Cloud computing will kill the IT department. True or false?

I know this might not be a comfortable topic for everyone, but we have to talk about it.

What if the cloud becomes the primary data center, and SaaS is the only way applications are sold? Will there be a need for an IT department?

This blog won't come up with the answer, but an open dialog is always healthy. This topic comes up frequently, and depending on the day and with whom I speak, the viewpoints are very different. I encourage you to post your thoughts and let's discuss them.

There are two very different sides to this topic. Let me try and represent both for your consideration.

IT departments are toast:

The cloud is quickly transforming how information is stored, processed, and managed. Gone are the days of companies needing large data centers, with thousands of servers and an army of people to manage them. Gone are the days of ridiculously complex software customizations, integrations, and teams to manage local applications. There will be no need for most of the IT roles that exist today. The technical experts and developers will mostly work for the companies who make the software or provide the infrastructure. The small IT team will still coordinate activities and manage vendors, but the business departments will run the show and interface directly with the vendors. It's not shadow IT, because the IT department of the old days is gone!

It's going to be as simple as online shopping and banking. Need an ERP system of CRM? No problem, here is what you do. Visit the web site and select new customer sign-up. Enter in all your corporate information and company details, select the plan size such as the 70,000 user plan. Then select all your integration SaaS vendors such as banking, corporate reporting, and HR system. For an additional fee, select the option to automatically create a data warehouse and business intelligence reporting system. Enter a PO number and verify payment. Then, within about an hour, the system is online and in production.

The cloud is just another technology to be managed:

IT departments aren't sitting around wondering what the next project will be. We're all very busy, with years of projects queued up. The global economy is rapidly changing, and on a daily basis it's getting significantly more challenging and complex to run companies of any size. Well managed IT departments are spending more time on business initiatives that drive the company's growth and revenue instead of work that just maintains the status quo. So the cloud is great -- and the right direction -- as it allows a shift from lights-on type work to more value-add work.

However, the cloud is just another technology. Sure there is less work to do with servers and storage, but it will be a very long time before the impact is substantial enough to make a difference. There will be situations that require cloud services, and situations that require work to be done in-house. It won't eliminate the IT department, or most of the roles. Over time, the cloud might even increase the IT department's headcount needs. Think about the major shifts that have happened in the past. Standalone to the Internet, mainframes to servers, PCs to tablets, and phones to smartphones—each was supposed to make things easier, but instead it seems each has added to the complexity. The cloud will do the same.

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