Most CIOs have their heads in the cloud these days. But if they’re leading substantial, established enterprises, they also have their feet in a well-designed, carefully-secured data centre.

CIOs across the board are feeling pressure from somewhere – whether it’s their CEO, their employees, customers, partners or the general shift in the market – to implement the latest cloud-based IT technology for efficiency, agility and economy. But they also need to take advantage of their existing IT infrastructure to maximise return on investment.

These leaders are finding that they can create hybrid clouds to get the best of both worlds. They can cut costs by storing and sharing some data and applications internally in a private cloud. And they can nimbly develop new applications and store voluminous amounts of unstructured information for big data analytics in public clouds. They lease that capacity from cloud-hosting companies that specialise in data management, while integrating these capabilities into their existing on premise infrastructure.

The key is to figure out what data and what applications fit best in which place. Then figure out where they have to interact. Get the right software tools for managing the hybrid environment. It requires careful planning to manage a private cloud and a third party public cloud host. But for companies that want to get the benefit of new technology while still needing to provide bullet-proof continuity of operations, the old and the new need to work together.

Many established companies with significant IT infrastructure are making the decision to develop a hybrid cloud. For example, NiSource Inc., one of the largest natural-gas transmission companies in the U.S., recently said that it plans to move to a hybrid cloud.

Companies today typically use three types of computing: dedicated servers in the corporate data centre that run key applications; pooled resources in a private cloud in the corporate data centre; and resources that are run by public cloud providers and accessed over the Internet. Mixing and blending any of these deployment models creates a hybrid cloud.

Most established enterprises can’t simply close their data centres and move IT to an outside provider. In some cases they have handcrafted, 20-year old applications that are vital to services provided to a few key customers. Some ERP systems have been tuned over 20 years, and downtime would threaten corporate viability. Such applications may simply be too fragile to move. In those cases it often will be more cost effective to keep legacy applications running on isolated specialised servers rather than moving them to virtualised private cloud servers. In other cases, there will be specialised data that is subject to regulatory or legal constraints.

But building a private cloud in the corporate data centre will cut costs and increase flexibility. In a private cloud, virtual servers can handle hundreds of workloads on a single physical server. Data centre architects don’t need to dedicate storage devices to a single application. While some jobs still run on dedicated computers, CIOs treat most of the computing capacity in the data centres as a pooled resource — in effect, a private cloud that is allocated on demand.

The data centre has long been the symbolic heart of the CIO’s domain. For many years, corporate data centres continuously required more space and more electric power. But the virtualisation revolution that started in 1998 meant many applications could run on a single server, and most companies have been consolidating workloads on servers ever since.

Adopting hybrid-cloud architecture means most enterprises already have all the bricks-and-mortar data centre space they will ever need. CIOs can stop worrying about how to enlarge their data centres or obtain more electric power for air-conditioning.

Most companies are using some public-cloud infrastructure as well. Sometimes IT departments have made a decision to use the cloud for testing or development of new applications. In other cases a marketing executive or a researcher has bypassed IT to use a new application, expensing the cost on a corporate credit card. In most companies, it’s important for the IT department to have a handle on all corporate data, and know what might be going off company servers.

There are ample positive reasons for CIOs to embrace the cloud. Last year, my company, IBM commissioned a survey of top executives at 800 enterprises around the world about a range of issues. That study revealed that the majority are using cloud to integrate and apply mobile, social and big data technologies. The cloud is paying off for those companies. Those with high cloud adoption are reporting almost double the revenue growth and nearly 2.5 times higher gross profit growth than peer companies.

Embracing the cloud makes it easier for the IT department to be seen as a partner in new initiatives for other departments. Historically, IT has often been seen as a barrier. Budget constraints and the need to buy and install hardware meant that any new project required months of activity by IT before operating groups could get access. When using a public cloud, a few days or weeks of coding by IT developers can be enough to launch a new product. Our survey found that 66% of organisations are using cloud to strengthen the relationship between IT and lines of business.

Embracing the cloud isn’t an all-or-nothing proposition. The hybrid cloud is the route to cloud computing that will be most comfortable and cost efficient for large enterprises with long-established IT departments and data centres.

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