I had an excellent conversation last week with Muddu Sudhakar, one of my favorite IT thought leaders and visionaries.

Muddu is a serial innovator and tech entrepreneur. His impressive resume includes executive leadership roles at Splunk, ServiceNow, VMware, Pivotal and EMC.

In our conversation, Muddu helped me realize just how far the cloud revolution has evolved, and how enterprise cloud services are transforming the IT industry.

From my perspective, the shift is especially dramatic in IaaS (Infrastructure-as-a-Service) offerings. Essentially, cloud providers have taken IaaS and turned it into Solutions-as-a-Service. That means you're no longer just buying time on someone else's servers - you're buying actual business results. That's a huge difference that will fundamentally impact the IT universe. Unquestionably, it's a genuine paradigm shift.

"Instead of renting compute by time, you're renting it by function," says Muddu. "Instead of renting a computer by the day or month, you're renting it to perform a specific function."

It also seems apparent that the major cloud providers will bake AI capabilities into their offerings. In other words, AI will become a regular feature of Infrastructure-as-a-Service and for SaaS applications. 

What does that mean for the CIO? There will be new SaaS and enterprise applications with native AI/machine learning built inside to improve customer experience and drive new business models. It means you won't have to hire legions of data scientists and consultants to leverage the power of AI on a routine basis.

AI will disrupt customer service and support by fusing user behavioral analysis, application interactions, and infrastructure activity to enable automated personalized user engagements with proactive and predictive notifications and resolutions, says Muddu. 

Similarly, cloud/IT Ops will be disrupted by moving from manual-driven workflows to automated root cause analysis, service health and performance monitoring and outage prediction. 

Again, this represents a major shift in the status quo. Instead of hiring incredibly expensive AI specialists to write code, you'll be showing the business leaders at your enterprise how to use ready-made AI products and solutions.

Clearly, this will be a brave new world. On the one hand, cloud providers will be offering far more functionality than ever before. On the other hand, IT departments will be under pressure to trim staff and reduce headcount. You can almost see the day coming when the IT department will consist of two people: the CIO and the deputy CIO.

To be totally candid, that's an unsettling image. But that's the way automation works: More machines, greater efficiency and fewer people. 

It will be up to us as IT leaders to determine how quickly we go down that road.  We still have some years before the IT department is staffed mainly by AIs. But that day is coming.