Knorr: Back to the bank with its multi-billion-dollar infrastructure -- a ton of sunk cost is in there. I'm sure they have some Oracle licenses as well. How do you move from that to a cloud or hosted infrastructure? Or do you?
Hurd: Complexity in IT is almost always driven by the app. So the disparity in apps -- the lack of integration among apps, the number of apps -- creates tremendous difficulty underneath the infrastructure. When you call your traditional IT guy and say, "I think our IT cost is too high," and I want you as the CIO to fix all that, what are you going to do? You're going to run standard plays: You're going to virtualize servers, you're going to try and combine servers, you're going to try and get rid of data center, all that stuff.
The reality is the toughest part of your job is the stuff you don't control, which are the processes. Because businesses are run by: I've got a strategy. I then support that strategy with a business model. I then support that business model with processes. I then automate those processes with applications. If you're not involved in the processes, the apps by definition are not controlled by you. Therefore, this whole process of standardization and simplification of apps is what drives change.
To your point: If you really want to transform an IT organization, the leadership to transform that more than likely has to come from outside IT. It has to come from somewhere in the C-suite. It could be the CFO, it could be the CEO, it could be the president, but it's got to be somebody who has the chips in front of him who can align these processes.
If you do, monumental transformation is possible. I go back to the days when I was at HP. Our IT budget when I got there was bigger than our R&D budget. We had more IT people than we had salespeople. Why? Was it because a bunch of IT guys didn't know what they were doing? Maybe. But more importantly, the disparate nature of the processes had created this huge application swell that had created an unbelievable complexity.
Once you start to take the infrastructure from 7,000 apps to, in their case 1,500 apps, the entire infrastructure underneath transformed, and so did the cost structure. I think it all starts with apps. I think what you can find here is this innovation we're talking about is for businesses leaders to think about a new way to run their business.
By the way, I think whether you do it in the cloud or the private cloud using on-premise apps -- that's a separate decision. But let's say I'm going to take these apps, I'm going to consolidate them, and I'm going to standardize them. Once I standardize them, the cloud becomes a really attractive delivery vehicle for me.
Because I'm now going to align my business model, and I'm going to align my processes around a standard application. And I can get rid of a capex and a lot of other good stuff. I think that transformation is going to occur.
This article, "Oracle's Mark Hurd: App complexity will drive customers to our cloud," originally appeared at InfoWorld.com. Read more of Eric Knorr's Modernizing IT blog, and for the latest business technology news, follow InfoWorld on Twitter.