It’s fall, and you know what that means: it’s analyst conference season. IDC recently kicked things off with its IDC Tech Outlook 2015 conference in Austin. As you might expect, the focus was on the usual innovation, disruption, mobile, Internet of Things (IoT), and so on, but with more nuance on how these work together and how they will affect IT.
In particular, IDC talked about its “third platform” concept, which brings together mobility, cloud, analytics, and social media. (This is as opposed to the “second platform” of servers and PCs and the “first platform” of mainframes.)
While the third platform isn’t new, the industry is now entering what IDC calls the “innovation stage” of the concept, and is defined by an explosion of innovation and value creation on top of the third platform.
According to IDC, businesses are changing:
- How they engage with customers
- The speed at which they deliver products and services
- How they innovate
- The reliability of their operations
- Their overall resiliency
Spending on the third platform is expected to grow nearly 20 percent by the year 2020—which, remember, is only a little more than four years away—while the second platform will shrink by three percent, predicted IDC’s Frank Gens, Senior Vice President and chief analyst.
“This means that legacy IT is going forward largely unchanged and will experience little additional investment,” writes Bernard Golden in CIO. “IT investment is skewed toward third-platform initiatives, even to the extent that some of the investment toward third platform is being funded by ripping out existing legacy environments — presumably by on-premises legacy systems being replaced by software as a service.”
Organizations such as John Deere, Pfizer, Disney and Wal-Mart are building their own platforms that allow developers to create apps that will push them forward, rather than trying to drive all innovation from inside the company, reports Susan Lahey in CMSWire.
And, by 2018, innovators—mostly startups—will have disrupted a third of the top 20 market leaders in most industries, particularly in retail, financial services, education and healthcare. “They’re operating in arenas of machine learning, using big data and the cloud to create learning analytic and medical diagnostic services, and they’re developing products around the IoT,” writes Lahey.
“Think of this as the long-anticipated period in which virtually each industry gets ‘Amazoned’ in its own way,” IDC predicted in its report, IDC Predictions 2014: Battles for Dominance — and Survival — on the 3rd Platform. “These disruptions will manifest themselves as cannibalization of cash cows, slowed growth, squeezed margins and declining market share.”
Plus, there’s some good news on the innovation front. Some predictions have muttered direly that the CIO is going to lose control of the IT department. More people are comfortable with technology and lines of business within an organization want to make a lot of their own choices about how they spend their IT dollars, said Rick Villars, IDC’s Vice President, Datacenter and Cloud. And these lines of business, particularly marketing, are getting a greater and greater share of the IT budget.
Villars suggested that would actually be a good thing. This is particularly true with the emphasis on the cloud, which means that organizations, and especially CIOs, no longer need to focus so much on the “keeping the lights on” infrastructure issues, but can spend more of their time focusing on innovation, he said. “Over the next five years, a significant majority of organizations will stop managing their own infrastructure, and most of these organizations will also reduce or eliminate many of their own server rooms/closets and datacenters, relying on service provider–owned and –operated facilities,” he predicts.
“The good news for IT people is that this could mean a shifting of their responsibilities toward more interesting projects,” writes Lahey. “Statistically, he said, IT budgets devote 80 percent to keeping the lights on and only 20 percent for innovation. But as more efficiencies are created, organizations can use that time and money saving toward greater innovation. Customers and lines of business, he said, are less interested in IT services providers and more interested in having IT partners whose job it is to help improve the user experience.”
Consequently, by 2020, 40 percent of the IT budget will go toward innovation, Villars predicted. This is certainly an improvement over some other predictions, which have warned that IT was increasingly being cut out of innovation projects.
This also means, however, that CIOs need to be better at collaborating with other departments, warns Chloe Green in Information Age. “Cloud computing will enable individual departments to become increasingly self-sufficient and provide them with solutions to complete their tasks better and faster,” she writes. “As a consequence, there will be a strong onus on IT management to adopt a more cooperative style to suit the cloud computing model. If IT departments aren’t willing to help business units address their business processes, they face the prospect of being sidelined.”
Collaboration and breaking down silos is nearly always a good idea, and it sounds like now it’s more important than ever.
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