Monday, September 15, 2014

How to Overcome the Cloud-Savvy IT Talent Shortage

Senior executives at large multinational enterprises are already demanding that their CIO has a plan in place to ensure that they can effectively procure public and private cloud services for their organization. In smaller companies, some IT managers are now expected to acquire the knowledge and skills to perform a similar role.

Are they prepared? To find out, let's review a current IT resource assessment.

According to the findings from a recent market study by International Data Corporation (IDC), European IT departments still need to make significant improvements before they have fully embraced cloud architectures and transformed themselves into hybrid cloud service providers.

When asked to evaluate their current readiness to execute on their cloud service brokering strategy -- where they become trusted internal advisers to their Line of Business leaders -- European respondents admitted to unexpectedly low levels of confidence that they're ready.

As an example, 56 percent of European IT departments cannot find qualified staff to effectively support cloud projects. Moreover, 61 percent are struggling to up-skill their employees to effectively evaluate cloud service providers. And, 70 percent still need to learn how to make effective use of automation, self-service, and basic orchestration tools.


Why Finding Talent is Still a Major Roadblock

If you assumed that -- based on this insight -- the skills shortfall is merely a European problem, you'd be mistaken. IDC interviewed IT and non-IT staff at director level or above in 1,109 organizations globally -- including 304 in Europe (100 in the U.K. and 102 in both France and Germany).

The IDC survey confirmed the depth and breadth of this challenge -- like many of their counterparts, the vast majority of European IT departments still require a great deal of transformation and need to invest further in people, process, and technology.

"The use of cloud computing as an increasingly business-critical technology is quickly changing how companies and institutions evaluate, procure, and deploy IT assets," said Carla Arend, program director at IDC.

She believes that the effective use of cloud-related tools remains the biggest challenge for IT organizations, while accurately defining costs and implementing charge-back models is a struggle in the business and IT relationship.

According to IDC's assessment, spending on cloud services and the building blocks for cloud infrastructure has reached 25 percent growth in Europe over the past 12 months. But beyond the early-adopter segment, IDC says that deployments in the coming years could stall if IT buyers are not prepared to systematically tackle the known hurdles to a successful adoption.

Additional findings from the IDC study include:
  • IT organizations see themselves as Service Providers focused on business priorities. Almost half of the respondents have achieved this change in mindset, where IT departments have embraced the IT-as-a-service approach and are ready to negotiate service levels and serve their business users like an outside service provider. Only 5 percent of respondents do not have this major transformation as an area of focus.
  • Return on investment remains difficult to prove. Only around a third of European organizations are able to build a comprehensive business case for their cloud projects. Understanding all the implications, costs, and benefits of a transformational process like implementing cloud computing is tough, but without creating solid business cases it is hard to demonstrate the ultimate success of cloud projects.
  • With regard to the ability to apply services to drive business innovation and competitive advantage, just 41 percent are able to use cloud to gain a business advantage -- leaving 59 percent of European organizations not able to take cloud projects beyond the level of IT infrastructure projects. IDC says that the real benefits of cloud projects will only be realized if they are used to drive business innovation and competitive advantage.

So, given that backdrop, how can companies solve the apparent cloud infrastructure and business innovation skills gap? One approach is to reach out to consulting and training organizations that have a proven track record of helping other legacy IT organizations evolve towards these 21st Century demands.

Clearly, there are likely a few highly-qualified candidates in every region of the world. In the European marketplace, Paris-based eNovance is an example of the high-caliber consulting talent that's available to create and deploy cloud infrastructures quickly and cost effectively -- plus manage a multitude of web applications on the largest public clouds.

Monday, September 1, 2014

The Evolving Role of Savvy Business Technology Leaders

As the chief executive at your company, if you discovered that you had some major financial standards compliance issues within your organization, would you be concerned about the risks associated with that exposure?

If your designated outside auditor had bypassed your internal finance department and chose instead to work directly with your individual Line of Business leaders, would you want to know why? Moreover, would you intervene?

Yes, it's a rhetorical series of questions. And I think we all know the answers.

Did you know there's a movement that's already in progress that could impact your company's provision and consumption of IT services, with a corresponding potential exposure concern that's related to compliance issues?

Have you heard about the Shadow IT phenomenon? According to the assessment of several leading IT market analysts, it's a trend that's already quite pervasive across a broad cross-section of industries. It’s also been a hotly debated topic.

Who is championing this cause from a horizontal organization perspective? According to market research from last year, it's primarily the marketing leadership.

The Need for Greater Speed and Deep Knowledge

Granted, some of the inherent friction within the ongoing quest for strategic business technology competitiveness can be uncomfortable for some people. But in the grand scheme of things, it's all good. This is the path to progress. Let's consider the upside opportunities.

IT used to be primarily about operations, cost reduction, and management controls. That's no longer the scenario at forward-thinking companies. Today, corporate IT departments are being asked to plan, build or procure, manage, and continuously improve upon their organization's business technology infrastructure and associated processes.

As if that weren't enough, you will likely also expect your re-energized IT leadership team to help your organization innovate, grow, and deliver unique customer experiences. If you haven't yet reached that pivotal point, don't fret…you will soon.


Besides, you're most likely to be highly motivated to navigate this key market transition. As an informed executive, you've made it a personal goal to insure that you surround yourself with the best available talent.

While business technology deployments can't provide you a permanent competitive advantage, the timely deployment of new IT systems can enable you to build a strong competitive position that will stand the tests of time.

Moreover, while cloud service adoption moves towards ubiquity in the global marketplace, the ability to perform the essential task of crafting a unique and powerful business application development environment is still somewhat scarce. Again, that's an opportunity, not a problem.

IT Talent with New Skills and Big Aspirations

Granted, we've already reached an inflection point where software-as-a service offerings have made it easier for any Line of Business leader to deploy an IT solution, just-in-time. However, being able to attain the much broader business agility benefits -- that are truly possible with cloud computing -- requires a comprehensive strategic plan.

Now's the time to encourage and coax your business unit leaders and open-minded IT managers to work together and collaborate on mutually beneficial projects. If you need help to bring this essential project orchestration together, then consider seeking out an accomplished pioneer.

Companies with an evolved ecosystem of integration channel partners, such as Cisco, has the depth and breadth of information, education and guidance resources that today's forward thinking leaders need to execute their multifaceted cloud-enabled strategies.

Why Cloud Service Brokering Really Matters

By increasing their inherent sourcing flexibility, your current business technology managers can more successfully assume the role as a broker of IT services -- thereby increasing transparency, and better aligning your business and IT agendas into a cohesive plan.

A valued and trusted broker, in this context, is an individual or group within your own IT team that acts as a mediator between the Line of Business end-user of a managed cloud service capability and the providers of that service offering.

But how does a top performing IT department gain the trust to carry out this evolving role?

What's needed is a comprehensive, consistent cloud strategy that will offer an enlightened perspective, provide compelling direction, and build confidence in your IT team's enabling platform procurement decisions.

As an example, when acting as a credible service broker, just imagine how your IT team can now take full advantage of multiple sourcing options and become a value-added intermediary of cloud services for their Line of Business internal customers. Now, that's the makings of a solid foundation for a meaningful partnership and substantive progress towards your bold goal.

So, are you ready to enhance your business flexibility with a choice of consumption models in the world of many clouds? Are you fully prepared to embrace the emerging hybrid cloud era?

Wednesday, August 20, 2014

Worldwide IT Spending will Reach $2.1 Trillion in 2014

So far, 2014 has turned into a banner year for CIOs that have invested the time and effort to plan for hybrid cloud services, while building strong strategic relationships with their Line of Business leadership. Their approved capital investment budget spend is on-track and operational expenses are contained, as planned.

Savvy senior executives across the globe continue to make selective investments in new business technology. In fact, there could be a moderate IT infrastructure spend over the next 12-18 months, which will likely increase the demand for open source software and professional services as new cloud service projects are approved.

Worldwide IT spending is now forecast to increase by 4.5 percent in 2014 at constant currency, that's according to updated projections from the latest market study by International Data Corporation (IDC). By and large, this enterprise growth is still being driven by smartphones, apps and the mobile cloud.

Aside from mobility related investment, the strongest IT growth will come from enterprise software, including rapidly expanding requirements -- such as cloud computing, big data analytics, data management, and collaborative applications.


IT Procurement Results and Regional Outlook

Meanwhile, although some emerging markets remain constrained, there is now significant pent-up demand for IT investment next year in higher-growth markets -- including India, Brazil, and Russia. Besides, demand has already driven a significant rebound of IT spending in China.

That being said, some IT market segments performed weaker than expected. In particular, the enterprise infrastructure refresh cycle was disrupted by declines in business confidence. However, strong underlying demand will drive improvements in the data center server, storage, and network infrastructure markets.

"The good news is that the U.S. economic outlook has already brightened and this will drive a period of moderate but long-awaited investment in mission-critical infrastructure over the next year," said Stephen Minton, vice president at IDC.

The commercial PC refresh has proven stronger than originally forecast. As a result, IDC now forecasts PC spending will increase by 3.5 percent in 2014. Western Europe has seen an improvement, but PC spending in Europe will still be down by 1 percent due to average price declines.

There was a modest market upturn in Japan, where economic growth and upcoming tax increases drove a surge in capital spending in 2013. And while IDC estimates that PC spending in Japan increased by 6 percent last year, it will decline by -4.5 percent this year.

The U.S. media tablet market is now forecast to increase by just 2 percent this year, but will rebound to 7 percent growth in 2015. Worldwide tablet spending has slowed from 29 percent year-over-year growth in 2013 to 8 percent in 2014, but will accelerate back to double-digit growth in 2015 (by ~10 percent).

Overall IT spending growth in China decelerated to 8 percent last year, but is on course for 13 percent growth in constant currency during 2014. Excluding mobile phones, IT spending in China will increase by 5 percent this year -- that's up from growth of just 2 percent in 2013.

Data center server spending in China will increase by 7 percent, storage spending by 8 percent, and software by 9 percent, but the overall market growth outlook is still weighed down by the declining PC market.

IT spending in India will increase by 15 percent next year -- that's up from 8 percent in 2014. In Brazil, the market will accelerate from 10 percent growth this year to 13 percent next year. In Russia, the market is set to decline slightly in 2014 before rebounding to 7 percent growth in 2015.

IDC believes that mature economies have remained more stable since last year, with market growth often outpacing expectations. The U.S. IT market will increase by 4 percent this year, and Western Europe will maintain a 2 percent growth rate overall.

In summary, total worldwide IT spending will reach almost $2.1 trillion in 2014. Including telecommunications services, the worldwide combined ICT market will increase by 4 percent to $3.7 trillion, with telecom services growth of 4 percent driven by mobile data services and increasing broadband penetration.

Tuesday, August 5, 2014

Business Technology Literacy in the Cloud Computing Era

What if you could deploy a new IT service shortly after you defined the requirements? And, just imagine the bliss, if your IT spend could directly translate into a competitive advantage. Predicting the ROI would be relatively easy. You would be the envy of your peer group.

Unfortunately, as most senior executives already know, it's never that simple.

Typically, you perform the technology assessment due diligence up-front, you place your bets based upon the most compelling guidance, and then you closely monitor the results. It's an iterative process, where confidence builds over time. Maybe that's why new business technology spending tends to be aligned with a past success.

But this procurement model doesn't adapt very well in response to unanticipated significant market events or the rapid acceleration of unplanned technology migrations. Moreover, tight budgets and other resource constraints can severely limit an organization's ability to react quickly to changing environments.

Outlook for Near-Term IT Transitions

Worldwide IT spending will reach $2.14 trillion in 2014, that's up by 5.1 percent from 2013 levels -- almost one point higher than the 2013 growth rate -- according to the predictions by IDC. Meanwhile, cloud spending will likely exceed $100 billion. Growing by 25 percent, IDC believes that the buyer preference will be slanted toward public cloud services.

However, the legacy approach to business technology acquisition -- that could often take months or years to reach full deployment -- just can’t seem to keep up with the most pressing needs for operational agility.

As a leader in today's fast moving commercial environment, staying current on everything that has the potential to impact the status-quo is of the highest priority. It's a well known fact in business, you can't fully capitalize on a competitive advantage if it has yet to mainstream throughout your organization and the core parts of your business operations.

That being said, is your executive team conversant with all the latest business technology trends? Are you already cloud-literate and very decisive, or cloud-challenged and somewhat ambivalent? If you don't know the answer to these key questions, then perhaps now's the time to establish a benchmark. After all, cloud literacy is no longer optional -- regardless of your industry.

How to Prosper from Cloud Computing Adoption

Eventually, the senior leadership of every size company in all industry categories will need to become literate in cloud technology adoption. Furthermore, in order to tap the full potential of the cloud services phenomenon, that awareness will need to permeate to all your department leaders. In fact, at some forward-thinking companies, it's already common for Line of Business (LOB) leaders to be actively involved in the buying-cycle. Clearly, that’s a growing trend.

A joint effort between Cisco and Intel, "The Impact of Cloud on IT Consumption Models" study surveyed 4,226 IT leaders in 18 industries across nine key economies during 2013. The global study findings uncovered important insights about how key trends are impacting IT procurement.

A case in point: 44 percent of IT funding is already coming from LOBs, either directly or as operating budget chargebacks to the IT organization. Also, 69 percent of survey respondents believe that authority over buying decisions will increasingly reside with LOB leaders.


Therefore, given the increased influence of LOBs across all IT consumption lifecycle stages -- including planning, procurement, deployment, operations and governance -- it's imperative for savvy CIOs and IT managers to rethink their internal stakeholder engagement strategy.

As an example, traditional IT leaders should anticipate a greater focus on commercial metrics, such as a meaningful ROI and substantively improved business outcomes. For some, that demand could present a skills challenge for employees. For others, there may be a need to update the key performance indicators (KPIs) that are used to gauge project progress.

Regardless of the challenges encountered in a particular scenario, survey respondents seem unanimous in their belief about how you obtain the best solution -- IT and LOB leaders must work together. Respectful collaboration, based upon mutual trust, leads to triumph.

Boldly Moving Forward with a Cloud Strategy

So, perhaps you're wondering, to achieve your top priorities, where might you go to find the best examples of purposeful organization collaboration, value creation and cloud-enabled innovation?

Value-adding companies with a multifaceted ecosystem of integration partners, such as Cisco, provide access to subject-matter experts that can help you translate the benefits of cloud technology in ways that are relevant to all your business unit managers.

And, experienced business consulting talent and technical services support staff can guide your IT team through the steps to build a best-fit plan of action for your particular use case. These services and support models allow you to properly develop a cloud strategy that is right for you. As you're probably learning, using disparate cloud services is a far cry from a developed and optimized cloud strategy that meets your IT needs and supports the business strategic objectives.

Combining all of these requisite skills will create a recipe for your own success in the cloud computing era. Besides, once you're armed with these business transformation capabilities, it's a sure way to be much better prepared to realize your desired competitive position in the marketplace.

Wednesday, July 23, 2014

Cloud Enables a Big Competitive Advantage for UK Firms

Recovery from the financial crisis in Europe continues across the whole region. Granted, there are structural reasons for the eurozone economy's slow recovery. Regardless, savvy senior executives in leading nations are actively seeks ways to grow their business. For some that means a shift to cloud computing services -- thereby lowering operational costs and boosting productivity.

As an example, forward-looking UK businesses are becoming more competitive as a direct result of their adoption of cloud services, that's according to the latest market study findings from the Cloud Industry Forum (CIF).

Quest for a Competitive Advantage

The CIF research -- conducted in May 2014, polling 250 senior IT managers and other business decision-makers -- found that 55 percent of managers report having experienced a competitive advantage from using cloud services. A further 23 percent of surveyed managers anticipate seeing a meaningful commercial advantage from their cloud service deployments.

The research also found that the migration to cloud computing has resulted in operational business objectives being achieved by many organizations -- 66 percent achieved their objective to increase speed of access to business technology, 65 percent improved up-time or reliability of IT services, and 59 percent improved service levels of their IT applications.

"It is encouraging to see that the flexibility brought by cloud services is translating into competitive advantage for businesses -- particularly for small and medium enterprises (SMEs) who are perhaps best-placed to benefit from more agile and flexible IT," said Alex Hilton, CEO at CIF.


Other findings from the market study include:

  • 47 percent of those who use cloud services, or expect to in the future, consider faster access to technology a tangible benefit, while around two fifths (41 percent) consider flexible access to technology a tangible benefit of cloud service deployment that their organization has achieved.
  • Flexibility of delivery continues to be the most commonly cited primary reason for initial cloud service adoption (17 percent). Operational cost savings come a close second (15 percent), up from a slight dip in 2013, when it was cited as the primary reason for adoption by 9 percent of cloud users.
  • This picture remains relatively consistent across organizations of all sizes, although in the public sector they show a slight preference towards cost savings, 21 percent of which cited operational cost savings as their primary reason for cloud service adoption.

Overall satisfaction rates for this business technology remain high, with 89 percent reporting satisfaction with their use of cloud services. However, 87 percent of cloud service users feel their migration could have been improved in some way, with around two fifths (38 percent) wishing it had cost less.

Many organizations did experience some difficulties in their first migration to a cloud service. Citing the need for improved professional services and technical support, 31 percent struggled with the complexity of migration, while 35 percent would have liked access to cloud management tools from their service provider.

"Although these difficulties do not seem to have impacted UK business leader enthusiasm for cloud in any significant way, improving the overall experience of cloud, from service design to service migration and management, should be an ongoing focus and priority for the industry to further enhance the benefits of cloud computing," concluded Hilton.

Wednesday, July 16, 2014

How to Win Big When Cloud Computing is Pervasive

Some people are never satisfied. These fearless agents of change are everywhere. They're informed, confident and willing to experiment. They seek out the best business technology solution for the job at hand. They act on instinct. Yes, you could say that they're driven.

However, they're also at risk of being labeled as "rogue employees" because they ordered a software-as-a-service (SaaS) offering and perhaps expensed it without prior approval. Sometimes they're the champion of progressive projects that are referred to as Shadow IT -- intentionally bypassing their company's formal evaluation and procurement process. How can this happen?

Is it just because their activities are tolerated, or are they being encouraged? If so, by whom? Why would any business leader applaud a team member that breaks the rules? Maybe, the simple answer is that staying within the confines of the status-quo won't enable a top-performer to fully apply their talent, achieving their absolute best.

On the other hand, having a defined structure does provide benefits. Clearly, standardized business technology purchase processes are often chosen to create a manageable IT environment. But those guidelines also need to be flexible, to accommodate exceptions to the rules.

Truly, this scenario creates a dichotomy; one that will likely occur at greater frequency -- from within the smallest business to the largest enterprise -- as more companies encounter rapid shifts in global markets that tend to reward the most agile and responsive competitors.


Ongoing Quest for Strategic Advantage

As a senior executive, you know that business technology will always be a key part of your own forward-looking planning process. It's assumed that information and communication technology (ICT) will continue to be the business enabler of the 21st Century.

But these platforms are often just the table stakes that enables your business to participate in the Global Networked Economy -- they're not the actual source of a sustainable strategic competitive advantage.

In 2003 Nicholas Carr wrote a provocative article for HBR entitled "IT Doesn't Matter" -- where he suggested that once a technology achieves ubiquity, then the focus must shift to differentiated applications that are very difficult for competitors to replicate. Likewise, in time, cloud will become commonplace. So, when that eventuality comes to pass, what comes next?

That's when value-adding vendor offers of guidance on how to achieve distinct business outcomes will have the edge in this rapidly evolving marketplace. When evaluating cloud companies, such as Cisco, look for a vendor that offers deep domain contextual guidance at every stage of the cloud evolution cycle, for each of the major industry verticals, and for all the key stakeholders within your diverse leadership team.

This will help you implement a cloud-first strategy that brings together your organization, cloud partners and providers, and other technology vendors to form a portfolio and strategy that is open and secure.

Moving Beyond Basic Cloud Readiness

If your organization is an early-adopter of cloud computing, then you're already ahead of the game. You probably know how cloud services can be applied to help you achieve your desired business outcomes.

But are you seeing the full depth and breadth of the upside potential opportunities? If so, then are you ready to respond -- just in time -- when your top performers are ready to act on the next wave of cloud-related capabilities?

According the latest findings from the Cisco Global Cloud Index, 2014 will be the first year when the majority of workloads shift to the cloud -- it's estimated that 51 percent of all workloads will be processed in the cloud. By 2017, it will expand to 63 percent of all workloads.

Furthermore, if you've been following the key business technology trends, then you know that the evolving cloud services debate now incorporates the advent of mobile internet applications -- many of which are inherently cloud-centric. The virtual mobile office will gain momentum in 2014.

Preparing to Navigate the Internet of Everything

When the Internet emerged just over two decades ago, at first it wasn't clear what -- if anything -- would be significantly impacted. Today, we can point to numerous examples of how it has removed traditional boundaries to market entry, leveled the playing field, or recast a legacy industry landscape. Certainly, the disrupted media and entertainment sectors will come to mind.

But what we're about to see will make that transition pale in comparison. The Internet of Everything will change all kinds of industries that may have seemed unscathed by the prior disruptions. For the adventurous among us, that means a vast array of new opportunities.

And yet, many of the same core business-related challenges will likely remain constant. New venture capital investment will still be in short supply. Top-performing employee talent might be difficult to hire and retain.

Meanwhile, cloud services will be abundant. You'll have a plethora of choices -- including public, private and hybrid cloud offerings. But so will every one of your competitors. Therefore, you'll need something extra special, something that truly differentiates you in the marketplace.

If you want to win big, then you'll need to apply the best and brightest minds -- to uncover that special ingredient. Be prepared to seek help and ask for guidance from those who have "been there, and done that" type of forward-thinking ICT project before.

Value-adding vendors have savvy business consulting and technical services staff, plus a multifaceted ecosystem of integration partners that you can depend on to meet your primary goals and satisfy the demands of your top-performers. Be wise, choose carefully. Don't settle for anything less than what you really need to succeed in the coming year.

Tuesday, July 8, 2014

How Cloud Computing Empowers the Agile Enterprise

Public cloud service adoption is already a mainstream phenomenon in most organizations. Meanwhile, many large enterprises see a private cloud in their future. But choosing whether to invest in building an internal cloud infrastructure or buy from a cloud service provider will become more challenging – in anticipation, savvy IT leaders are becoming brokers of dynamic business technology solutions.

Hybrid cloud resource management and progressive operational process adoption are the key focal points in preparation for this transition. Moreover, Line of Business demand for emerging use cases and just-in-time IT workload creation requires speedy access to a managed self-serve DevOps deployment model.

That’s why comprehensive management and provisioning tools -- such as Red Hat CloudForms -- have become essential platforms. Besides, given the pervasive trends in the marketplace, every business will eventually need an actionable hybrid cloud adoption plan. It’s a requirement of the forward-looking agile enterprise.

Public Cloud Services Still Gaining Momentum

International Data Corporation (IDC) has released the latest results from their ongoing global market study. For 2013, the worldwide public cloud services market reached $45.7 billion -- growing at a compound annual growth rate (CAGR) of 23 percent until 2018.

Three major product groups comprise the total public cloud services market in IDC's software taxonomy: Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS).

The SaaS market – accounting for 72 percent of the total public cloud services market and forecast to grow at a 20 percent CAGR over the forecast period – is dominated by Enterprise Applications cloud solutions such as enterprise resource management (ERM) and customer relationship management (CRM), followed by Collaborative applications.

System Infrastructure Software cloud solutions – the other major part of the SaaS market, including Security, Systems Management, and Storage Management cloud services – drove 21 percent of the 2013 SaaS market.

The PaaS market – accounting for 14 percent of the market in 2013 with a forecast CAGR of 27 percent – is composed of a wide variety of highly strategic cloud app development, deployment, and management services.

In 2013 and 2014, PaaS spending has been largely driven by Integration and Process Automation solutions, Data Management solutions, and Application Server Middleware services.

The Infrastructure-as-a-Service (IaaS) market – comprised of two major segments, Server and Basic Storage – drove $3.6 billion in 2013 spending and is projected to grow at a 31 percent CAGR through 2018.


On a regional basis, the United States holds almost 68 percent of the market which is much more than what it holds for traditional technologies. Western Europe holds 19 percent and the other six regions IDC tracks hold 5 percent or less each.

However, IDC forecasts that by 2018, the U.S. share will drop to 59 percent, while the Western European share will grow to 23 percent. Emerging regions are also expected to grow above worldwide average.

"We are at a pivotal time in the battle for leadership and innovation in the cloud. IDC's Public Cloud Services Tracker shows very rapid growth in customer cloud service spending across 19 product categories and within eight geographic regions," said Frank Gens, senior vice president at IDC.

Monday, June 30, 2014

Frugal and Agile DevOps - the Cloud Computing Advantage

Accomplish much more, very rapidly, while spending less -- this is the business technology trend that savvy executives everywhere have embraced. Worldwide IT spending will reach a total $3.7 trillion in 2014, that's a 2.1 percent increase from last year, according to the latest global market study by Gartner.

This forecast, however, is down from their earlier projections of 3.2 percent growth.

What's driving the ongoing transition to lower business technology spending? The slower outlook for 2014 is attributed to a reduction in growth expectations for end-user devices, data center systems and IT related services.

Moreover, the typical IT investment is evolving. It's transitioning from a legacy focus on technology and processes, to a focus on new business models and associated strategic outcomes that are purposefully enabled by digitalization.

Transition within Enterprise Mobile Devices

The IT end-user devices market -- which includes PCs, ultrabooks, smartphones, tablets and printers -- is forecast to grow in 2014, reaching $685 billion -- that's a 1.2 percent increase from 2013.

According to Gartner's assement, this trend is due in part to lower price points across smartphones and tablets. Besides, sales of high-priced tablets will decrease, with the next wave of adopters more attracted to low-priced utility tablets.

"Price pressure based on increased competition, lack of product differentiation and the increased availability of viable alternative solutions has had a dampening effect on the short term IT spending outlook," said Richard Gordon, managing vice president at Gartner.


Transition within the Enterprise Data Center

Cloud computing is already impacting traditional business technology spending patterns. Data center systems spending is projected to reach $140 billion in 2014 -- that's just a 0.4 percent increase from 2013.

The server market also shows weakness as enterprises migrate away from high-cost platforms toward lower-cost alternatives. Furthermore, the ongoing adoption of Hybrid Cloud solutions will increasingly become a factor in shifting budget allocations. It's enabling the frugal and agile DevOps movement.

The hyperscale segment, primarily driven by consumer-oriented services, does provide some positive drivers to the market -- albeit for very low-cost platforms, which further impacts overall spending levels on data center systems.

Transition within IT Services, Software and Telecom

IT services is forecast to total $967 billion in 2014, up 3.8 percent from 2013. Modestly improved spending is expected through 2014. IT outsourcing is growing slower than anticipated, as sharply reduced pricing by the largest vendors is impacting the cloud storage services market.

In addition, public cloud services are proving increasingly cannibalistic to more traditional data center outsourcing services. Implementation services are also growing slower than expected as risk-averse buyers remain focused on smaller, safer projects.

In the enterprise software market, spending is on pace to total $321 billion -- that's a 6.9 percent increase from 2013. Slightly increased growth expectations for infrastructure software are balanced out by slightly lower growth expected for applications software.

Slower growth is expected in the applications market, specifically office suites and digital content creation (DCC), which are being impacted by slow PC sales and the rapid move to cloud-based offerings by many organizations and professionals.

Telecom services spending is projected to grow 0.7 percent in 2014, with spending reaching $1,635 trillion. Voice average revenue per user (ARPU) will decline by about 10 percent annually through 2018 because of a decline in consumer use of voice services -- particularly among prepaid mobile users.

Friday, June 13, 2014

Mobile Location-Based Services will Drive Business Apps

Internet usage is evolving, and so are the application scenarios for business technology. In the foreseeable future, desktop personal computers will produce a much smaller share of commercial internet protocol (IP) traffic. Mobile and portable devices -- other than PCs -- will drive the majority of traffic by 2018.

According to the latest findings from Cisco Visual Networking Index, in 2013, just 33 percent of IP traffic originated with non-PC devices. However, by 2018, the non-PC share of IP traffic will grow to 57 percent. Moreover, commercial mobile location-based services will be the fastest growing application -- with a 24.9 percent CAGR -- during the forecast period.

PC-originated traffic will grow at a 10 percent compound annual growth rate (CAGR), while other devices or connections will have higher traffic growth rates over the forecast period -- including TVs (18 percent), tablets (74 percent), smartphones (64 percent) and M2M connections (84 percent).

According to Cisco's assessment, global IP traffic will increase nearly three-fold over the next five years due to more Internet users and devices, faster broadband speeds and more video viewing.


Key Internet Application Growth Trends

Global IP traffic for fixed and mobile connections is expected to reach an annual run rate of 1.6 zettabytes -- more than one and a half trillion gigabytes per year by 2018. The projected annual IP traffic for 2018 will be greater than all IP traffic that has been generated globally from 1984 – 2013 (1.3 zettabytes).

The composition of IP traffic will shift dramatically in the coming few years. As an example, Wi-Fi traffic will exceed wired traffic for the first time and high-definition (HD) video will generate more traffic than standard definition (SD) video.

The Internet of Everything is also gaining momentum and by 2018 there will be nearly as many machine-to-machine (M2M) connections as there are people on earth. Smart cars will have nearly four M2M modules per car.

Traffic originating in metro networks surpassed traffic traversing long-haul links in 2013. Metro traffic will grow nearly twice as fast as long-haul traffic from 2013 to 2018. This growth is due in part to content delivery networks, which will carry more than half of total Internet traffic by 2018.

Key Regional and Country Growth Projections

  • The Asia-Pacific (APAC) region will generate the most IP traffic by 2018, with 47.6 exabytes (36 percent of the global IP traffic) per month. With the world's largest population and the most devices/connections, APAC's increased network usage will maintain its position as the top traffic-generating region through 2018.
  • The Middle East and Africa (MEA) region will continue to be the fastest growing IP traffic region from 2013 – 2018 with a five-fold growth and a 38 percent CAGR.
  • By 2018, the highest traffic-generating countries will be the United States with 37 exabytes per month and China with 18 exabytes per month.
  • The countries with the fastest IP traffic growth will be India with a 39 percent CAGR from 2013 to 2018, followed by Indonesia with a 37 percent CAGR.


The Cisco VNI Global Forecast and Service Adoption for 2013 to 2018 rely upon independent analyst forecasts and real-world mobile data usage studies. Upon this foundation are layered Cisco's own estimates for global IP traffic and service adoption.

Cisco also publishes the highly regarded Global Cloud Index. That in-depth market study has produced some equally thought-provoking insights. It's forecast that as more workloads transition to Open Hybrid Clouds, rapidly increasing cloud-related traffic will dominate data centers around the globe.

Monday, June 2, 2014

Open-Source Cloud: Explore the Commercial Applications

During the course of the last twelve months the OpenStack community has advanced as more users of the leading open-source cloud technology have been reporting their progress -- with the help of their partners -- towards making a meaningful impact on their business goals and objectives.
We've also learned how these progressive technology users are pioneering changes in their own organizations -- enabling them to become more competitive in the Global Networked Economy.
The OpenStack Summit 2014 opened with a keynote on the first day of the conference featuring lessons learned from industry leading organizations that have already deployed these open cloud technologies. Each case study had multiple instances of OpenStack that have been applied for a variety of commercial application scenarios.
Jonathan Bryce, the Executive Director of the Foundation, introduced the growing community of OpenStack Superusers. Glenn Ferguson, Head of Private of Cloud Enablement at Wells Fargo Bank and Chris Launey, Director of Cloud Services & Architecture at the Walt Disney Company described their IT environment and how they’ve adopted OpenStack as a solution to their company’s varied cloud infrastructure requirements.
Addressing the needs of enterprise workloads is only part of the evolving adoption story told at this year’s Summit. Several broadband service providers are also early-adopters of OpenStack.
How Network Operators Apply OpenStack Platforms
During a lunch session on the same day, Fernando “Fred” Oliveira, cloud architect at Verizon, described his experience building OpenStack clouds with Red Hat enterprise-grade software.
He explained how the company’s network is growing faster than they can monetize the infrastructure, and so they’re looking at open-source technology as a way to proactively control costs – but their motivation goes beyond bottom-line savings.
Verizon will use OpenStack as a key enabler of its go-to-market business strategy – essentially compressing the time it typically takes them to reach significant new service revenue attainment.
Moreover, Verizon looked to this rapidly evolving software technology as a way to become more agile – from the initial service launch to the ongoing operational requirements. They have been a pioneer of Network Functions Virtualization (NFV), and OpenStack became a natural choice to use within their numerous proof-of-concept tests and ongoing pilot projects over the last year.
Throughout this progressive exploratory experience, Oliveira mentioned how Verizon has relied upon Red Hat Consulting professional services to augment their own internal expertise with OpenStack platform adoption.
Seeking the Full Potential of NFV Applications
On the second day of the OpenStack Summit Toby Ford, Assistant VP, IT Operations Strategic Realization at AT&T, described his personal experience with cloud offerings -- both internally and externally focused. He started his talk by disclosing that when he first arrived at AT&T (as part of an acquisition) “open-source was pretty much forbidden.” Today, it’s an integral part of their IT strategy.
The commitment to explore NFV is an example of their evolving strategy in action – and the company’s contribution to the OpenStack community. In fact, Ford said that the adoption of OpenStack has become a somewhat unique proxy to introduce more innovation into their DevOps process. Moreover, he sees a tremendous value in the ecosystem that has formed around this open-source cloud technology.
AT&T first introduced OpenStack in their lab environment during 2010. Moving quickly, they had already progressed to production workloads by the end of 2011. Today, they have approximately 120 applications deployed on OpenStack. The platform has been deployed in seven data centers. At the end of 2014, it’s anticipated that three more data centers will join those in production.
The virtualization use cases have expanded from the more typical back-end applications to now include new things – such as Big Data usage scenarios. Over the next two years, AT&T plans to expand their deployment from 10 to 20 data center sites. Why so many locations? Ford says it’s all being driven by the promise of NFV – particularly within the mobility systems arena.
Change Agent: Why Open-Source is Now Pervasive
Keeping in mind that AT&T is experiencing aggressive new competition from outside of their traditional realm, Ford acknowledged that the company’s executive leadership knows that they must change – and OpenStack is seen as a catalyst to rapidly advance a flexible and agile DevOps environment.
As an example of key areas of innovation, Ford pointed to the opportunities to transform how video entertainment content is stored and eventually delivered to AT&T U-verse customers. By going beyond prior constraints of the legacy vertically integrated infrastructure model, AT&T will be able to re-engineer their network architecture. This will allow them to distribute both key functions and multimedia content – thereby placing them much closer to the ultimate user.
Ford believes that the inherent capabilities of Cinder and Neutron will enable AT&T to have a more productive relationship with infrastructure vendors – leveraging the peer pressure within the ecosystem that naturally drives all vendors to produce high-quality code that works and scales as intended.
In addition to direct benefits, OpenStack adoption is also helping Ford and his team to propagate agile methods throughout AT&T’s vast IT organization. Besides, there has been a trickle-down effect from the early results. Now, AT&T has looked more closely at Software Defined Networking (SDN), and Ford says that he’s really excited by the opportunity to advance substantive change in the core network.
Ford believes that it’s the federation – the binding cohesion – that will ultimately make OpenStack succeed. Granted, there are recognized challenges in a number of key areas, but Ford is confident that the current path for OpenStack is both sound and stable. He anticipates more forward-thinking service providers, globally, will follow the lead of the early adopters. The positive impact is truly remarkable.