Begin by understanding how business works and how value can be created. All firms compete on a business model which is based on a small number of core competencies. A core competency is usually knowledge-based and enables the firm to create unique value for its customers. A firm is unlikely to have more than three or four core competencies. The delivery of software applications to the firm’s users, which is a short-hand description of operating IT infrastructure and all of its components, is not a core competency for virtually all firms. Any capability within a firm which is not a core competency is scanned carefully by the leaders of the business to see if a lower cost or higher added value alternative may be available. The bottom line rules the CEO’s life and most CEOs view IT as a cost centre, not a value generator. This applies to a business of any size or location.Many large business and government agencies moved to an outsourced IT delivery model years ago. Today, around 45% of New Zealand’s total IT expenditure goes to the traditional IT outsourced market segment. Until recently, owners of smaller enterprises did not have a viable alternative to investing in and managing an in-house IT system.With the emergence of cloud computing application delivery models into mainstream adoption, this situation has become very different. Firms ranging from single person start-ups to 1,000 user organisations now have a lower cost alternative to an in-house system.The objection of security in the cloud is rapidly disappearing as it becomes clear that a competent cloud computing service provider will likely provide stronger security than a typical in-house system. The principal reason for this is that IT security is a core competency for a cloud provider and the firm will quickly die in the marketplace if they fail to deliver strong security. In addition, obfuscation, fear-mongering about cloud security and seeding uncertainty and doubt are classic tools used by incumbents threatened by change.While cloud computing may have been dismissed to date by IT professionals as a buzzword or vendor hype, the reality has now dawned that this is for real.What does all this mean for the system administrator managing, for example, Exchange servers, application servers, networking, back-ups and communications? The systems administrator may be employed directly by the firm or be a service engineer employed by an IT reseller providing similar services to the firm.Consider, for example, the task of delivering email. A competent cloud service provider has highly resilient and scalable resources which, once set up, can add incremental email users in an automated and self-service manner. When upgrades take place, all users are upgraded at once and the time required to upgrade is not much more than is required for any single firm’s own in-house system. The economies of scale for infrastructure and skills, as well as only needing to upgrade once for all users belonging to multiple firms, provides compelling benefits to the cloud service provider’s clients.Compare this situation with individual Exchange servers spread over multiple firms, each with discrete systems and lower levels of resiliency, together with separate support requirements for each instance of Exchange.In addition, running email in-house provides no more competitive advantage to a firm than, say, delivering packages directly instead of using a courier firm. As business leaders understand that they have a viable alternative, they will shift.What about the delivery of other applications such as accounting, ERP, CRM and other specialty software? What about custom-written software? The answer is exactly the same in principle. Many firms have migrated the full portfolio of their applications to the cloud, including custom-written apps. While some business leaders may initially be reluctant to move to the cloud, they will recognise that large organisations got over this psychological barrier years ago and that their peers are rapidly adopting cloud computing to secure even more powerful and competitive benefits.No transformation of an entire industry happens seemingly overnight. However, it is now clear that the momentum is unlikely to slow down. What should a systems engineer or administrator do to manage his or her career under this unrelenting pressure?One path to take is to encourage their employer to build an internal cloud. Many recent USA surveys show internal clouds to be more prevalent than external clouds. Why is this? The primary reason is that traditional IT vendors and their distributors view cloud computing as a scary disruptive business model innovation. The longer they can cause confusion in the marketplace and try to convince anyone who will listen that, in essence, virtualising servers in-house equates to cloud computing, the longer they will protect their existing business models and delay the day of reckoning. Space does not permit a full explanation here, but an internal computing cloud largely misses the whole point of cloud computing and delivers few business benefits.There is no such thing as job security for anyone. Once systems administrators and engineers realise that resistance, over the medium and long term, is futile they should appreciate that the role, as it is understood today, will largely become redundant.The good news is that most IT professionals will have addressed fast obsolescence of skills over his or her career to date. Rapid change is inherent in the IT industry. Now is the time to adapt or lose. It is better to embrace the cloud than resist it. Treat the cloud as a friend, not as an enemy. But what can be done to prepare for the future?The short answer is education. Anticipate the skills that will be needed and follow an education path to get there. Learn all about what cloud computing is and how it can help businesses improve performance. Understand how cloud computing greatly enhances agility and dramatically reduces the deadweight of complexity.Learn to act as the business owner would. Understand your employer’s business model. How does the business make or lose money? How does the business work? Take the lead and look for opportunities to introduce new cloud services to create value and drive innovation. Innovation is all about converting ideas into new revenue streams. Value creation may include cost reduction, improved product performance, improvement in quality, reduced cost of distribution and improved information analytics about customer usage. A systems engineer usually has a very wide understanding of the firm, often across silos of business units, together with an aptitude and skill in adopting new technology. An awareness of new and emerging technology and how it may be embedded into the firm’s products and services to create value will likely be the most career-enhancing strategy to take. The more a systems engineer knows about business and figuring out financial return on investment, the more likely they will remain relevant. What new roles will cloud computing generate and what other roles can system administrators grow into? Every firm will continue to require the services of a technically knowledgeable person to help manage the relationships with external cloud service providers. Building "soft” business skills such as negotiation, contract management and interpersonal skills would be a good personal investment.The demand for the integration of cloud apps between themselves and with existing company owned apps, however they are delivered, will grow. The challenge of turning large and growing volumes of company data into value creation for the firm will accelerate. Integration and business analytics skills will be highly sought after. The IT professional’s knowledge and aptitude for technology is a strong suit and if this is combined with the development of new business skills, a deep knowledge of the firm and its business model, the individual’s career prospects will look much brighter in the new cloud computing world. For a full explanation of why an internal computing cloud misses the whole point of cloud computing and delivers few business benefits, download the white paper ‘Should You Build An Internal Computing Cloud?’ at www.OneNet.co.nz/cloud.