The cloud will demote the CIO in 2017

As the datacenter and IT systems move outside the CIO's grasp into the cloud, most CIOs will find their role diminished

The cloud will demote the CIO in 2017
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CIOs have had a changing role for decades. Indeed, back when I was dealing with them as my bosses, they were mostly rotated in from the finance department and had no real technical skills to speak of.

These days, they typically have a technical background, but I wouldn’t call most of them technical or say they have a deep understanding of technology. Indeed, they were and mostly are political animals who understand that their career trajectory will be based more on who they know in the organization versus what they know. In short, I’ll never be a CIO.

But I may not want to be. As cloud computing continues to make its mark in the Global 2000, CIOs seem to be much less of a factor. Indeed, I’ve seen many of their roles diminish. Here are a few reasons why.

First, the corporate datacenters are shrinking, thanks to cloud computing. A CIO’s primary role was to keep those items running in many departments. Because the CIO had direct budgetary controls of where applications run in their companies, what got updated, and when, many departments thought they were being held hostage.

With the cloud, they don’t feel that way. The cloud providers ultimately maintain the systems, and the departments pay for the cloud services. CIOs need only stand back and watch over proceedings—if the departments let them do so.

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Second, CIOs are considered obstacles to productivity and are now often left out of the loop. In the past, CIOs had to be in the loop because the departments got their applications and compute resources through IT. However, given the time required to get needed systems up and running, departments have become good at working around the CIOs—typically with the CEO’s and board’s at least tacit blessing. The cloud has enabled this as well.

Third, the reduction of IT budgets within the corporations has reduced CIOs’ clout because budget is a strong proxy for clout. Although many analysts have pointed to the reduction of IT spending as a major trend, the reality is that companies are spending as much on IT, but that spending is occurring more and more by the departments themselves. Technology budgets are not shrinking, but they’re allocated increasingly outside IT. Instead, IT budgets are shrinking as the CIO’s domain shrinks.

Don’t get me wrong: There are many innovative CIOs making a difference in their companies. But most CIOs are on the wrong path. Companies are evolving with their needs, and CIOs will either keep up or become bit players. Today, most are well on the way to becoming bit players.