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Cloud computing is the latest technology trend to capture the attention of businesses, consumers, and investors alike. This emerging model in which software programs are accessed through the Internet is being touted as The Next Big Thing. But for corporate America, there’s much more to the revolution than outsourcing data, applications, or hardware. PwC’s technology leader Paul Horowitz and analysts Bo Parker and Vinod Baya introduce the vision of Evergreen IT, which builds upon cloud-computing principles. Gone are the typical technology barriers—high costs, complexity, and incompatibility—replaced by a technology foundation that is both enduring and flexible. Here’s what the future of true business agility looks like and how companies are taking the first steps toward getting there. 

Even if you aren’t a techie, chances are you’ve heard plenty about cloud computing. Likened to previous technology revolutions— the personal computer, the Internet, wireless computing, and Web 2.0—that have changed the ways we live and work, it has made its way into the public consciousness via front-page news articles and magazine cover stories in the popular press. And with the likes of Amazon, Google, IBM, and Microsoft—among many other technology companies—getting in on the act, it’s certainly causing a stir.

After all, cloud computing may very well revitalize the tech industry, empower consumers, and level the playing field for smaller, Main Street businesses. But the real question is, What does cloud computing mean for your business?

It could mean the difference between a business that is agile and one that stagnates. But the path to agility is not the obvious one—often requiring a shift from internal to external Internet-based technology resources. Instead, we view cloud computing as the basis for a whole new approach to business technology. We call it Evergreen IT.¹

Under this new paradigm, enterprise technology no longer results in a growing mountain of siloed, legacy systems that are so complex and costly that you can’t easily change the way you do business. Evergreen IT creates the potential for continually refreshing IT capabilities without distracting the business and for staying in alignment with business needs.

Understanding Evergreen IT

Evergreen IT builds upon the core concepts of cloud computing and addresses the unique pain points experienced by larger organizations. But just what is cloud computing? While the term has been defined in a number of ways, it is generally applied to a model in which a company outsources the ownership and management of some part of its IT—business applications or storage, for example—to a third-party provider like Amazon, Google, or Salesforce.com. This model changes business computing in a couple of important ways: (1) It is modular, effectively separating software applications from underlying infrastructure. And (2) it is standardized, relying on the same resources that many different customers share. With cloud computing, a business forgoes a hefty capital expense and ongoing maintenance costs, while the service provider benefits from economies of scale.

Cost-effective technology is a powerful promise, but Evergreen IT doesn’t stop there. The real story is that cloud-computing service providers set up and manage technology in a way that is disruptively more agile and more reliable than most enterprise environments, as well as more cost efficient. Evergreen IT, then, applies these principles inside a business, fundamentally changing the way technology supports the organization.

To your CIO, such an environment might seem like the Holy Grail. It represents an enormous shift from where we are now: Today, legacy technology soaks up much of the available IT budget and is a primary barrier to IT responsiveness and overall business agility. Disparate collections of aging technology are dedicated to individual workloads. And in order to support key business processes, companies often maintain ungainly servers and storage devices that are hardly used. And to keep these legacy systems running, the business must retain data center staff along with that staff’s idiosyncratic, nontransferable knowledge.

A major company transforms its technology

Evergreen IT changes things through a new mind-set as well as powerful software that avoids the creation of legacy complexities and costs. To really understand the promise of Evergreen IT, consider the technology transformation that engineering and construction giant Bechtel Corporation has begun. At Bechtel, big changes occur in two dimensions: the geographies where it operates, and an elastic workforce of 44,000 employees, plus contractors, subcontractors, and supply chain partners.

The company undertakes some of the world’s most daunting construction projects, including the Channel Tunnel linking England and France, the Hong Kong International Airport, and the Tacoma Narrows Bridge near Seattle. Each new multiyear, multibillion-dollar construction project is much like building a new business that has unique staffing needs, geographic challenges, and a sizable technology component.

Evergreen IT changes things through a new mind-set and powerful software that avoids the creation of legacy complexities and costs.

Some years ago, Bechtel required 60 to 90 days to get the technology ready for a new project. Today, however, the company can get the IT for most new projects going in a day or two—a vast improvement that illustrates how IT agility can support business agility. By adopting the leading practices of cloud-computing service providers for its own infrastructure, Bechtel has transformed its systems and processes.

“We were not in pain with the old state, but we did see that we would have to take a new approach to have the flexibility for what we needed to do going forward. We had already completed a comprehensive rationalization process and brought about other needed efficiencies. What we needed going forward was a global, flexible collaboration platform,” says Bechtel’s senior vice president and CIO Geir Ramleth.²