Microsoft CIO talks cloud, economic rebound

Tony Scott says CIOs should prepare for big growth now that economic recovery is underway

In one way, the global recession "felt like more of the same" for Microsoft CIO Tony Scott. "The boss comes in and says, 'We want to cut costs.'"

But now, as the economy shows signs that a recovery is under way, "How many of us know how to grow?" Scott said during an event held in Boston on Tuesday by the Massachusetts Technology Leadership Council.

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"The economy has flushed out the weak players. The strong have survived and picked up market share," he said. "We're talking big growth -- right around the corner."

Scott already has an ample IT environment to maintain for Microsoft's roughly 93,000 employees. The company has 7,000 production servers and 11 production data centers, according to a slide Scott showed the crowd.

Save for a single instance of SAP, Microsoft has few packaged applications, Scott said. "What we prefer to do is act as a place where we can run our tier-one apps with Microsoft technology." Microsoft is also famous for serving as a beta tester on its own products before making them generally available.

These days, "We're taking all of our tier-one apps and moving them all to the cloud," he added.

Cloud-style deployment allows applications to be provisioned dynamically in accordance with demand, versus dedicating a set of servers to a particular application all the time. Therefore, it is also distinct from traditional application hosting.

Microsoft is still shaking off that traditional style of IT and its inefficiencies, he said.

"We in the software industry have trained you to buy from us at the end of a quarter or at the end of the year," Scott said.

That means Microsoft's sales systems often sit idle only to explode into "mayhem" at quarter- or year-end, he said. Virtualization has helped, but only so much, he said.

In a brief interview following his talk, Scott said he is also interested in moving Microsoft's SAP instance to a cloud-based delivery system. "Right now I'm hard-provisioning app servers and scaling that for peak demand." But there is nothing to announce as of yet, he added.

Scott spends about 30 percent of his time on the road, talking to customers, and the topic of cloud computing comes up frequently, he said. Cloud-based services, especially for basic applications like e-mail, will be widely adopted not long from now, Scott predicted.

"In five years, I'm not sure there'll be anyone saying that it's really important that they run their own e-mail system," he said. "It's going to be like someone saying I want to run my own electric plant because I want reliable electricity."

CIOs have three other broad transitions to make as the economy rebounds, said Andrew McAfee, a principal research scientist at the Massachusetts Institute of Technology's Center for Digital Business, during a panel discussion later at the event.

First, organizations are becoming more "scientific," driven by insights into hard data, said McAfee, who is known for his association with the Enterprise 2.0 movement. "That's in contrast to the way decisions get made now, which is basically, 'Trust me, I'm a smart guy.'"

Companies should also use technology to more effectively orchestrate how they do business, McAfee said. But at the same time, company leaders "need to get out of the way," to let their employees "self-organize" using social-networking tools and related technologies, he added.

CIOs who don't acknowledge the rise of cloud computing are in jeopardy, McAfee said. "The cloud is about as inevitable as the electrification of factories. It took a long time, but it was just flat-out the answer. If the CIO sees their role as maintaining some kind of physical plant, that will be more and more peripheral."

For his part, Scott warned that "the enemy of the future is creeping incrementalism, laying a little more glue on top of what we already have."

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