What was the biggest shift among IT managers this year? According to the CEOs of Evernote, Box, and GitHub, it's the nearly complete acceptance and embrace of cloud solutions.
It turns out that most IT departments no longer want to buy, install, and run software on their own servers, and the ancillary benefits of the cloud -- like easier mobile access for workforces that combine full-time employees and contractors -- seal the deal.
At a roundtable for reporters this morning in San Francisco, Evernote CEO Phil Libin said he's seen a dramatic turnaround in attitude since Evernote for Business launched early this year. "The number of requests we get for an on-premise solution is down 90%. It used to be one of the most common requests. Now it's almost completely disappeared."
Box CEO Aaron Levie went further: "We don't even have to lead with the advantages of cloud anymore in conversation," Levie said. "The leverage you get via the cloud is understood, assumed, and appreciated by IT buyers. These are the Safeways of the world, the Chevrons of the world. As an IT leader, why would I not want hundreds of other companies, and thus thousands of employees, working on my behalf to make my company more productive, more agile?"
Levie noted that the shift will accelerate as IT priorities shift away from keeping things running and toward more strategic areas like analyzing business data. "In a couple of years, most enterprises won't have the talent to manage on-premises servers."
Box advisor and former Microsoft executive Steven Sinofsky, who moderated the discussion, pointed to the changing nature of the workforce as a driving factor as well. Any company doing development -- say, of mobile apps -- has a combination of full-time employees and external vendors working on these projects.
"That used to involve permissioning, provisioning -- it was a crazy process," he said. With a cloud-based solution and robust permissions, "you can kick people out when they stop being the vendor and [you] own the IP [intellectual property]. It inverts the whole thing."
GitHub CEO Tom Preston-Werner predicted that 2014 will be the year the largest companies finally move beyond thinking they need on-premises solutions. "This year is when the Fortune 500 finally lets go of on premise. It's time, it's OK, it's to their advantage," he insisted. "We've reached peak on-premise."
Preston-Werner also said that this provides huge opportunities for startups and smaller companies who grew up with a cloud-first approach. "The ramifications are magnficent. It's a huge expense to build an on-premise product. It's very hard to build, very hard to sell."
These up and coming enterprise leaders had some other predictions:
- Asana CEO Dustin Moskovitz believes the era of email is really and truly coming to an end. "We've already seen it in the consumer world," he said. "It's a precursor of what's to come in the enterprise."
- Box's Levie believes legacy IT has peaked, and that companies will adjust their IT models to the information-first economy. "I don't think we'll see much growth from legacy IT models," he predicted. "More blue chip companies, Fortune 500s, even if they're not fundamentally in the software business, or the knowledge work business, they realize they're in the information business. Restaruant companies, airlines, railroad companies all have strategies that result in them changing their business" to focus more on information.
- Evernote's Libin reiterated a theme from the company's developer conference in September: "BYOD is dead. I think it's always been a faulty premise, people don't want to bring their own devices. They want Macbooks, they want iPhones, they want nice Androids," he said. "More and more ocmpanies realize that, it's not about employee choice, it's about giving them great experiences."
Sinofsky's prediction was more of a comment on human nature:
"People are really bad at measuring exponential growth. Humans can model something only when it's linear. Nobody really got Moore's Law because they couldn't believe chips would be doubling every year. Think about the changes each of these folks mention, they're exponential. They're already exponential. There's really going to sweep a giant wave cresting over all these processes."