As CMOs grab IT budget from CIOs, cloud CapEx and OpEx shift

By Bernard Golden, CIO |  Cloud Computing

One can predict that CIOs, in particular, and IT organizations, in general, will move to an influencer role-meaning they'll affect the evaluation but won't make the decision, or hold the purse strings. A corollary is that CIOs and IT organization personnel will undergo an uncomfortable learning process as they shift from frontline decision-maker to part of the supporting cast.

The shift of attention to CMOs will cause change for vendors as well. Vendors can expect more emphasis on business outcomes and benefits, with less focus on standards, functionality and feature checklists.

Less Visibility Means Spending Unpredictability

Far more important than the "who's up and who's down" of buying and selling politics will be what affect this new buyer has on IT spending patterns. In other words, the who affects individual deals-"I'm vendor X...who is the decision maker for this purchase?"-while the what affects the makeup of the entire budget. It's here that the new decision-maker and next-generation application profiles really change the nature of IT spending.

Analysis: 6 Ways CIOs Can Make Peace with CMOs

This new CMO cloud world will cause IT spending within a company to be far less predictable for the following reasons:

1. In the old, IT-controlled world, yearly budgets were more or less set in stone by Jan. 1. Beyond the obvious fact that headcount costs were more or less fixed and could be forecasted by that date, most other spending was fixed as well. Because nonmaintenance, nonheadcount spend was primarily capital expenditure for long-lived assets, it had to go through long planning and budgeting exercises before the year it would be spent, often two or more years in advance. It's common for IT organizations to be researching something in one year, putting it into the budget planning the next year and spending the following year.

In the new, CMO-controlled world, much of the spending will be focused on public cloud computing, where no capital investment is required, but where all costs will fall into an OpEx category. The fact that this spending does not require CapEx means that less visibility into budgets will be possible on Jan. 1 of a given year.


Originally published on CIO |  Click here to read the original story.
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