New c-suite seat: CTO of the cloud

December 6, 2010: 1:21 PM ET

C-level positions don't get created overnight. So what is it about the cloud computing revolution that merits a seat in the executive suite?

Image representing Lew Tucker as depicted in C...

Lew Tucker, Cisco's Chief Technology Officer of Cloud ComputingImage by Joi on Flickr via CrunchBase

The cloud: A once, well, hazy term that describes the increasingly vast array of software, applications, and data storage tools that live not on users' home PCs but on the Internet, is taking form. Cloud computing, as tech companies would have us understand it, encompasses all kinds of formerly offline processes that can now happen on the web. For example, storing data (think Google docs, not jump drives) or providing services (think streaming Netflix (NFLX) movies vs. receiving a mailed DVD.) Microsoft's (MSFT) latest ad campaign for Windows 7 boasts of taking users "to the cloud" to allow them to accomplish everything from retouching photos to watching their  DVR'd shows in the airport. (See one of their spots below.)

Companies everywhere are rolling cloud-based computing into the day-to-day. Different companies are attacking that migration in different ways. Several have built innovation groups to ease the transition, says Aaron Levie, CEO of Box.net, a start-up that provides cloud-based file sharing.

"Any company needs to have a cloud strategy," says Kristof Kloeckner, CTO of Enterprise Initiatives and Vice President of Cloud Computing Platforms for IBM (IBM).  "And I believe that given the transformative nature of cloud computing, it needs C-level attention."

Not that every business process or product will go to the cloud, says Kloeckner. Many of IBM's clients, for example, want to wrap web-based computing into traditional technologies.

That merits a new top exec position for some companies that don't want to get shaken up by the change. "In many ways, cloud computing could be disruptive for Cisco (CSCO) as well as for Cisco's consumers," says Lew Tucker, Cisco's Chief Technology Officer of Cloud Computing. "My role is to make sure that that disruption happens in a very positive way—that we can use it as an opportunity."

Cloud technology is so disruptive because companies are dealing with a tech shift on several levels. First, they are changing their own IT structure. Traditionally, skills around IT have meant managing data centers and security, says Levie. That's changing, he says, to figuring out how companies can become more productive by using the cloud.

That means some business models will have to change, Levie says. Companies can completely revamp customer service through web technology. In many cases, that means strategies to improve speed and quality of service will trump figuring out how to charge more for a product. That's already happening, Levie says.

Cisco's Cloud CTO Tucker agrees. "Some forward-looking executives are starting to ask the question: is there a bigger transformation taking place? Maybe emails should be handled by Google, maybe sales and commissions should be handled by Salesforce (CRM)."

Those kinds of conversations are coming up because the cloud appeals to a company's bottom line. While transferring from traditional to web-based technology costs money, Tucker says, space in the cloud is veritably infinite, which makes life in the cloud pretty cheap. It will be crucial anyway, according to Tucker, because of the quality of service that consumers have come to expect.

Finally, it will be key for tech companies including Cisco and IBM to have internal cloud computing under control because they want to sell certain clouds, or the tools to build them, to customers.

That requires a coherent cloud strategy that includes everything from internal changes at the IT level to pushing products, Levie says. "You can't have different ways that you handle cloud security—It has to be seen as under the same umbrella."

Which is what a cloud CTO needs to coordinate. Another part of job, at this stage, is predicting how cloud computing will change business, then communicating those predictions company-wide. That part of the job won't always be necessary, says Kloeckner.

"I would think that this is a transformation job. Part of my task actually is to work this into the fabric of our day-to-day business." Once that happens, he says, managing the cloud probably won't require such a separate skill set from those needed in other positions. Still, he says, "I think there will be a need for a CTO-level person responsible for cloud computing in the foreseeable future."

If  Tucker is right, and the move to the cloud is coming from all sides, it seems likely that the old-school CTO will be sharing his title with the new-school CTO of the cloud for some time to come.

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Shelley DuBois
Shelley DuBois
Writer - Reporter, Fortune

Shelley DuBois writes on management issues for Fortune.com. Before joining Fortune, she was a producer for National Public Radio's Science Friday and worked for Wired. Shelley has a graduate degree in science, health and environmental reporting from New York University. She lives in Brooklyn.

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