As an advisor to CIOs and a well-traveled CIO myself, I have come to appreciate the disruptive nature of technology innovation and the valid (and sometimes painful) introspection that it engenders.

Most of the time it comes down to being the bridge between “geek-ness” and sound business management practice. God bless our technical architects but, if it was up to them, we would be running things with a goal of technology exploration first.

Of course, we have a business to run and customers to serve. The CIO has to provide the ‘glue’ to such fiduciary necessities like internal controls, SOX, regulatory compliance, process management, security, business continuity, privacy, cost management and operational integrity.

Such things are not popular topics when talking about exciting new developments in cloud computing, social media, etc. Eyes roll when process frameworks like ITIL, CoBIT, CMMI, etc are brought into the conversation. So, among the plethora of content posted daily about cloud computing technology and enticing offers to get into new service offerings, it was encouraging to see some content about some basic management facts and considerations about the cloud.

In his recent blog post, “Operating the Cloud: the people and process questions”, The IT Skeptic wrote these refreshing words:

“Cloud computing is a popular topic right now. Some see it as a saviour technology for cost cutting but there is too much thought given to how you will connect at a technical level with a Cloud service provider. Just as important is how you will connect at a process level and at a business level. IT development and solutions staff are prone to waving these considerations away as an issue for the operations people and the “suits”, but the process and business considerations are more important than the technical ones.”

I couldn’t agree more. This is not to say that I am against new technology. On the contrary, over 33 years I have been an aggressive implementer of technology. I am also not saying that there are not well-crafted and carefully considered deployments out ‘there’. What I am saying is that, like all developments that have come before, sanity and sound management needs to be applied stringently and early. This is the fundamental purpose of the CIO: to match the mission of his/her enterprise to the capabilities necessary to carry out that mission. This has to be done within all sorts of constraints that come with people, processes, technology, cost, benefits, business imperatives, management values and beliefs.

Exploration and experimentation need not be dampened. CIOs, more than ever, must apply their guiding hands over the healthy exuberance of innovation to extract the sustainable and repeatable opportunities that the market has to offer.

George M. Tomko is CEO and Executive Consultant for Tomko Tek LLC, bringing game-changing knowledge and experience for transformational analysis and decision-making; planning and execution of enterprise-wide initiatives; outsourcing; strategic cost management; service-oriented business process management; and technology investment assessment. He can be reached at gtomko@tomkotek.com or on Twitter @gmtomko. Profile: www.LinkedIn.com/gtomko

Without a doubt, conference agendas are brimming with cloud computing boot camps, breakout sessions, keynote addresses, expo booths. On top of this are the podcasts, webinars, whitepapers, e-mails, tweets, mailers, brochures and tee shirts touting the ‘new’ technologies collectively known as the cloud.

Is there a bottom-line here, anywhere? Not yet, maybe never. And, besides, if everyone is looking ‘up’ at the clouds, so to speak, there is no ‘bottom-line’ to look at.

There once was a day when almost all computing solutions were proprietary. If you were running applications and storing data on vendor A’s mainframe, you were also using vendor A’s specific network protocols and devices, software, etc. Occasionally, vendor B would have a compatible terminal or tape drive that you could connect. What an era that was for suppliers. Customer lock-in was a great thing.

Of course, computers and related hardware, software and services cost a mint. You might spend $5 million for the latest model of mainframe back in 1980. Then there were datacenters and round-the clock support staff. Massive.

It didn’t take long for people to see that having 3 terminals on your desk, one for each different suppliers system, was not only costly, but annoying.

Are we headed for the 2010 edition of 1980? Could this be, as Yogi Berra has so aptly put it, “déjà vu all over again”?

Well, possibly. Take a look at all of the theater around the open cloud manifesto. By the time this once ‘secret’ document hit the streets, there was all manner of turmoil about how it was put together and what it said. Mary Jo Foley blogged Microsoft fights the ‘open’ fight amid the clouds:

“Could Microsoft really be objecting to increasing the well-being of mankind? I am sure many Apple and Linux users would say it’s possible, but that’s not where I’m betting the problems lie. If this is the same Cloud Manifesto Microsoft is criticizing, my guess is it’s bullet point three that is sticking in Microsoft’s craw: “Openness of standards, systems and software empowers and protects users.””

“Microsoft may be advocating for interoperability and an open process, but the company is definitely not in favor of a document that could be read as backing open-source software.”

Amazon also had their issues as Larry Dignan pointed out in his post:Amazon Web Services: No Open Cloud Manifesto for us

Google did not sign on either. Then the IBM acquisition of Sun was derailed by differences in the board room. Next, we’ll be hearing about the government getting involved.

Indeed, Bernard Golden wrote in CIO.com “Cloud Computing Meets Washington: Lots of Data Security and Privacy Questions” that:

“… it is difficult for individual companies to determine exactly what their responsibilities are with respect to data being placed in cloud environments. This has the inevitable effect of restricting cloud adoption, as many companies will choose to take a wait-and-see attitude, preferring to avoid taking stepsthat they may later find out are in appropriate, or worse, put them into non-compliance with penalty-laden laws and regulations.”

Scary. We now have a world where very few agree on things that are vital to CIOs and other decision makers that don’t get to do this stuff in a lab or on an expo center floor.

At the end of the day, here is my take at bottom-line questions, considerations and insights:

1) You are betting on ‘promises’ and potential;
2) Unless you are a start-up, or in another situation where you get something close to a ‘clean sheet of paper’, do your business requirements require large and unpredictable bursts of storage and compute power? Are you building your capacity for the peaks but otherwise running low valleys?
3) Early-adopters will bleed out the kinks and determine viability – wait for them.
4) Lower-level infrastructure (read ‘datacenter’) services are your most likely first “buy”;
5) Software-as-a-service is great as long as you are not massively integrated with other things throughout your enterprise or have a significant portfolio of legacy and home-grown apps. ‘Point” solutions or other single-duty deployments are likely;
6) Did you just renew your traditional outsourcing contract? If so, were you offered a cloud solution or is there language in your contract about migrating without penalty at annual milestones through the life of the agreement?
7) Will your staff have to be retrained and are they up to it?
8) Can your budget withstand the uncertainty of demand-based services and the related pressures of accurately forecasting, setting expectations and governance?
9) Is your company likely to be acquired or likely to target other companies for merger or acquisition?
10) If you look at how you have managed your entire data estate, up to this point, will you be comfortable putting that data into ‘space’? This cuts both ways: if your data management leaves something to be desired, this may be an upgrade. If, however, you constantly worry about matters of data security, access, privacy, recoverability, archiving, accuracy and compliance, you might be up late most nights.

Could we be headed back to a future that seems so rooted in the past? I hope not. Someone will have to rise up above the clouds and demand order and accountability. That won’t happen until CIOs, and other important players and stakeholders, look down at the bottom-line.

George M. Tomko is CEO and Executive Consultant for Tomko Tek LLC, bringing game-changing knowledge and experience for transformational analysis and decision-making; planning and execution of enterprise-wide initiatives; outsourcing; strategic cost management; service-oriented business process management; and technology investment assessment. He can be reached at gtomko@tomkotek.com or on Twitter @gmtomko. Profile: www.LinkedIn.com/gtomko

Cloud computing. What a concept. Most people can remember days as a child, laying in the grass, looking up at the sky and imagining the shapes formed by clouds as they moved slowly by. There was something very majestic and beautiful, yet powerful. Some clouds were very thin and high in the sky and others were puffy and so low that you felt like you could touch them if you reached high enough.

Clouds usually signaled change. Black clouds brought storms. Overcast and cloudy days brought dreariness and sadness. Overall, a bright, clear day was almost always held in higher regard than cloudy days.

S0, as I ponder this notion of “cloud” computing, I have to say that it brings mixed feelings. Like my childhood days, I can imagine the cloud shapes and what they might represent. But, at the end, they morph into something else and disperse. But most of all, they take a clear sunny day and mess it all up.

I have been in this business long enough to know that clouds, as metaphors, have been plenty useful in talking about IT concepts — but mostly networks. It was the closest thing to a “black box” as there ever has been to enable someone to quickly get to the point that when you connect up to the cloud, your data comes out as it passes through some route to get to its destination. It did not mattter what the route was — the cloud served as the curtain, behind which everything got figured out just fine — not to worry.

Now, CIOs are being asked to consider a concept where the network, the servers, the SAN and the applications are going to move into the cloud, out-of-site, under the control of invisible minions and untold consoles. And – guess what – at significantly reduced cost. Some claim of cost reductions that are orders of magnitude lower like here. ["With the advent of Cloud Computing, the cost of computation, application hosting and content storage and delivery is plunging fast by several orders of magnitude." ]

That’s a stretch. Hyperbole. Total, unadulterated marketing hype.

Can I buy into a computing grid? – Yes. Can I buy networked storage? – Yes. Can I buy software hosted and set-up elsewhere and accessible via the network? – Yes. Can I run applications on virtual servers? – Yes?

Can I buy a cloud? – No. Not really. Pieces, maybe. Who should I buy from? Depends. Depends on what? Depends on who signed the “manifesto”. Might also depend on which company buys who. Oh yeah, and we are still working on the security architecture. But don’t worry, we will take good care of all of your data that is housed in our cloud but, we cannot guarantee that if you have a cloud from another supplier, that you can access that data from the non-”standard” cloud. Also, you may not be on the proper release of the cloud.

Marketing and sales often oversell and underdeliver. They are often farther ahead in ideas than the production folks are in reality. This can be a good and healthy tension when the gap is not so wide, otherwise, the pressure to deliver is intense and failure is a possibility. The major gap that I see here is the difference between offering the “plumbing” and having the applications follow along.

Utility computing is a term I hear and it is good to think of the commoditized portions of the IT space in that manner. However, CIOs have to worry about data and applications.

Actually, CIOs have to worry about a lot of things. And, given the high stakes gambit of major change — especially technology change — there is as much to do with crafting the message — the essence of the true value proposition that is understood and mutually agreed.

On this score, I would think that black boxes would do the trick. A black box is a symbol that connotes containment, structure, and a solid. It’s a “brick” which is part of a bigger “wall”. Clouds, however, are amorphous, structure-less, sprawling uncontained wisps of vapor. Very hard to build a mental foundation upon.

Years and years ago, I worked in the IT department that provided voice and data communications to a large multinational enterprise. We had a campus of 26 buildings and nearly 6,000 employees. One day, a water pipe broke and flooded the telephone switch room, knocking out all phones for more than half of the buildings. Unfortunately, one of those phones was carrying a call between our CEO and the CEO of our largest customer and the call was dropped at a crucial point in the conversation.

The next day, the CEO called us in and gave us a lecture on his expectations for telephone service. He went to his window and looked out at the sun and the blue sky and said, “Gentlemen, just as God has given us the blue sky and the sun, so too has he given us dial tone. Just as I expect to see the sun every day at dawn, I expect that every day, when I pick up the phone, there will be dial tone!”

I am just glad that I did not have to explain anything about a cloud getting in the way of the blue sky and the sun.

As I began packing for this week’s business travel, I thought back to an article that I wrote in CIO magazine ‘way’ back in 2002 (available here). It had several themes, but the primary reason for writing it was that I actually accomplished a three-week vacation and felt that the world needed to know about it. By this time, I was less than 4 years as a CIO. However, in that time, I had been through enough global system and infrastructure deployments to fill several careers.

But, that was becoming something I could do in my sleep. 2002 was a time of the coming of age of the business savvy CIO. It was the only way that a CIO would be able to survive-at least those who considered themselves “strategic”. At that time, the average tenure of a CIO was something like 18 months and that wasn’t good for anybody.

At the end of the day, the true revelation about actually taking a three week vacation was more about the fact that I could let go of the techie stuff. I had built a high potential group of managers that were running things just fine. When I got back from that vacation, I was all fired up about diving into the business issues and strategic imperatives.

So, here I am, on fire and ready to go. Refreshed and ready to drive. As Yogi is often quoted, “It’s deja vu all over again”. Maybe. Things have a way of cycling back through. Take “Cloud Computing”… No, make that Software as a Service. Oh, wait, too long, SaaS. I love the attention to the lower case ‘a’s. Hype, hype and more hype.

It wasn’t so long ago that we were talking about ASPs and I was an early adopter. Then, it was “Network Computing” where all of our apps and even the computing power itself would come from the network a.k.a “the Cloud”.

My advice – take a 2 or 3 week vacation and, when you come back, see if it is still being talked about, written about, hyped, etc.

Better yet, at your next CIO conference, set-up a birds of a feather table and invite everyone who has a significant working implementation that is not some hybrid kluge. Have them show you how they mashed their legacy data into the provider’s database and got their user community trained and on board. Have them show you their SLAs and the performance against them. Then, have them show you how much cost they were able to take out of their operations. Finally, have them show you how they supercharged their businesses to achieve new heights and raised the bar versus the competition.

You will be sitting alone.

Folks, we can’t feel good yet about turning e-mail over to providers let alone order processing. There are successes out their like salesforce.com. But, show me full process integration. You know, kinda like that SOA stuff that was so hot 2 years ago.

The bottom line is that all businesses are different in how they invested in and evolved their computing infrastructure, data, processes, financial analysis and reporting, etc., etc. New organizations, start-ups, spin offs and the like have a better shot at the “clean sheet of paper” and that is what it will take.

So, take a vacation, a long one. Come back and see if things are any clearer than when you left. Stay off the crack berry, leave e-mail and voice mail alone. Reintroduce yourself to an ocean breeze and the people that have the same residential mailing address as you (your significant peeps).

Upon your return, it will all still be there but you will be in a different ‘place’.