Why Do IoT Infrastructure Investments Lag Behind Other IT?

What is Happening?           

Not a day goes by with no mention of the Internet of Things (IoT), whether in terms of news, analysis, opinion, or vendor/provider announcements. So far this week, we count more than a dozen news/blog/announcement items, with several just today from true IT Master Brands, including IBM and ARM (joint enterprise IoT platform), Facebook (Parse mobile app development platform), and Samsung (SmartThings consumer device/home hub).

The data from our 1Q2015 global IT/Cloud infrastructure survey suggests that most user enterprises are at least trying to prepare for the IoT reality with significant upgrades to their existing infrastructure. Figure 1 shows that more than two-thirds have made or are making IT infrastructure investments in support of IoT management initiatives.

Figure 1: Infrastructure Upgrades for IoT Are Underway

1632RA_figure1

Source: Saugatuck Technology global 2015 IT/Cloud Infrastructure survey, n=327

The opportunities for almost any type of user enterprise to profit and improve using IoT capabilities are tremendous. The challenge for these enterprises is, will they make enough of the right infrastructure investments soon enough?

Saugatuck’s research indicates an array larger-scale IT infrastructure investments across the board. Including all types of IT workloads, an average of 82 percent of firms are making, or planning to make, IT infrastructure investments to upgrade and improve their capabilities through 2017.

Unfortunately, as Figure 2 illustrates, that average drops to 69 percent when it comes to infrastructure upgrades to handle and manage the emergent IoT – the smallest average for any IT workload type. Continue reading Why Do IoT Infrastructure Investments Lag Behind Other IT?

Digital Business: Not Your Father’s Data-driven Business

Every business becomes a digital business and the use of big data, advanced analytics, and new digital business platforms radically reshape the nature of what it means to be a data-driven business. No longer are data-driven business those that use it to manage finance and operations. Rather, a data-driven business embeds data and analytics in digital business platforms to help customers and suppliers make their own near real-time business decisions.

Digital business footprints are obvious from the early successes of Amazon, Google and Netflix. The same is true of the digital transformations now underway in every industrial sector including those occurring at Argos, Atom Bank, Burberry, GE, Hulu, Microsoft, Siemens, Starbucks, Target, Tesco, T-Mobile USA, Uber and Walmart among many other enterprises. Digital business occurs through organic growth, spinouts, and new startups that at once challenge and support existing lines of industrial era businesses.

Digital businesses deliver competitive advantages as industry boundaries blur, coalesce, merge and as traditional approaches to data-driven business are augmented, complemented and assaulted. However, making the transition to digital business means the capabilities of data-driven business must be expanded beyond those of traditional data-driven business. Continue reading Digital Business: Not Your Father’s Data-driven Business

From Technology Primacy to Business Primacy – Mapping IT Capabilities Across Eras

A recent Strategic Perspective published for subscribers of Saugatuck Technology’s Continuous Research Services laid out a simple vision of three eras of enterprise IT – Centralized, De-centralizing, and Boundary-free Business – and why the shift from the second to the third has been so traumatic, and has generated such fear, uncertainty, and doubt among enterprise IT organizations and the external providers serving them. A new Strategic Perspective uses input from CIOs and CTOs to create a heat map model that illustrates key shifts from one era to the next, in the context of change from Technology-first to Business-first IT capabilities, and weighs the effects of these on internal enterprise IT organizations and external IT providers.

The net of it all: The core nature of enterprise IT has shifted from Technology primacy to Business primacy, and that is what has changed the fundamental nature and value of enterprise IT – and of the external providers serving enterprise IT. Most of us are aware of this, but we have not been able to visualize it easily, and so have lacked an effective means of qualifying the change and identifying where investments and planning need to shift, especially as regards the capabilities needed to make IT work for the enterprise. Saugatuck’s model enables this visualization to be adaptable to individual enterprises.

Because of the shift away from Technological primacy, many traditional external IT providers (e.g., VARs, SIs, outsourcers) are losing much of their influence over many aspects of enterprise IT and business. This is not to say that what they provide is unimportant and not valued; instead, more value is being attached to other, more Business-first, types of capabilities (e.g., process-specific, market-specific knowledge and expertise). And yes, many providers have decades of process- and market-specific skills and knowledge, but in the past, these tended to be applied in ways that emphasized the specific technological characteristics of providers’ offerings. The value expected by enterprises is no longer in the offerings, but in how the offerings improve their business. Continue reading From Technology Primacy to Business Primacy – Mapping IT Capabilities Across Eras

The New, Scary, Nature of Enterprise IT

The value, and roles, of internal and external IT capabilities has always been evolutionary, but it has not fundamentally changed in nature for decades – until recently. The concerns, misgivings, and challenges that we encounter among CIOs and other enterprise IT leaders and managers are rooted less in disdain for Cloud or fear of job security, and more in that they simply have not experienced such change before, and neither have IT markets in general.

For the most part, the skills, technologies, practices and policies developed in the early days of business IT translated well through the decades by being built upon in a relatively steady, often predictable, incremental fashion. The nature of business IT today is still built on, and building on, previous generations and eras.

However, today’s increments of change vary more than in previous eras, from microscopic to orders of magnitude. And these changes are increasingly quantum shifts, regardless of their size – i.e., even the smallest tweaks in what’s being developed, adopted, and adapted are changing Business and IT fundamentally. IT has a new, core nature, and it is one of unpredictable amounts of change. Continue reading The New, Scary, Nature of Enterprise IT

IBM’s Bernie Meyerson Set to Keynote 2015 Cloud Business Summit NYC

We’re pleased to announce that Bernie Meyerson, VP and Chief Innovation Officer at IBM will deliver the opening keynote at Saugatuck Technnology’s upcoming 2015 Cloud Business Summit, taking place on November 4th at the Yale Club of NYC.

In a presentation entitled “Information Technology: A Tectonic Shift,” Meyerson will explore what’s next after Moore’s Law – as the advent of new forms of parallelism become a leading framework defining IT over the planning horizon.

Since the invention of the first solid-state computers, IT has relished in consistent, predictable advances in performance that were quite easy to assimilate – as the number of transistors on a circuit chip would doBernard Meyerson Picuble approximately every two years. Fortunately for the IT industry, increasing circuit density yielded increasing performance while reducing costs ranging from device manufacturing to electrical power consumption. Such performance increases were easy to exploit . . . and addictive. Unfortunately, as circuits have now approached the dimensions of only a few atoms, the end of increasing circuit density is near. In essence, Moore’s Law has been repealed. Meanwhile, technology advances such as predictive analytics, big data, and mobility (among others) have only continued to drive the need for IT capacity at an accelerating pace.

The consequence is that designers of IT application and infrastructure architectures will have to turn in a new, more challenging direction. As Meyerson will share, one likely scenario is Continue reading IBM’s Bernie Meyerson Set to Keynote 2015 Cloud Business Summit NYC

The Next Wave of Consumerization of Business IT is Now

What is Happening?           

The first wave of consumerization of IT, which includes Social, Mobile, and the UI elements popularized in Cloud applications have now made their way thoroughly into the enterprise. Less and less business software is developed in-house and the majority of new software now has mobile components. Social IT now permeates most enterprises, and streams, feeds, and quick collaboration now make up a major part of many business applications, from Finance and HR, to Customer Support and CRM. Of course, new SaaS applications are not totally ubiquitous yet. And many companies are still operating on legacy applications, or traditional infrastructure.

But the pace of innovation does not lag, and so the next wave of consumerization is already ramping up. And in many cases, companies that have traditionally been laggards in technology adoption – often because new technology was not a competitive advantage – feel differently this time around. Industries like manufacturing, retail, logistics and supply chain are investigating and producing new, digitally enabled products based on the next generation of consumerization, which includes IoT, Drones, Virtual Reality, Autonomous Vehicles, and Indoor and Outdoor geospatial data. These trends, coupled with advances in rapid prototyping – 3D scanning, printing, and machining – are enabling companies that had little to gain from the revolution in knowledge worker technologies to produce world class products and services that can change their business. (1623RA, Cloud-driven “Leapfrogging” Alters Linear Nature of Business IT Change, 21 Aug 2015)

Why is it Happening?

Consumer-driven activities have primarily benefited from the application of lab-engendered IT breakthroughs to products and services. Companies like Apple, Google, and Facebook have introduced major new products, as well as made major acquisitions, to drive that continued innovation, and it has paid off. These innovations have had a bubble-up effect on enterprise IT, and this trend seems unlikely to change or slow any time soon.

As enterprise IT falls under ever-increasing cost pressure, and continues to face upheaval as it realigns with changing business needs (1573RA, New Report Identifies Problems and Fixes in CFO-CIO Synchronization, 07May2015), business innovation will continue to be driven by consumer behavior with, and adaptation of, IT, where the market for new services and devices is characterized by both rapid iteration and failure, as well avoidance of ossification. While there are often large costs to changing business applications or technology stacks in the enterprise, consumers can easily change devices and platforms with little or no cost. In this kind of environment, IT vendors and users both benefit from consumerization leading enterprise IT. Continue reading The Next Wave of Consumerization of Business IT is Now

Risky Business: Incorporating Analytics in the Engine of Risk

As Enterprise Risk Management (ERM) continues to advance as a concept, linking financial, operational, and GRC risk management across the enterprise, new opportunities are emerging from the application of Big Data. Business is about risk; and management of an enterprise is about risk management. Risk and opportunity are inextricably strictly linked, per the famous and somewhat mistaken Chinese character which has been a business management meme since the 60s.

Application of Big Data and Advanced Analytics to risk management can create enormous potential for a change in how firms are run. While current application of analytics to this area tends to remain relatively small and limited to niche areas such as fraud detection, immediate market changes, regulation and bug forecasts, and the like, the capabilities are growing exponentially. Application of Advanced Analytics directly to business processes can create a mechanism of advanced performance in which individual processes are modified in accordance with an immediate analysis of risk. Such modification and would enable an intelligent form of agility, permitting companies to respond to events where they might occur within markets, supply chains, business conditions, and other areas. This will have different effects in different industries, initially impacting financial services and other professional services that can be immediately tailored to meet changing conditions. Yet we can see the potential for integration with manufacturing, software development and the like. Continue reading Risky Business: Incorporating Analytics in the Engine of Risk

CenturyLink: Setting Sights on Tomorrow’s Cloud

As Cloud adoption continues to broaden (across enterprises) and deepen (within enterprises), enterprises are not only gaining keener understanding of Cloud offerings – they are preparing for, and moving to, more types of hybridized IT environments that leverage Cloud-based infrastructure in more ways (1613STR, Beyond Agile, Beyond Hybrid – The Malleable Infrastructure, 24July2015). Enterprise IT organizations especially are maturing with regard to Cloud, from an initial focus on infrastructure cost reduction to a more sophisticated – and more broad – emphasis on establishing an IT infrastructure that will support and enable the transformation of their company to digital business capabilities and profitability (1553SSR, 2015 Infrastructure Survey: Next-Gen IT – Cloud on the March 01Apr2015).

We believe that all Cloud infrastructure and managed services providers understand this shift, but some are better at bringing it to market than others. One that is making substantial progress toward enabling and delivering more hybridized and digital-business-friendly enterprise IT infrastructure is CenturyLink, which updated Saugatuck in a private briefing on August 18. CenturyLink laid out a well-articulated strategy for continuing its evolution from a traditional hosting provider to being a provider of Cloud-first, hybridized, enterprise-grade IT and business offerings, ranging from infrastructure to professional services. They’ve demonstrated this through a fairly straightforward combination of organic and acquisition-based growth, including data center expansions in six markets – Boston, London, Minneapolis-St. Paul, Phoenix, Seattle, and Washington D.C. – in the first half of 2015, along with the following recent acquisitions:

  • April, 2015 – acquired Orchestrate, a provider of managed database services for rapid application development;
  • December, 2014 – acquired Cognilytics, a provider of predictive analytics and big data solutions; and
  • December, 2014 – acquired DataGardens, a Disaster Recovery-as-a-Service (DRaaS) provider.

Continue reading CenturyLink: Setting Sights on Tomorrow’s Cloud

Saugatuck Research: Private Clouds Will Grow Fastest

In 1Q2015 Saugatuck executed a global Web-based Cloud Infrastructure Survey and compile the responses from 327 IT executives spanning major geographies and business sizes. The survey results are summarized in the 73 page Strategic Report 2015 Infrastructure Survey: Next-gen IT – Cloud on the March, 1553SSR, published on 01Apr2015. Subsequent, in-depth analyses of the survey responses continue to yield additional insights. A just published Strategic Perspective focuses on the respondents’ projection that – contrary to popular views – over the next two years, the use of Private Cloud will increase faster than the use of Public Cloud for existing and future application workloads. Specifically, respondents projected the usage of Private versus Public Cloud to shift from a 27% to 73% ratio in 2015 to a 40% to 60% ratio in 2017.

As a result of ongoing conversations with enterprise IT executives and with representatives from Cloud providers, Saugatuck has identified that the reasons for Private Cloud preferences are far from simplistic. Rather, some of the inhibitors to selecting Public Cloud may be insurmountable in the near term…or longer. Saugatuck has identified the following four categories of challenges that are inhibiting the usage of Public Cloud: Continue reading Saugatuck Research: Private Clouds Will Grow Fastest

Cloud-driven “Leapfrogging” Alters Linear Nature of Business IT Change

What is Happening?           

Over the last several years, many companies have been transitioning various processes, workloads, and applications to the Cloud. During that time, many have also been systematically modernizing their applications using newer generations of technologies. In large part due to the speed, cost, and utility of Cloud-based IaaS, PaaS and SaaS capabilities, more and more are deciding that, rather than modernize, they will instead migrate to one or more Cloud-based alternatives.

With this as a backdrop, though, it has been easy to overlook another important change in today’s IT environment: the accelerating decline, and potential demise, of the linear progression of business IT change. In an increasing number of cases, it is simply easier, and more enabling for the business, to leapfrog multiple stages of IT change to an entirely new state of competitive capabilities, without losing the necessary functionality, interconnectivity, or data.

Why is it Happening?

It used to be that organizations were locked into certain technology stacks, which progressed version by version ad infinitum. The result of this, was that innovation was stifled in the face of the continuous progression of incremental change.

There is nothing wrong with incremental improvement, but it is also true that with limited resources in IT departments, and shrinking IT budgets, which have only recently started to recover, the opportunity cost in time and organizational focus was heavily diverted away from innovation. Traditionally, this led to an unofficial 80/20 rule, where 80 percent (or more) of the IT budget was spent in day-to-day operations, maintaining and managing continuous, incremental change, while 20 percent (or less) was spent on new activities, innovations etc.

The evolution of the resource-on-demand model in the Cloud has been the driver of this shift. The widespread, instantaneous access to resources has made experimentation at scale and speed possible, even in budget-constrained environments. The Cloud in turn kicked off increasing waves of development in automation, and new programming frameworks and languages that were designed to make development and deployment at scale easier. Continue reading Cloud-driven “Leapfrogging” Alters Linear Nature of Business IT Change