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Read exclusive Straight Talk insights on the role of IT in digital transformation and get a brief overview of technological advancements, with Steve Lee, CIO, Changi Airport Group.
According to IDC, 55% of enterprises will be compelled to upgrade their existing infrastructure by 2020, and deploy new facilities to support advanced applications and new IT systems. Data aggregated by SRG Research indicates that in 2017, enterprise IT infrastructure spending rose by 3% on an annualized basis, reaching aggregate revenue of $113 billion over the last four quarters. Further, IDC predicts that by 2020, 60% of the chief information officers (CIOs) will complete infrastructure and application re-platforming by leveraging mobile, DevOps, and cloud, accelerating digital transformation in enterprises. These trends indicate that infrastructure digitization is rapidly becoming one of the most critical areas of investment for enterprises.
IT infrastructure modernization starts with an assessment of the existing systems
Organizations beginning to digitize their IT infrastructure and operations are exploring numerous models and systems with which to revitalize their existing platforms. Implementing a strategy for physical to digital transformation is essential for successful and seamless organizational change. The reality on the ground, however, is obviously more complex.
Organizations frequently start their digital transformation by spending on new technology and talent without assessing their existing infrastructure. Gartner warns that through 2020, 80% of these transformation projects will not achieve their cost-saving targets, owing to the failure to address complexities in legacy systems.
A recent study showed that depending on their size, scope, and data complexity, companies can use different approaches to improve business agility and performance. The focus, however, needs to on certain key areas such as:
- Ensuring a clearly articulated vision of the company’s goals
- Following policy guidelines rooted in their transformation strategy
- Reevaluating and modifying the approach taken in response to new learnings over the transformation period
- Establishing appropriate governance across the enterprise to manage the transformed IT infrastructure
Enterprises are blurring corporate functional lines
Research by ESG Global, found that 69% of senior IT executives believed that their IT environment is more complex now than it was two years ago. In addition to which Gartner says that IT is already poised to support complex and distributed applications by leveraging new technologies that are spread across systems in multiple locations, such as public cloud, hosting providers, and on-premises data centers. This calls for a synergy between strategy, technology, and operations that is sustainable and converges to align business functions, shifting the focus toward streamlining business processes and enabling new advancements.
According to Transparency Market Research, the global converged infrastructure market is poised to grow at 22.4% CAGR, between 2017 and 2025, and reach $76.26 billion by the end of the survey year. And IDC reports that in the third quarter of 2017, converged system market revenue increased by 10.8% year-over-year.
The 21st Century enterprise is moving towards a convergent IT infrastructure, where IT resources, such as virtualization, servers, storage, and networking are holistically managed, allowing the IT staff to focus on business-centric tasks relevant to growth.
The “cloud-first” journey is crucial for leveraging next-gen technologies
According to IDC’s Worldwide Quarterly Converged Systems Tracker, the third quarter of 2017 witnessed a consumption of 1.96 exabytes of new storage capacity, which was 30% more than that in the same period of last year due to converged systems. According to another IDC survey report, by 2019, about 50% of surveyed organizations plan to initiate efforts for rationalizing and accelerating the next-generation workloads.
Burgeoning data volumes and the demands of heavy workloads while running advanced applications has increased the need to rationalize and scale IT infrastructure, particularly for data centers and cloud services. In this arena, cloud services supported by converged IT networks are helping enterprises make data-driven decisions and lending them a competitive advantage. IDC estimates that by 2021, enterprises will be spending over $530 billion on cloud services and cloud-enabling hardware and software, which has been undergoing a significant diversification over the last ten years. Major areas of diversification include:
- Expanding toward the edge – By 2020, over half of the consumer-facing companies will invest heavily in establishing computing, storage, and network components on the edge, more than in core data centers.
- Leveraging multi-cloud environments – By 2020, more than 90% of organizations will host their IT on multiple cloud platforms, with a third of them operating in a multi-cloud environment.
With the rise in cloud computing and converged systems, enterprises are also achieving automation on several fronts. Robotic process automation (RPA) has enabled financial firms to accurately detect credit card fraud, while thanks to big data analytics, manufacturing companies are running predictive maintenance operations on their factory floors. A recent study by McKinsey that correlates digitization to productivity and bolsters the case for digital evolution in businesses reports that in the next ten years, productivity growth is set to “recover and see the potential for at least 2% each year, with 60% coming from digital opportunities.”
IT infrastructure shifts to a software-defined environment
The trend towards software-defined infrastructure (SDI) is well on its way with IDC and ActualTech reporting that by 2019, 74% of IT operations will have deployed SDI to keep pace with digital transformation. Peter Monclus, Chief Technical Officer at VMWare, explains how networking adapts to the digital evolution of physical IT infrastructure: “Networking is no longer considered an individual component of the overall tech solution, and it is not only limited to the data center. With public and private clouds, remote offices, mobile devices, and NFV, networking is becoming the new layer that everything will run on.”
In the past five years, the SDN market has grown from $406 million in 2013 to over $6.6 billion in 2017. IDC predicts that the growth will continue and reach $13.8 billion by 2021, growing at a CAGR of 25.4%. With advancements in machine learning and network automation, intent-based networking powered by AI is poised to emerge as the next big disruption. Although currently, less than 50 enterprises have adopted the trend, Gartner predicts that by 2020, the number will go up to over 1000. As networking becomes smarter, the world is quickly embracing AI and machine learning technologies that will lead to truly autonomous systems of support.