Relax! It’s not meant to be a real formula, just a way of trying to think about the relationship between all of these. There is a great deal of growing interest in cloud services for the enterprise and more factors are coming into the mix expected to transform enterprises and impact their business models. Over the last few months - together with my colleagues - we have been closely examining what’s really happening, why it’s happening, and what’s needed. The result is a whole new Capgemini global business unit called Infostructure Technology Services which is designed to address the expertise ‘gap’ rapidly emerging within most enterprises. This is a summary of what we have identified and what is needed in outline, for the full story go to Capgemini Infostructure Technology Services. The majority of enterprises can be summed up around four activities: buying something, adding value to it reselling it at a profit and the associated administering/operational management. Information Technology has done an excellent job on the two internal activities of adding value and administration/operational management, but has not achieved the same kind of impact on the two other aspects of buying and selling. The goal of business technology is to achieve the same level of improvement in these two areas and for that, it needs to use a different, common and open technology base from that of internal IT. Internal information technology with its dedicated users, applications, licenses, client-server, data-centric and close coupled integration architecture cannot support externally oriented business technology where almost every condition is different. Internet connectivity and the emergence of people centric services in the web 2.0 world has led business and user expectations to shift dramatically and give rise to the expectation of a new and completely different working environment, based in the cloud, or more correctly, clouds. In many enterprises today, these two paths are separate. Business managers are increasingly using the web to do business with each other and they are increasingly buying capabilities such as XaaS without the approval of IT managers. Why? First, because the requirement is so different; most IT departments can’t easily provide or support because the funding model is so different. IT has a yearly budget based on overhead recovery, but the business wants immediate implementation and to pay for what its uses on a scaled model in response to an immediate market issue. Understood correctly and implemented wisely, clouds bring these two worlds together for the overall benefit of the enterprise, business managers and IT depts. Misunderstood, the bigger the consequences and the worse the implementation. This results in the gap between what the business wants and does, versus what IT needs to do, becoming even more pronounced! To try to and take some of the heat and hype out of ‘clouds’, we refer to the need for an ‘Infostructure’ to fill the gap. The need to connect the externally-focussed business activities of buying and selling using business technology based on the internet and web, with the internally focussed business activities of adding value and administering/operating using information technology on its own existing technology base. An obvious and simple illustration of this might be that virtualisation may be of limited value in improving flexibility in a stable IT environment that has a clear set of users and applications. However, when there is a need to support business departments with services on demand – the so called private cloud – it becomes a necessity. More importantly, the business case and justification is immediately changed. Do you believe business managers and individuals in your enterprise are already deploying solutions unconnected to existing IT by buying external services? The answer seems to be about 80% of IT managers think so, but can’t prove it. Well, here is a simple tip: take a look at the corporate credit card bills for the name of XaaS providers, but be prepared for some pretty alarming results. Then think about the real issue, an infostructure to bridge between two very different environments!