'Server huggers' impede cloud migrations

Chipita America may be as close to a serverless company as one can find today.

Its ERP, EDI and BI systems, Office and Exchange applications and file servers are all hosted in the cloud.

About six years ago, when many IT managers were debating the merits of Nicholas Carr's book Does IT Matter?, Chipita CIO Scott Martin was moving the Tulsa, Okla.-based snack food maker's email to service provider CenterBeam's cloud-hosted platform.

Chipita, a midsize, privately held business whose product lines include Old London Melba Toast and New York Style bagel and pita chips, has since moved the rest of its core systems to the cloud.

Martin reasoned that managing internal systems doesn't provide a competitive advantage to Chipita, and that his time would be better spent focusing on business needs.

"The real difference that IT leaders [can make] is being able to leverage information to create competitive advantage in the market­place," Martin said.

Six years later, Chipita is still a pioneer in cloud adoption, and Martin still has to defend the approach in front of his peers.

"I feel like a lot of CIOs are in the process of a kind of empire-building," said Martin.

An IT empire-builder, he said, believes that maintaining in-house services helps justify his importance to an employer. Such beliefs are "really irrational and not in the best interests of the company," Martin added.

Forrester Research analyst James Staten called Chipita forward-thinking at a time when IT executives at many companies, particularly large ones, are "server huggers" who resist cloud deployments. Such IT leaders, he said, "have significant concerns about their ongoing value to the company if they don't run [IT systems] themselves."

Staten noted that many CEOs "don't know anything about technology, so their trusted adviser is the guy trying to protect his job."

Michael Barr, chair of the business psychology department at The Chicago School of Professional Psychology, agreed that fear of losing control is one reason an IT executive may shun a move to the cloud.

He added that IT executives also fear their status would change due to a perception that someone managing vendors has a lower rank than someone managing direct reports.

Martin, however, argues that by eliminating IT tasks "that are becoming commodities," CIOs can focus on being more productive. "For us, that's increasing our sales and decreasing our costs -- two things that make manufacturing companies more money."

With the move to the cloud, Chipita's IT operation can also focus on improving the company's sales tools, and on finding new ways to integrate customer information, he added.

Martin said that, in many ways, he feels he has more control and protection over his systems.

The IT operation can control the firewall, for instance, while he can work with the services vendor to ensure the system is secure. "I believe that these cloud partners really have better security in place than what you can do internally," said Martin.

Martin said he routinely re-evaluates Chipita's relationship with CenterBeam and keeps an eye on an ever-changing cloud market. He can end a contract in 30 days.

His contract limits price increases to the consumer price index, he added. "Our risk is if the market changes and those services become cheaper," said Martin, but that has not been an issue thus far.

This version of this story was originally published in Computerworld's print edition. It was adapted from an article that appeared earlier on Computerworld.com.

Copyright © 2011 IDG Communications, Inc.

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