Cloud, Automation, Industrialization

Cloud Computing is still a hot topic. And there are still many different definitions out there. I personally tend to differentiate between two terms:

Cloud: An IT environment to product IT services.
Cloud Computing: Making use of these services - procurement, orchestration, management,...

Thus the internal IT can be understood as one of many clouds, there might even be multiple internal clouds. But we don't have to care that much about internal, external, public, private, hybrid,... The prerequisite for an IT environment to be understood as a cloud is the service orientation, e.g. the production of well-described services. That might be done in a more or less scalable way - but it is about services.

Based on that, the sometimes discussed analogy between the Industrial Revolution and Cloud Computing is acceptable - one has to be careful with analogies because most of them have weaknesses. When looking at the concept of Cloud Computing, it is about the optimization of service delivery, based on orchestrated services (1 to n services) out of 1 to n clouds. The target is to provide the most adequate (which is a result of cost, availability, governance requirements, and many other factors) "service supply chain" to fulfill the business needs.

To do that, services must be produced efficiently. That is where automation comes into play. The internal IT environment acting as a cloud has to be efficient. Automation is a key element for efficiency. Virtualization might help as well, but efficient virtualization requires a lot of automation.

The industrialization paradigm, on the other hand, is valid when looking at the entire picture:

The production of services (goods, parts) is automated.
New services (goods) are built based on parts which might be delivered by external suppliers.

Overall, the most important thing about Cloud Computing is that it changes the way IT services are provided to the business. There are standardized concepts for manging services, there are standardized descriptions, optimized production (using automation, amongst others), better planning, flexible orchestration,...

From an organizational perspective that leads to two different layers of IT organizations within organizations:

The management (procurement, orchestration, auditing,...) of services, which builds on services delivered by clouds to produce the final service which is required by the business.
The production of IT services, internally or externally.

One might discuss whether the specific services which are required to glue "standard" services are at the higher or lower level - you can understand them as part of the orchestration or as "custom" services required for orchestration and provided by some service provider. However, it is obvious that IT organizations have to change into an "management and orchestration" and a "production" unit, sort of the same basic structure like the organizations have overall. To make the most out of Cloud Computing, CIOs have to start this change now. And, honestly: It is more likely that production will be externalized - but on the other hand there is plenty of room for providing specific services in an efficient way.