That great solution from the traveling bean salesman? It didn’t quite live up to the demo, did it?
Managing IT has been like a fairy tale lately. But not the part where Jack climbs the beanstalk up to the cloud to take the Giant’s treasures. No, we’re dealing with the part where the Giant says, “Fee-Fi-Foe-Fum, I smell the blood of…” well, YOU. Something just got dropped on the grill and it smells like IT. All of those wonderful solutions that the Internet planted throughout your infrastructure? They don’t look much like magical gifts today, do they?
Instead, it looks like a decade of living on the Internet has punched holes into every part of your firewalls. Bad guys can even attack your clients and then tunnel back through your network. Viruses, malware, phishing, Trojan Horses and ransomware are everywhere. Corporate IT departments can no longer keep up with the pace of new cyberthreats.
Of course, not all of the threats are from the outside. Not all of the protocols and technologies on your network play well together. An obscure application that some other department occasionally uses has suddenly knocked your team off the network. Is something wrong with the software; is it a faulty upgrade? Hundreds of updates must be carefully examined to find the problem. Everything takes too long to fix, costs too much, breaks down too often. But that’s not the worst of it. For every story about a million stolen IDs or hijacked tax records, you can bet that an IT career went down in flames. The perpetrators? Perhaps a small criminal ring in Estonia, or hacktivists in London, or maybe just some disgruntled teen in suburbia. Not the most formidable opposition. It might even be cyberclowns, more interested in embarrassing the corporate world than burning it down…but our cyberclowns are being replaced by professional cyberwarriors.
For years China’s government has sponsored attacks on the US and Europe. Websites have been crashed, corporate documents stolen. When the New York Times ran a series of articles on Chinese corruption, they were repeatedly and successfully attacked by Chinese hackers. The New York Times is not some small, technologically illiterate firm. Their IT department is at least as good as the average and knows a thing or two about espionage. If the New York Times can be hacked, so can you!
North Korea, upset by the politics of a recently released Sony movie, hacked Sony Pictures and the information they released led to the firing of their Co-Chair. North Korea? Not exactly an IT powerhouse. What about the real IT powerhouses like Russia? Everyone knows that Russia spends A LOT of time hacking America. By interfering in the American Presidential election without any visible penalty, we have guaranteed that Russia will try again. Thanks to a series of almost unbelievable events in Washington, the unraveling of America’s national security has been the world’s # 1 rated soap opera for 2017. The world now knows that even America can be beaten by anonymous hackers.
Every regional dictator who has ever lusted after nuclear weapons or an aircraft carrier to elevate their status will soon realize that a team of professional hackers can be bought for a tiny fraction of the cost of military weapons. The threat level is about to go through the roof, and there is little that IT can do about it. We have moved the world’s business onto the Internet, but the Internet was never built to be secure.
The Internet was created to connect a handful of research Universities, and a few thousand graduate students and Ph.D.s that worked on government funded projects. They were guided by formal ethical codes. Cybercrime? Internet trolls? Early pioneers lived in terror of a releasing a report with a mistake in their footnotes. The small community and high ethical standards ensured that even being slightly impolite could cause expulsion. The idea of security, forcing limits on data and people, was seen as a crazy idea at best and a Fascist policy at worst.
There are millions of companies around the world. Their IT departments have wildly variable technical skills. What skills they have are spread across innumerable operating systems, applications and devices. It has been impossible for IT to mount an effective defense. Until now. The answer is simple… we all need to head into the cloud!
Cloud services like Microsoft Azure and Amazon Web Services (AWS) have massive scale. JP Morgan Chase had 58,000 servers in 2014. That’s enormous! Yet, that number is tiny when we compare it to the 1.5 million servers at AWS. Amazon can buy more equipment at a lower price; has the staff to develop expertise in far more applications; and can buy the most advanced technology available (solid state hard drives and graphics processors rather than platters and CPUs). They also have on-site virus and malware experts, and have the expertise to ensure that every server runs the most current updates. One financial analyst concluded that AWS is three times as efficient as a typical IT department.
Because of their enormous scale, Amazon has developed its own management and automation tools, allowing them to do the work with a fraction of the staff. It also allows Amazon clients to add storage or CPU cycles to their environment with the flip of a switch. The uniformity of this environment plus their concentration of expertise, makes cloud services like AWS far more secure than most internally managed IT facilities. The cost is lower, the maintenance is better and the chances of surviving a cyberattack are a lot higher.
Cloud services will not solve every problem in IT, but it can elevate IT quality and security. Can the cloud cut the cost of IT? Of course it can! But more importantly, professional hackers are raising the threat level to your data. That’s a very compelling reason to use cloud services. Every IT department is facing giant problems. Your solution, and even a few treasures, could be waiting for you in the clouds.
About the Author
Chris Niccolls is a New York-based operations, productivity and outsourcing expert. As an investment banking executive, he became a voice for Wall Street offshoring, developing centres in India, the Philippines, Fargo (USA) and Bristol (UK). Chris has worked in the world’s largest investment banking, legal and insurance firms, and has developed outsourcing advisory groups for New York and London banking firms. Chris writes extensively about outsourcing, project management, process improvement and automation. Follow Chris on twitter @chrisniccolls.