CEOs and the Cloud Computing Knowledge Gap

What CEOs need to know about the cloudThe CEO. Also known as the boss, the big cheese, the top dog. But no matter what you call him or her, the CEO is where the buck stops. They make the final decisions, and accept responsibility for those decisions. That means that in addition to being an inspiring leader, they need to have their finger on the pulse of every component of their company, including accounting, human resources, marketing, sales, legal, operations, and of course, IT.

Because it’s nearly impossible for one person to be an expert in all areas, CEOs are often called upon to be visionaries, fearlessly leading the company into the future. In order to remain focused on the big picture, they have to rely upon the expertise of others in the C-Suite, including the CFO, CMO, COO, and the CIO. However, many CEOs attain their position by moving up the ranks within finance, marketing, or sales—very rarely do they come from an IT background. So while they will often see eye-to-eye with the lead in those familiar departments, their thoughts on technology may completely differ from the CIO. 

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CEOs Are Getting More Active in IT Decisions

Today, with cloud computing revolutionizing the IT landscape and evolving at lightning-fast speeds, a wide disparity between CEO and CIO knowledge can cause conflict. Studies are showing that CEOs are getting more active in technology decisions, even if they lack understanding in the matter.

According to a recent Deloitte survey of 500 mid-market executives, over 60% say their company’s CEO and CFO have some involvement in determining the company’s technology path, whether that’s moving to the cloud or simply deploying mobile technologies to better connect with customers. In addition, over 30% of respondents say the chief is actually “leading the charge.” While it’s encouraging to see CEOs taking an interest in technology—an area that many used to want nothing to do with—knowledge gaps can lead to poor or short-sighted decision making despite the best efforts of the CIO.

4 Common CEO Knowledge Gaps To Bridge

CEOs don’t need to know every intricacy surrounding infrastructure and other highly-technical aspects of cloud computing, but there are some gaps that need to be filled so that technology executives can make the decisions necessary for IT success with support. These will be especially important when working with a CEO to migrate to the cloud, repatriate from a public cloud, or switch cloud providers.


THE CEO GAP: The Cloud is Dangerous

The average cost of a cyberattack for enterprises in 2017 was $1.3 million ($117,000 for small and medium-sized businesses), and ransomware blackmailing has become a $2 billion criminal industry itself. This makes CEOs nervous. To ease their fear, CIOs must explain that reputable cloud providers have a highly-vested interest in keeping clients well-protected by employing the most up-to-date security features available; after all, one breach can impact every client they have and potentially destroy the provider’s entire business. In addition, these reputable providers offer strict physical safety features, including Uninterrupted Power Supply (UPS), Computer Room Air Conditioning (CRAC), data encryption, safe proximity from flood zones, hurricane structure rated facilities, 24/7 surveillance, and security (HID card, PIN, biometric access).


THE CEO GAP: The Cloud is Unreliable

A common concern of CEOs is that their data won’t be available when they need it. This is when they need to be shown the value of nines. Reliability revolves around uptime, and the industry standard is measured in percentages based on how many nines are included. CEOs need to know that high levels of uptime can be achieved with the right amount of nines. For example, 99% uptime (“two nines”) is the equivalent of three days of downtime per year; however, partner  with a provider offering 99.99% uptime (“four nines”), and downtime drops to under an hour per year—just a few seconds per day. Service level agreements (SLAs) will also detail acceptable performance parameters, applications and services that are covered, monitoring procedures, and a schedule for remediation if an incident does occur. Also included should be a liquidated damages section specifying the penalties the provider will incur if the terms of data protection in the SLA are not met. This ought to put the CEO’s mind at ease!


THE CEO GAP: Cloud Migration and Management is Difficult

This may be true if the company has a small and inexperienced IT team that’s working with a hands-off provider. However, CEOs need to know that the transition can be seamless when working with a reputable provider—a true partner—who will be with the company every step of the way. CEOs may also have concerns that if there are challenges, they or a member of their team will be waiting hours in a queue, just to get support from an unskilled overseas operator. When on the hunt for a provider, CIOs need to find a partner that will make themselves available through phone, email, or online chat 24/7/365 with U.S.-based technicians.


THE CEO GAP: The Cloud is Costly

If managed improperly, costs in the cloud can quickly spiral out of control; but CEOs need to put trust in the CIO and their choice of provider. With the right provider, companies can save thousands or even hundreds of thousands of dollars. Much of this is due to economies of scale; rather than purchasing substandard routers and software to save money, the cloud provides the power of shared resources, enabling users to share cloud space—and costs—with others, while gaining access to the best equipment at an affordable price. In addition, hardware needs (as well as the cost of repair and replacement) is the cloud provider’s responsibility. Because repair is up to the vendor, internal labor and maintenance costs are also reduced. Finally, the cloud allows companies to be free of equipment capital expenditures. By keeping servers off-site, companies can recover valuable real estate and reduce maintenance, electricity, cooling, and licensing costs by taking a “pay as you go” operational expense approach to the cloud, paying much like a monthly utility.

When CEOs have a better understanding of IT and cloud computing, they’re less likely to butt heads with the CIO and become more apt to trust their judgement. While in-depth knowledge is certainly not a requirement, these basics can bridge some of the more common gaps and instill trust in the IT team, the chosen provider, and the cloud itself. DSM, Florida’s predictable cloud provider, prides itself on the close relationships developed with clients. If you’re a CEO or you’re attempting to gain the support of one, contact one of our experts at 877-376-6381 to discuss what DSM can do for you.

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