In this report, we take a brief look at the outlook and thought processes of the modern-day chief technology officer – or the executive in charge of IT, if not the CTO specifically – working on their organization's efforts to capitalize on the cloud. In the course of carrying out buyside survey research, conducting Advisory project work and interviewing and reviewing use cases from across the industry, 451 Research has a lot of opportunities to gain exposure to IT practitioners and the work of cloud transformation and IT modernization efforts.

We are noting some general trends in the market today. Nearly every enterprise (~90%) is currently engaged with one or more cloud service providers, with most of that involving SaaS because that is the easiest to get started with and shows the most immediate benefits by replacing individual applications and removing all of the associated nonremunerative work (maintenance, management, security, etc.). However, over 60% report that they either make use of or are beginning to implement broad multi-cloud strategies employing public, private and hosted private cloud infrastructure platforms and services. Most believe that a fully integrated, seamless hybrid cloud experience, where all of the disparate forms of infrastructure are managed in a single control plane, is the endpoint. That being said, there are several important things to recognize about how the CTO of today thinks.

The 451 Take

Current CTOs don't require education, but they seek out inspiration in new ways to handle IT. They aren't dragging their feet but they (probably) aren't going to take a hand-in-hand gamble with a starry-eyed startup, either. Cloud services and management products and platforms have to work, have to be demonstrably functional and useful, and have to come at an installation/integration cost that doesn't cause CTOs to seek out a convenient wall to bang their head on. For MSPs, which are and will continue to be the 'last mile' between cloud and the enterprise, the one thing they have to do over all else is not oversell. These days, value in the cloud comes from reliability and stability, and finding ways to let organizations do things they otherwise couldn't.

CTOs are Selfish

CTOs are primarily concerned about their own problems in turning an IT organization around. They don't want to hear about exciting new ways to stream video (unless they're a media firm). They don't want to hear about next-generation networking tricks and micro-segmentation (unless it can make them money). They don't want to hear about how using an app can make the world a better place or change the way things are done (unless all else has been satisfactorily addressed). They do want to hear that service providers are listening to what they need and addressing it realistically.

CTOs are Aware

CTOs are fully aware of the range of infrastructure options available (public, private, hosted private, cloud services) and understand the role and capabilities of all of them. They may be frustrated by the pace of change or the unique obstacles in their organization, but education is rarely needed. More often than not, they want to hear about opportunities to do things they otherwise couldn't dream of with cloud platforms and the advanced infrastructure services.

CTOs are In Charge Again

A few years back, we heard a lot about 'shadow IT,' wherein enterprise users would build apps or carry out development on public cloud platforms and make it a wedge issue in the organization by massively outperforming traditional environments. This is no longer the case – most of the enterprises engaged in cloud transformation are driven by the CTO in that process. In larger organizations, that can mean a 'cloud team' selected to take over and transform business and development units one by one, and in smaller enterprises, it can mean the CTO starting with a mandate to modernize and utilize cloud services and make resource-allocation (both human and machine) decisions and goals based on that mandate.

CTOs still need Help

Very few CTOs today look across the landscape of what's out there and think they can affect productive change without a third-party (or several) service provider. For large enterprises, it's a moot point – they turn to existing service partners and ask them for expertise and work in cloud transformation. For smaller enterprises, it's a process of finding the provider with the most access and the best fit for their exact need. An enterprise with a lot of capital infrastructure in play might have an awful lot of specialized software and infrastructure needed to operate it, but it is more than happy to have an MSP take the actual operations out of its hands. An enterprise with lots of human and intellectual capital, on the other hand, may be just as happy to shove compute and storage needs into the most convenient public cloud and seek assistance at the application and data management layer. Whatever the situation, CTOs are keenly aware that they will most likely not be doing everything without outside services.

What's safe to say in 2018 is that while cloud computing, as a model of consumption, remains disruptive and is the major trend shaping IT today, it has also been reclaimed by the office of the CTO as an integral and normalized aspect of handling IT infrastructure. Of course, this means that the cloud is mainstream, and the next things to force a major shift in IT are concepts and technologies that don't rely on fixed infrastructure and blur the lines of traditional demarcation: containers, the Internet of Things, smart applications (e.g., machine learning and predictive/reactive analytics), next-generation networking, and so on. CTOs don't scratch their heads at the cloud anymore, but they may not really get what's coming next. They certainly don't want to make another major overhaul to take advantage of that next wave – nor should they.
Owen Rogers
Research Director, Digital Economics Unit

As Research Director, Owen Rogers leads the firm's Digital Economics Unit, which serves to help customers understand the economics behind digital and cloud technologies so they can make informed choices when costing and pricing their own products and services, as well as those from their vendors, suppliers and competitors. Owen is the architect of the Cloud Price Index, 451 Research's benchmark indicator of the costs of public, private and managed clouds, and the Cloud Price Codex, our global survey of cloud pricing methods and mechanisms. 
Carl Brooks
Analyst - Service Providers

Carl Brooks is an Analyst for 451 Research's Service Providers Channel, covering cloud computing and the next generation of IT infrastructure. He specialized in server and desktop operations, Linux and Microsoft products, and security, and has thorough knowledge of hardware platforms and networking technologies, as well as significant experience working with the channel market. 
Jean Atelsek
Analyst, Cloud Price Index

Jean Atelsek is an analyst for 451 Research’s Digital Economics Unit, focusing on cloud pricing in the US and Europe. Prior to joining 451 Research, she was an editor at Ovum, spiffing up reports, forecasts and data tools covering telecoms and service providers, fixed and wireless networks, and consumer technology among other topics. 

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