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Thought Leaders In Cloud Computing: Doug Menefee, CIO of Schumacher Group (Part 8)

Posted on Monday, Jan 24th 2011

By Sramana Mitra and guest author Shaloo Shalini

SM: That covers our discussion on collaboration. I think collaboration is one of the biggest trends in the cloud environment today. My vision is to see more desktop telepresence.

DM: I think it is just around the corner.

SM: But it has to be affordable.

DM: As a futurist, this is my perspective on telepresence. What I see is what Microsoft has done with their Connect product through the opening up their API. This is where Microsoft is ahead of the curve. With the opening up of the APIs, the entire concept of 3-D visualization is going to be a game changer, the same way that the iPad is a game changer for mobile computing.

The second thing about telepresence is the Umi product that Cisco has released, and Skype and video conferencing inside conference rooms. I think these people have got to work on accessibility. Somebody has to break the mold and say, ‘We are going to make our APIs accessible, and we are going to allow for video conferencing from multiple cameras and multiple systems.’ Somebody has to aggregate multiple video conferencing and telepresence environments. Today, all of them are taking a very hard line and keeping it proprietary. Somebody has to come out and say, We are creating a nonproprietary solution. My guess is that it is going to be Skype that will do it first.

SM: That is quite possible. There is an interesting technology that I use that is built on top of Skype called ViVu. It is a full desktop, video conferencing, slide sharing, multiskin video conferencing solution, and it is very nice.

DM: That is why I said Skype. They are already building, and they allow businesses to build such applications. You still can’t tie in a video from a Cisco environment, a video from a Polycom environment, and a video from all the other environments that are inside of it. Frankly, I think this is because of the Polycoms and Ciscos of the world. I don’t think it is because of the Skypes of the world.

SM: True. What are your thoughts on the private cloud?

DM: From my perspective, the private cloud was created to make on-premise look relevant in the context of cloud computing. Companies have done private clouds for years; it was just never called that back then. It is their data center environment that allows external access. Everything from VPNs to running intranets that are accessible from a mobile environment has always been a private cloud environment. In Schumacher Group, we always run a private cloud environment because our workforce is highly mobile and we work with global partners. Our partners log into our systems externally. So, from my perspective, when someone says, We are building a private cloud, they are just saying that they are really investing in their data center and that it is a cloud-based solution because people can access it externally through a mobile environment. That may be my misinterpretation of the how people are referring to the term. But every time I hear someone refer to their private cloud, that is what it is. It is about their exposing internal data in a secure environment and beyond their firewall.

SM: True. But I think it is kind of back to the future, going back to where we started. We started with mainframes and then went to a much more distributed environment, and now we are going back to a more centralized data center environment.

DM: Oh, yes. This is all cyclical – from time-sharing on computers and BBSs to cloud computing, before anybody even had a concept of what it would be.

SM: True!

DM: I believe that there is always going to be the CIO who really feels she has to have control over her data. I believe people who work with a lot of government contracts and those types of things, they are not going to feel comfortable putting their data in a multi-tenant environment. So, there is always going to be a need [for noncloud models]. I live by the philosophy that there haven’t been security breaches that I am aware of, or major breaches I am aware of, inside of our providers.

SM: Well, in the conversations I have had with CIOs, especially CIOs in your category, the mid-size company CIOs, some are doing private cloud because of lower cost structures.

DM: The challenge that comes into play today for cost structures is that because of all of the cloud services we have done, I have shifted a lot of costs from a capital expense environment to an operational expense environment. That will mean a lot of change management for us as an organization. I believe that the accounting rules over the next three to four years are going to have to change to address how capitalization expenses and software expenses are coming into play with software services. A lot of that is coming down with things they are doing with leasing models and so on. I will get myself in trouble if I talk too much about accounting rules.

SM: Yes.

DM: It has been a challenge. Actually, for us it has freed up a lot more capital expenditure dollars, but it has put more pressure on me as a CIO in justifying day-to-day operational dollars for the IT organization. In our organization, I don’t do charge-backs. Anything that looks, smells, and tastes like information technology hits the CIO’s budget! The reason we did that is that was that way. We will probably move into decentralizing some of those expenses. We don’t have a good way to aggregate those technology costs to see who is getting the value of everything, though it was easy for us to put it in a bucket and say, This is the office of the CIO. Again, for a mid-size company that is growing rapidly, that is going to change as we move into the thousand-plus employee market with multiple departments and service lines.

This segment is part 8 in the series : Thought Leaders In Cloud Computing: Doug Menefee, CIO of Schumacher Group
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