Covanta Energy Corporation CIO Stuart Kippelman dared to ask the question on Real World IT: “What if the cloud becomes the primary data center, and SaaS is the only way applications are sold? Will there be a need for an IT department?”

He then proceeded to look at two options “IT is toast” and “The cloud is just another technology to be managed,” and analysed each.

It seems cloud computing is on everyone’s minds. What will the cloud do? What will it mean for IT and what can we achieve with it?

ComputerWeekly reported in June that IT departments will shrink dramatically in five years as cloud computing takes over. This conclusion was reached from a study implemented by  business advisory group CEB.

However, View From IT’s RIch Goddu notes that while cloud computing might change the way we think about new applications, it is not an automatic fit for saving money on new infrastructure.

“Cloud computing needs to be analysed and thought through independent of vendor marketing brochures and promises. They are not in this business for the fun of it. They are there to make a profit just like you. They may be able to save you a bundle, but you need to do the calculations and make the final call, not them. Take your time and do it right.”

While cloud computing is rapidly transforming information processes with many benefits to offer businesses, IT departments offer a unique advantage to every business.

Stuart Kippelman stated that “Well managed IT departments are spending more time on business initiatives that drive the company’s growth and revenue instead of work that just maintains the status quo. So the cloud is great — and the right direction — as it allows a shift from lights-on type work to more value-add work.”

He added that “There will be situations that require cloud services, and situations that require work to be done in-house. It won’t eliminate the IT department, or most of the roles. Over time, the cloud might even increase the IT department’s headcount needs. Think about the major shifts that have happened in the past. Standalone to the Internet, mainframes to servers, PCs to tablets, and phones to smartphones—each was supposed to make things easier, but instead it seems each has added to the complexity.”