Will Cloud Computing Lift CIOs to New Heights?

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BOSTON — Microsoft finally put its head in the clouds this week by releasing details about a planned new operating systems and development platform that is tailor-made for Web-based services for businesses and consumers.But in doing so, it may be contributing to a dramatic expansion in the role of companies’ chief information officers.

How so? To some in the industry, the term “cloud computing” is nothing more than the latest buzzword.But others see it as a buzz saw — one with the potential to slice through corporations, simplifying, dispersing and extending access to key business information throughout the enterprise.

And while cloud-based services are typically seen as helping enterprises cut costs by offloading hardware and IT management while better providing for scalability, the CIO’s duties aren’t likely to be minimized in the process. Instead, they’re only getting larger.

“The role of the CIO has been changing,” IBM senior vice president, group executive and chief software honcho Steve Mills told InternetNews.com last month in Boston. “The CIO is usually one of the few people within a company that actually looks across all the functional units and has a perspective of redundancy and consistency, and all of the potential for improvement in operation,” he explained.

“They understand that information is the power you want to unleash within your company,” he added.

Microsoft’s cloud computing initiative comes as just the latest step as enterprises and their vendors figure out ways to tap the cloud to solve business and IT needs.

For Microsoft, its new Azure platform marked a major change in how the company viewed cloud services. Previously, it saw online services as adjuncts to its software products. Now, in a vision mapped out by Ray Ozzie, Microsoft’s chief software architect, the company’s taking quite a different approach by offering its own hosted platform and services to enterprises and their developers. Microsoft offered a preview of the technology and distributed code to attendees this week at its Professional Developers Conference in Los Angeles.

Microsoft’s move follows an announcement by IBM just last month that it would build a new research center in Cambridge, Mass. to look at ways businesses can better use such things as social networking and cloud computing technologies. Among IBM’s reasons for doing this: To counteract Google’s plans to devote the next 10 years to collaborative and cloud computing.

Both initiatives mark only the most recent indications that despite occasional complaints about the term “cloud computing,” the concept is seeing large-scale interest by vendors and customers.

Yet by shifting so much information to the cloud, some executives argue that there may be a dark underside to the technology. For example, Mills said there’s concern that opening up access and making it too easy for larger portions of the enterprise to look at the same information can lead to problems.

“Does everyone really need to be informed, and is this the most efficient way to run my business?” he said. “If you are trying to mobilize an organization to follow a path, and each and every individual is making a contribution, the theory is that it is good to have a better understanding of the information surrounding the business, how it runs and where it is trying to go.”

That’s where the CIO comes in, since his or her responsibility involves keeping information safely controlled while still working to promote and leverage the positive aspects of cloud-based computing.

“The CIO is the CEOs agent,” Mills explained. “So, a better title might be ‘chief innovation officer’, since CIOs are uniquely positioned to see the cross-company operations and the potential synergies.”

With the CIO overseeing the transition of enterprises’ business operations to the cloud — putting more accessible, actionable business information into the hands of more employees — what might the impact be on the corporate command structure? In some companies, employees already report more to the CIO and CFO than to the CEO, since these people may be considered closer to the actionable front lines, Mills pointed out. That trend might grow even more substantial as the business rolls in other cutting-edge efforts like enterprise social networking that could even further enhance information sharing and dissemination.

This article was first published on InternetNews.com.