Recently, CIO UK interviewed JP Rangaswami, chief scientist at Salesforce.com about where cloud computing is going. As the former IT boss of BT, he has an extraordinary perspective on the technology trend, both from the customer side and as a vendor.

Unsurprisingly, his view is aligned with his company’s interests, but now that cloud has begun to mature as a service, he has some useful insights into what the next stage is.

Rangaswami is pretty dismissive of proponents of private cloud models, which he sees as a zero-sum game for CIOs. He says private cloud services only make sense if you have lots of business units buying in.

If any unit drops out, the rest have to take up the slack in funding, rendering the model less attractive to each contributor.

In the end, the CIO has to bear the risk themself and private cloud only works in an upturn when individual business units aren’t so concerned with their own bottom line.

For Rangaswami, public cloud, where many different organisations share the investment burden, protects the CIO in a much stronger way.

“As a CIO, I realised it wouldn’t work as a model unless someone else outside the company paid for the scaling risk,” he said. “That risk had to be taken out of my environment.”

Here are some of the trends around cloud services that he identified:

1 The Cloud term will disappear:
For Rangaswami, the term Cloud has become obsolete as user’s perceptions have refined. He said Salesforce itself has moved beyond the mechanics of the model to focus on the benefits it represents.

Related:

When they are considering cloud services, companies are buying flexibility and capability for transformation, says Rangaswami.

“We are in the business of transforming our customers’ business by reducing latency between them and their customers,” he says. The next stage of conceptualising cloud services will be in terms of business investment models.

2 Investment models have to change:
As a CIO, Rangaswami thinks the biggest decision will be about what IT needs to own.

“The thinking about cloud will become a mentality about what you need to own. It is about a business’s relationship with its environment.”

Rangaswami believes IT teams are still hooked on the idea of belt and braces investment strategies, where systems are built to cope with extreme situations. He says they need to start applying the decision making processes they use in other parts of their lives.

“You don’t go out and buy a car that is big enough to carry everything you own. If you are moving house, you hire the appropriate vehicle. It’s about owning for average.”

In the same way, IT investment models will have to focus on the normal-day scenario, leaving the spikes for cloud services.

3 The need to launch new products quickly
At the moment, the business drivers for moving into cloud services are around cutting costs. Rangaswami thinks this motivation will change.

He says “Say that to a customer and they will wonder what difference it has made to their lives.”