Data execs embracing cloud as times shift

SEATTLE — Brian Lillie, chief information officer at data-center company Equinix Inc., had a salesman with a password problem.

Remembering the 15 separate logins to use the Redwood, Calif., company’s tools proved challenging, the salesman told Lillie, so he was writing them all down. That would render them pointless if the paper were to be lost or stolen. So Lillie started testing programs to let people use a single password for everything, and implemented one across the business a couple of years ago.

The CIO’s role is changing quickly in a world where the spread of mobile devices and Internet-based programs is resulting in a more employee-led approach to new technology.

Companies’ top informationtechnology executives now must track the use of workers’ own devices and applications and decide which of these programs to roll out companywide. That’s a break from the past, when they had more control over evaluating what software and hardware to buy before it reached the staff.

“It’s no longer ‘here’s what you will use,’” Lillie said. More than ever he’s tracking what tools employees are already using, and considering that information in making purchasing decisions for the company at large. His mantra now is “change your mindset — you can’t be a ‘CI-no,’” he said.

The broader shift to Internet-based software, and the rise of companies that market directly to individual users and engineers, such as Docker, Microsoft’s Yammer and Box Inc., has brought with it a surge in cloud-computing choices. That change has many CIOs, like Lillie, seeking to adapt by letting workers experiment — while keeping a tight grip on security and spending. It’s also upending the traditional way businesses buy and sell gear and software.

“CIOs and IT organizations in general are being forced to be a lot more responsive, because people have options,” said Docker Chief Executive Officer Ben Golub, whose company makes open-source software used in application development. “We’re not out playing golf with CIOs to pitch them Docker.” Instead, Docker gets individual users to deploy the product, then works with the CIOs only once the program has spread widely within a business, he said.

As corporate technology spending climbs to an estimated $3.77 trillion worldwide this year, according to Gartner Inc., the job description of CIOs — who according to PayScale make an average of about $150,000 a year in the United States — is increasingly being driven by the growth of mobile computing and the cloud. With more software and applications becoming available for everything from sharing calendars to collaborating on code, workers have gotten used to tapping whatever program is most efficient on every computer they use, including home, office and mobile.

“It’s hard for people who for the last 15 years implemented policy in certain ways to suddenly make a 180-degree turn and suddenly be innovative,” said Adriaan van Wyk, CEO at K2, a business-applications software maker that provides programs so CIOs can get the benefits of cloud software without storing their data outside the company. “There are very talented people who can make that shift.”

According to Forrester Research, 13 percent of U.S. technology purchases in 2009 were made by employees outside of a company’s information-technology group, or were initiated by those workers and included the CIO later. By 2015, that combined category will rise to 18 percent, while purchases led by the CIO only are projected to drop to 22 percent from 27 percent.

Smart CIOs are rolling with the changes. At companies like Equinix and Dell, information chiefs are trying to position themselves as gatekeepers to experimentation and flexible approaches rather than control freaks. At the same time, they must safeguard security and keep costs in check.

With models like Docker’s, which is open source, and Yammer’s, known as freemium — where the company offers a free version and then lets users pay for one with more features — new technologies often take root in a company before the CIO notices.

While some companies block various cloud-storage services, Equinix’s Lillie uses software from Skyhigh Networks to monitor employee usage, which lets him keep track of what’s going on and also determine which programs are the most popular.

That’s a big change for many CIOs, said Sunny Gupta, CEO of Apptio, which makes cloud software to help companies track and manage technology investments. The advent of cloud services means more applications and key pieces of infrastructure, like the servers where information is stored, are housed off-site.

“A lot of the old-school CIOs were server huggers,” said Gupta, who has met with about 500 CIOs in the past five years. “The modern business doesn’t care where that server lives.”

At some companies, particularly those that face stiff regulations on data collection, security and retention in areas like insurance, health care and financial services, CIOs still say they have to exercise more control. Debra Bailey, who oversees technology and business services at British financialservices firm Nationwide Building Society, blocks access to cloud-storage and file-sharing sites. Workers can’t use Facebook’s social network, either.

Even in these industries, CIOs are changing things. When Rick Hopfer joined managedcare provider Molina Healthcare in 2011 from Sony Pictures Entertainment, he found his new company was far more conservative when it came to personal technology. He instituted a bring-your-own-device policy — known as BYOD — unusual for companies in health care, he said, yet necessary to appeal to younger employees as the company more than quadrupled its workforce to 9,000 in four years.

“We are hiring new people who have grown up with technology,” he said. “They are used to mobility, used to the Internet, used to getting access where they want and when they want it.”