Digital Transformation | Open Innovation

Tuesday, December 31, 2019

Hybrid IT Nirvana: Digital Growth + Digital Trust

In many organizations today, Information Technology (IT) is more than a utility, it has become an essential platform for their ongoing business development. Therefore, they crave a superior IT experience for their employees and other key stakeholders. For most, cloud computing is a fundamental ingredient of the digital transformation agenda.

The common commercial use cases for public cloud services have already been exploited by many organizations. Front-office applications -- such as customer relationship management, online commerce, and numerous consumer-facing apps -- constitute the bulk of the workloads that reside on cloud service provider shared infrastructure.

These initial use cases have validated the proven benefits of cloud computing architectures that are appealing to software developers -- including speed of deployment, dynamic resource acquisition, application elasticity, and service reuse across workloads.

Leveraging the inherent benefits of cloud service offerings, organizations are now focused on the potential of utilizing IT infrastructure for innovation, process improvement, streamlined operations, entering new markets, and the creation of a preemptive response to potential disruption by new tech start-ups.

According to the latest worldwide market study by the IBM Institute for Business Value (IBV), organizations report success with public cloud initiatives, especially those forward-looking business transformation projects related to Digital Growth.


Meanwhile, mission-critical, security-dependent applications -- such as customer databases, transaction processing, finance and accounting, supply chain, and manufacturing -- are somewhat less likely to reside on a public cloud service provider’s platform.

This is particularly true for highly regulated industries, such as financial services and healthcare, where the greatest proportion of their online business processes have yet to move to a cloud service delivery model.

In many cases, these computing and storage workloads are better suited to the private cloud -- or a mixture of public, private, and non-cloud traditional IT infrastructure.

In order for the next phase of cloud computing benefits to be realized, an open and adaptable approach to IT infrastructure architecture is required to address the multitude of use cases.

The Evolution of Cloud Services Adoption

The Hybrid IT model permits public clouds, private clouds, and on-premises non-cloud IT infrastructure to connect across all three standardized technology interfaces: Linux OS, Open Container Initiative, and Kubernetes. These technologies enable developers to innovate with scale and agility, improving responsiveness and constraining cost, despite growing complexity.

Hybrid IT enables workloads to be deployed on the optimal compute and storage environment.

  • Public clouds are well suited for many front-office workloads.
  • Private clouds are well suited for many of the mission-critical workloads where the benefits of cloud are desirable -- but the security and assurance of a private environment are preferred.
  • And traditional IT environments are suited for workloads that don’t inherently take advantage of cloud benefits -- and demand the dedication of computing resources.

According to the IBM IBV assessment, as hybrid cloud solutions become widespread, there will be more variations of cloud service adoption across all industries. However, in the more regulated industries, the cloud service mix will tilt toward private cloud adoption, rather than public cloud. In the less regulated industries, the cloud service mix will likely tilt the other way.

In all cases, there’s a universal need to interoperate between public, private and traditional IT.

Hybrid cloud’s intrinsic interoperability and portability can mean that organizations are less likely to become locked-in to a proprietary environment or to one particular public cloud service provider.

Savvy CIOs and CTOs will choose to place their workloads on the best-fit platform and maintain interoperability between IT environments and between different public cloud service providers.

Why Freedom to Choose Matters

Hybrid cloud can also help to address security concerns and other potential barriers to an otherwise successful cloud service deployment. The IBM IBV research study findings indicate that IT security and governance are the two top reasons cited as justification to keep enterprise workloads on-premises.

Armed with hybrid cloud solutions, organizations can run applications and store data in the specific IT environments best aligned with security, regulatory, and governance requirements.

Hybrid cloud also allows enterprises to manage their cloud transition dynamically, selecting acceptable levels of downtime and overcoming the possibility of operational constraints.

The next chapter in the evolving cloud computing story is about gaining access to enhanced capabilities -- in particular, the cloud-enablement of complex mission-critical software apps.

The IBM IBV outlined key steps toward the hybrid cloud model:

Architect the destination: Think open, multi-cloud, hybrid cloud. Your organization will live with the decisions you make today for years. Think through which of your workloads fit best in the public cloud, private cloud, and traditional IT environments. Avoid both environment lock-in (to only one of the three) and vendor lock-in, and reassess approaches that might not survive as standards and technologies evolve.

Sequence the journey: Avoid “ready, fire, aim” approaches. Layout a careful, clear roadmap of what you want to do and in what order. You may experience pressure to skip ahead without building a solid, open foundation. Resist it.

Mobilize the right skills and assets: Draw upon talent within and outside your enterprise. It’s important to develop and maintain in-house skills, but working with trusted third-party services providers, enabled by greater interoperability, can help bridge short-term gaps while reducing fixed costs.

Manage to clear outcomes: Establish meaningful qualitative and quantitative measurements and be tenacious in holding to them. Remain flexible and incorporate new technologies as they emerge. Always stay true to your business, architectural, and technical principles.

The Hybrid IT strategy questions to ask include:

  • To what extent do your people understand the implications and opportunities of next-generation cloud on your business and your competitive environment?
  • How is your organization, and your competition, taking advantage of hybrid cloud, particularly data and processes that, until recently, have been difficult to move?
  • What adjustments have you made in hiring and training to have the right people at the right time working on the right things in dynamic ecosystems powered by hybrid cloud?

The Quest for Hybrid IT Nirvana

In summary, organizations will continue to seek the essential benefits of a hybrid model because it offers them the freedom of choice that forward-thinking CIOs and CTOs require. Put simply, they’ll need the flexibility and agility of a Hybrid IT environment to achieve their bold goals for digital transformation.

From the C-suite perspective, this quest isn’t about technology. Rather, it’s about applied IT enabling strategic business outcomes. The goal: deliver a unified experience across platforms that abstracts the underlying IT infrastructure. The ‘everything-as-a-service’ platform accelerates the achievement of commercial objectives. It also reduces the risk of cyber threats by assuring Digital Trust.

Monday, January 7, 2019

How CEOs Apply Digital Reinvention to Fuel Growth

Now more than ever, CEOs and their leadership teams must counter the threat of digital disruption. Within the evolving global economy, debate and analysis about business technology adoption must result in purposeful action. Even the trailing organizations are prepared to learn something actionable from their trailblazer peers.

The following statistics and insights are excerpts from the IBM Institute for Business Value (IBV) Global C-suite Study (19th edition). IBM’s latest worldwide study draws on input from 12,854 respondents across 6 C-suite roles, from 112 countries.

The C-suite is evenly divided on whether the focus in the future will shift from established markets to new ones. In two areas, however, C-suite executives stand in close agreement: how they will change their value propositions and scale their value chains.

Sixty-eight percent of C-suite executives expect organizations to emphasize customer experience over products. Sixty-three percent believe that most organizations will continue to expand their network of business partners.

Digital Reinvention Segmentation

IBM IBV applied cluster analysis to identify distinct segments of organizations among the study participants. Three archetypes emerged: the Reinventors, the Practitioners and the Aspirationals. The organizations clustered within these archetypes are at different stages of their Digital Reinvention.

The Reinventors (27 percent of the total) are the market leaders. They outperformed their peers in both revenue growth and profitability over the past three years, and also led with innovation. Their organizations are exceptionally well aligned. Their IT strategy is in sync with their business strategy and they’ve optimized their business processes to support their strategic initiatives.

Practitioners (37 percent of the total) haven’t yet developed the capabilities to match their ambitions. But they say they’re ambitious. Over half of the Practitioners plan to launch new business models within the next few years.

The Aspirationals (36 percent of the total) have a long way to go in both their digital journey and their ability to move quickly to seize new opportunities. They’re the most exposed to disruption.



Incumbent Companies Strike Back

That being said, thirty-six percent of C-suite executives report little or no impact from disruption in their industries. Forty-four percent say they don’t see any urgency to transform their enterprises in response to disruption. In all, just 27 percent say they’re experiencing significant disruption.

According to the IBM IBV study findings, the surge of competition from other industries didn’t happen at the anticipated scale. Only 23 percent of C-suite executives say that competitors from outside their industry are a significant source of disruption.

Seventy-two percent of C-suite executives say that innovative incumbents lead the disruption in their industry. Even in industries with higher than average turmoil, such as financial services, where startups have a relatively larger presence, innovative incumbents drive the most change.

Recommended Action Plan

Reinvention never ends. As new opportunities emerge, the organizations that remain open to change can orchestrate advantage. These evolutionary changes include new trusted bonds with customers, new ventures to scale on platforms, and more nimble teams.

To uncover your organization’s competitive advantage, consider these actions:

Interrogate your environment

  • Remain on high alert and avoid complacency about past successes. Actively scan the business landscape for disruptive change coming from industry incumbents, including those in adjacent industries. Be vigilant about new entrants attracting VC funding that might foreshadow threats.
  • Design and play a new offense. Boldly evaluate, experiment and engage with new business models, industry-shaping platforms and ecosystem strategies that you could adopt to significant advantage.
  • Get ever closer. Create opportunities for frequent and intense interactions with customers, partners and competitors. Test existing assumptions and drive totally new strategies.

Commit with frequency

  • Divest to invest. Act quickly against the possibility of disruption by adopting a fluid capital reallocation mindset. Frequent capital reallocation from low to high potential opportunities should be an agile exercise.
  • Invest for new growth. Create market-shaping and capability building investments that inject innovation, new talent and technologies into your enterprise. Acquire these if necessary; grow them organically if your enterprise is agile enough.
  • Prioritize advocacy and co-creation over advertising. Maximize investments that build customer trust and brand value. On digital platforms -- which are inherently transparent -- community-generated feedback, if heeded well, can boost brand value in unimaginable ways.

Experiment deliberately

  • Seek innovation over institutionalization. Don’t solidify a competitive advantage; it’s likely fleeting. Expect it to be transitory and start working on the next audacious opportunity.
  • Write new rules. To create a more open and collaborative culture, look for ways to challenge traditional norms. Put a body into orbit around new systems and try it out.
  • Find energy in motion. Create new motion through continuous innovation but don’t dismiss the potential to benefit from others’ ideas. Find opportunities to co-create with customers, partners and even competitors.

Thursday, December 27, 2018

The Open Innovation Network for Globalization 4.0

The World Economic Forum annual meeting is a high-profile gathering that brings together leaders of global society. The heads and members of more than 100 governments, top executives of the 1,000 foremost global companies, and numerous others collaborate at the beginning of each year to define priorities and shape agendas.

The theme for Davos-Klosters 2019 is "Globalization 4.0: Shaping a New Architecture in the Age of the Fourth Industrial Revolution." A key component of the international debate will be about how the transformation is introducing technologies at a speed and scale unparalleled in history.

Meanwhile, digital business innovation is enabled by access to essential telecom infrastructure. The internet combines thousands of public and private networks from around the world, which together are the key foundation for the Global Networked Economy. And since its inception in 1984, more than 4.7 zettabytes of internet protocol (IP) data traffic have already flowed across it.

Enabling the Global Networked Economy

According to the Visual Networking Index (VNI) by Cisco, exponential growth will continue. As an example, by 2022, more IP data traffic will cross global networks than in all prior ‘internet years’ combined up to the end of 2016. Meaning, more IP data traffic will be created in 2022 than in the 32 years since the public internet began.

Where will that data traffic come from? All of us, our electronic devices and the way we use the internet. By 2022, 60 percent of the global population will be internet users. More than 28 billion devices and connections will be online. And, video content will make up 82 percent of all IP data traffic.

"The size and complexity of the internet continues to grow in ways that many could not have imagined. Since we first started the VNI Forecast in 2005, traffic has increased 56-fold, amassing a 36 percent CAGR with more people, devices and applications accessing IP networks," said Jonathan Davidson, senior vice president at Cisco Systems.

According to the latest Cisco assessment, global service providers are focused on transforming their networks to better manage and route online data traffic, while delivering premium experiences.


VNI Key Predictions for 2022

Cisco’s VNI looks at the impact that users, devices and other trends will have on global IP networks over a five-year period. From 2017 to 2022, Cisco predicts:

  • Global IP traffic is expected to reach 396 exabytes per month by 2022, up from 122 exabytes per month in 2017. That’s 4.8 zettabytes of traffic per year by 2022.
  • By 2022, the busiest hour of internet traffic will be six times more active than the average. Busy hour internet traffic will grow by nearly five times (37 percent CAGR) from 2017 to 2022, reaching 7.2 petabytes per second by 2022. In comparison, average internet traffic will grow by nearly four times (30 percent CAGR) over the same period to reach 1 petabyte by 2022.
  • There will be 4.8 billion internet users by 2022. That’s up from 3.4 billion in 2017 or 45 percent of the world’s population.
  • By 2022, there will be 28.5 billion fixed and mobile personal devices and connections, up from 18 billion in 2017—or 3.6 networked devices/connections per person, from 2.4 per person.
  • More than half of all devices and connections will be machine-to-machine by 2022, up from 34 percent in 2017. That’s 14.6 billion connections from smart speakers, fixtures, devices and everything else, up from 6.1 billion.
  • Average global fixed broadband speeds will nearly double from 39.0 Mbps to 75.4 Mbps.
  • Average global Wi-Fi connection speeds will more than double from 24.4 Mbps to 54.0 Mbps.
  • Average global mobile connection speeds will more than triple from 8.7 Mbps to 28.5 Mbps.
  • IP video traffic will quadruple by 2022. As a result, it will make up an even larger percentage of total IP traffic than before—up to 82 percent from 75 percent.
  • Gaming traffic is expected to grow nine-fold from 2017 to 2022. It will represent four percent of overall IP traffic in 2022.
  • Virtual and augmented reality traffic will skyrocket as more consumers and businesses use the technologies. By 2022, virtual and augmented reality traffic will reach 4.02 exabytes/month, up from 0.33 exabytes/month in 2017.

Regional IP Data Traffic Growth (2017 – 2022)

  • APAC: 173 exabytes/month by 2022, 32 percent CAGR, four-times growth
  • North America: 108 exabytes/month by 2022, 21 percent CAGR, three-times growth
  • Western Europe: 50 exabytes/month 2022, 22 percent CAGR, three-times growth
  • Central & Eastern Europe: 25 exabytes/month by 2022, 26 percent CAGR, three-times growth
  • Middle East and Africa: 21 exabytes/month by 2022, 41 percent CAGR, six-times growth
  • Latin America: 19 exabytes/month by 2022, 21 percent CAGR, three-times growth

The Cisco Complete VNI Forecast includes global, regional, and country-level projections and trends associated with fixed and mobile networks. The full report includes additional information and analysis on IoT by industry vertical, IPv6 adoption, traffic growth by application, traffic patterns, cord cutting implications, Wi-Fi hotspots, broadband network performance and network security issues.

Monday, February 12, 2018

Hybrid IT Demand Fuels Multi-Cloud Computing Trend

Guided by senior executive goals for digital transformation, more organizations are increasing their use of cloud computing technologies. The typical multi-cloud mix includes a blend of public cloud, private cloud and traditional IT services. Finding the best-fit service mix starts with the business requirements.

The latest Global Cloud Index (GCI) 2016-2021 from Cisco focuses on the worldwide market outlook for enterprise data center virtualization and cloud computing services. Today's digital business is enabled by Hybrid IT infrastructure that supports the deployment of cloud-based solutions.

Driven by the surging enthusiasm for digital reinvention projects, data center traffic is growing fast. The market study authors forecast global cloud data center traffic will reach 19.5 zettabytes (ZB) per year by 2021 -- that's up from 6.0 ZB per year in 2016. Globally, cloud data center traffic will represent 95 percent of total data center traffic by 2021, compared to 88 percent in 2016.

Additionally, according to the Cisco assessment, the growth of Internet of Things (IoT) applications requires scalable server and storage solutions to accommodate new and expanding data center demands. By 2021, Cisco expects IoT connections to reach 13.7 billion -- that's up from 5.8 billion in 2016.


Hyperscale Cloud Data Center Growth

By 2021 there will be 628 hyperscale data centers globally, compared to 338 in 2016 -- that's 1.9-fold growth or near doubling over the forecast period. By 2021, hyperscale data centers will support:
  • 53 percent of all data center servers (27 percent in 2016)
  • 69 percent of all data center processing power (41 percent in 2016)
  • 65 percent of all data stored in data centers (51 percent in 2016)
  • 55 percent of all data center traffic (39 percent in 2016)

Data Center Virtualization and Cloud Growth

By 2021, 94 percent of workloads and compute instances will be processed by cloud data centers. In contrast, 6 percent will be processed by traditional IT data centers.

Overall data center workloads and compute instances will more than double (2.3-fold) from 2016 to 2021; however, cloud workloads and compute instances will nearly triple (2.7-fold) over the same period.

The workload and compute instance density for cloud data centers was 8.8 in 2016 and will grow to 13.2 by 2021. Comparatively, for traditional data centers, workload and compute instance density was 2.4 in 2016 and will grow to 3.8 by 2021.

Stored Data Growth Fueled by Big Data and IoT

Globally, the data stored in data centers will nearly quintuple by 2021 to reach 1.3 ZB by 2021, up 4.6-fold (a CAGR of 36 percent) from 286 EB in 2016.

Big data will reach 403 exabytes (EB) by 2021, up almost 8-fold from 25 EB in 2016. Big data will represent 30 percent of data stored in data centers by 2021, up from 18 percent in 2016.

The amount of data stored on devices will be 4.5 times higher than data stored in data centers, at 5.9 ZB by 2021.

Driven largely by IoT, the total amount of data created (and not necessarily stored) by any device will reach 847 ZB per year by 2021, up from 218 ZB per year in 2016. Data created is two orders of magnitude higher than data stored.

Apps Contribute to Rise of Global Data Center Traffic

By 2021, big data will account for 20 percent (2.5 ZB annual, 209 EB monthly) of traffic within data centers, compared to 12 percent (593 EB annual, 49 EB monthly) in 2016.

By 2021, video streaming will account for 10 percent of traffic within data centers, compared to 9 percent in 2016.

By 2021, video will account for 85 percent of traffic from data centers to end users, compared to 78 percent in 2016.

By 2021, search will account for 20 percent of traffic within data centers by 2021, compared to 28 percent in 2016.

By 2021, social networking will account for 22 percent of traffic within data centers, compared to 20 percent in 2016

SaaS is Still the Most Popular Cloud Service Model

By 2021, 75 percent (402 million) of the total cloud workloads and compute instances will be SaaS workloads and compute instances, up from 71 percent (141 million) in 2016. (23 percent CAGR from 2016 to 2021).

By 2021, 16 percent (85 million) of the total cloud workloads and compute instances will be IaaS workloads and compute instances, down from 21 percent (42 million) in 2016. (15 percent CAGR from 2016 to 2021).

By 2021, 9 percent (46 million) of the total cloud workloads and compute instances will be PaaS workloads and compute instances, up from 8 percent (16 million) in 2016. (23 percent CAGR from 2016 to 2021).

Monday, November 27, 2017

CTO Proven Formula for Radical Business Reinvention

Digital technologies have altered how people and businesses interact. The potential for dislocation from ongoing digital transformation has created unprecedented levels of C-suite discussion. The decisive market leaders have heeded the warnings and taken bold actions.

That said, if you’re one of those Chief Technology Officers (CTO) that previously responded to this scenario by making small incremental adjustments to your IT agenda, then you’re potentially at risk. Any relief from those prior tweaks tend to be short lived. The same issues will likely resurface.

An Introduction to Digital Reinvention

Back in 2013, the IBM Institute for Business Value (IBV) introduced the concept of ‘Digital Reinvention’. Why is that concept noteworthy? Markets had evolved from organizational centricity, in which manufacturers and service providers defined a predictable state, into a radically different environment described as the everyone-to-everyone (E2E) economy.

The E2E economy has four distinct characteristics, which are now more important since the original IBM study was published. E2E is orchestrated, and based on open ecosystems which are collaborative and inclusive. Orchestration reflects coordination, arrangement and management of complex commercial environments.

E2E is symbiotic, where everyone and everything are mutually interdependent. Meaning, collaborative partners engage in co-design, co-creation, co-production, co-marketing, co-distribution and sometimes co-funding. Moreover, the E2E economy is cognitive, characterized by data-enabled learning and predictive capabilities.

Customer Experience-Based Innovation

Emerging technologies are expanding customer influence. A new generation of tech savvy customers demand more sophisticated and tailored experiences. According to a recent global survey of executives focusing on emerging business ecosystems, 54 percent believe customer buying behavior is shifting from a products- and/or services-based to an experience-based approach.

Seventy-one percent of global CEOs are now intent on treating customers as individuals rather than market segments -- that’s a 29 percent growth in only two years. And, 81 percent of global CEOs say they want to apply technology to develop stronger customer relationships.

What’s changed? Digital Reinvention rethinks customer and partner relationships from a need-, use- or aspiration-first perspective. Digital Reinvention helps organizations create unique, compelling experiences for their customers, partners, employees and other stakeholders.

These benefits arise even if fulfillment of the experience involves direct provision of products and services, or orchestration of products or services from partner organizations by way of a business ecosystem. The most successful digitally reinvented businesses establish a platform of engagement for their customers -- acting as enabler, conduit and partner.


Pathway to Digital Reinvention

According to the IBM IBV assessment, to succeed in this disruptive environment, organizations must offer compelling new experiences, establish new focus, build new expertise, devise new ways of working and embrace the digital drivers.

Pursue a new focus -- Leading businesses will develop new ways of realizing and monetizing value and spawn new business models, new forms of financing and better, more holistic ways of conducting risk assessments. Leaders will also engage the market in deeper, more compelling ways. They will create strategies and execution plans to deliver deep, contextual, compelling experiences, and find new ways to monetize customer Interactions.

Build new expertise -- Leading businesses will digitize products, services and processes that help them redefine the customer experience. They will augment these steps by applying predictive analytics, cognitive computing, the Internet of Things and automation to create a fully integrated, flexible and agile operational environment necessary to support and enable deep experiences.

Establish new ways of working -- Leading businesses identify, retain and build the right talent needed to create and sustain a digital organization. The most successful among these take measures to create and perpetuate an innovation-infused culture incorporating design thinking, agile working and fearless experimentation.

Leaders contextualize organizational priorities within business ecosystems, seeking new forms of partnering and new ways to build value within overall systems of engagement. They think deeply and strategically about how customer priorities might evolve, seeking opportunities to create engagement platforms to the benefit of their customers, their partners and themselves.

Embrace digital drivers -- Leading businesses combine open innovations to create organizations that can build the deep, compelling experiences customers desire. Rather than incrementalism, Digital Reinvention provides a path for visionary organizations to adopt an experience-first approach to planning, employing the strengths of ecosystem partners to create experiences that are truly unique.

Study Conclusion: Reinventing the Future

Digital technologies have redefined how people live, work and play. Pervasive technology is already changing traditional industry structures and economics and is reinterpreting what it means to be a customer and a citizen within the Global Networked Economy.

To thrive in a rapidly changing business environment, the most successful organizations will offer compelling new experiences, establish new focus, build new expertise and devise new ways of working -- all based upon a foundation of the latest digital drivers.

The fearless market leaders advance this process by embracing Digital Reinvention. They envision possibilities, create pilots, deepen capabilities and orchestrate new ecosystems.

Monday, September 4, 2017

Digital Transformation Leaders Adopt Open Ecosystems

Are you open to new ideas, and given a compelling choice are you really prepared to change? That’s what informed CEOs are asking their C-suite leadership team. The context of those questions is about determining who is most qualified to guide the organization’s digital transformation journey. It’s also about setting expectations for C-level executives to partner.

IT and business leaders must acknowledge that they’ve likely reached a significant turning point. Business technology advances are disrupting the legacy status quo and bringing huge market turmoil in their wake. Industries are converging, and unfamiliar competitors are surfacing.

Granted, that convergence is creating opportunities for growth by shifting from products and services made by solo entities, to new cross-sector customer experiences built via strategic partnerships. But it’s also intensifying market competition. One company’s convergence can become another’s encroachment. So, how do you navigate through this labyrinth?

Open Collaboration in the Connected Economy

Welcome to the ‘connected economy’ (CE) -- a new business reality in which value is created through technology-enabled links among people, open digital systems and business partner networks. Across industries, huge opportunities are available for savvy organizations to become connected economy leaders.

Implementing connected business models and associated processes can help you significantly increase revenue growth and enhance your competitive edge. At the same time, a very real downside to falling behind exists: laggards risk becoming prey to disruptive innovations.

It’s a scenario in which a competitor with a completely different business model can put your traditional revenue stream at risk -- or worse, put you out of business. So, with that backdrop, how do you survive and prosper? What does it take to be a leader in the connected economy?

IBM asked Harvard Business Review (HBR) Analytic Services to uncover the drivers for business change, assess the preparedness of organizations, and identify the types of adjustments we must make to capitalize on emerging opportunities. Here’s what they found.

A Profile of the Global CE Leaders

Whatever their industry, the global CE leaders see their world rapidly changing, and they’re determined to be at the forefront of that change in order to remain relevant and claim their competitive advantage.

Their success is increasingly dependent on participation in broader business ecosystems. That being said, even the CE followers and laggards recognize the growing importance of tighter connections with other organizations in adjacent industries.

However, CE leaders are radically better positioned within their own business ecosystems -- something that could lead to a long-term advantage. The rest are under pressure to catch up. Fifty-two percent say that a substantial part of their revenue is already under threat from digital disruption.

To counter that threat, savvy organizations are changing how they operate. Moreover, the progressive CE leaders are already reaping the rewards of their new connected business models.

They’ve seen significantly stronger revenue growth over the past two years than their less-connected rivals -- in large part due to their ability to exploit information at speed through their use of hardware, software, and networking technologies.


How CE Leaders Leverage IT Infrastructure

What really sets CE leaders apart is the degree to which they recognize the threat from digital disruption and the value of their IT leadership in bringing them into the connected economy. That awareness is causing them to make digital initiatives a C-level priority.

CE leaders have built relationships between CIOs or CTOs and line of business (LoB) leaders, based on collaborative engagement. They invest more in digital technology, skills, and projects. They’ve created digital transition teams, while emphasizing that digital is part of everyone’s job.

That being said, only 18 percent of survey respondents say that their organization have applied progressive CE business models or open innovation to a significant extent. A key to success is the ability to exploit information at speed through the use of open hardware, software, and networking technologies.

As a result, 48 percent of CE leaders have seen double-digit revenue growth. And three times as many CE leaders claim growth of 30 percent or more, when compared to the laggards.

Common Traits of Proven CE Market Leaders

CE leaders are much more likely than other companies to:

  • Have C-level executives involved in leading digital initiatives.
  • Dedicate teams to help with various aspects of the transformation.
  • Break down organizational silos through restructuring and fostering cross-functional collaboration.
  • Invest in a data-centric IT infrastructure needed to build their digital platform.
  • Recognize the need for new, more advanced skills, and ensure their teams are acquiring or developing them.
  • Have a “business innovator” CIO or CTO.

HBR believes C-level involvement is crucial, given the profound changes that must take place to transition to a connected-economy business model. In fact, all senior executives at CE leader organizations take an active role in their digital business initiatives.

Why Open Innovation Ecosystems Matter

As internal resistance to change is overcome, the connected economy will become even more connected, with success relying on participation in a broader business ecosystem, defined as an interdependent network of collaborative individuals and organizations.

More than half of all survey respondents (and three-quarters of CE leaders) said their organization’s success is tied to relationships with organizations in adjacent industries. And, 80 percent of CE leaders are more likely to be favorably positioned within their partner ecosystem.

In conclusion, these strategic shifts don’t just happen; they’re led by change agents. CE leaders have made this transition to open innovation a C-level priority. They’re significantly more likely to benefit from business-innovator or transformational CIOs and CTOs who drive cross-functional integration and collaboration between IT and other parts of the business.

Not only are they breaking down silos inside their own organizations, they’re connecting to new business partners that apply open technologies in creative ways, as part of a broader digital business transformation model. This is the new normal; leaders adopt open ecosystems.

Monday, June 12, 2017

Digital Transformation is Fueled by Disruptive Innovations

What's disruptive innovation, and why does it matter to leaders in the C-suite? It's how the savvy non-conformist will target market opportunities. How does this happen, when established companies seem to have the advantage? Creative software developers can quickly apply new technologies and digital business models to capture untapped demand.

Moreover, the most disruptive new companies will eventually reshape entire industries, swiftly pushing aside the legacy incumbent players -- it's a form of Digital Darwinism. The global networked economy will blossom, thanks to the pervasive Internet, while the adaptive entities will survive and prosper.

Over the next five years, global digital transformation will continue to have a significant impact on the demands and requirements of Internet Protocol (IP) networks, according to key findings from the latest Cisco Visual Networking Index (VNI).

Over the forecast period, global IP traffic is expected to increase three-fold reaching an annual run rate of 3.3 zettabytes by 2021 -- that's up from an annual run rate of 1.2 zettabytes in 2016.


Apps for Next-Generation Internet of Things

According to the Cisco assessment, machine-to-machine (M2M) connections that support Internet of Things (IoT) applications are calculated to be more than half of the total 27.1 billion devices and connections. They will account for five percent of global IP traffic by 2021.

IoT innovations in connected home, connected healthcare, smart cars or transportation and a host of other next-generation M2M services are driving this incremental growth -- a 2.4-fold increase from 5.8 billion in 2016 to 13.7 billion by 2021.

With the rise of connected applications, the healthcare vertical will be the fastest growing industry segment (30 percent CAGR). The connected car and connected cities applications will have the second-fastest growth (29 percent CAGRs respectively).

Video Content Will Flood the Public Internet

That said, video will continue to dominate IP traffic and overall Internet traffic growth -- representing 80 percent of all Internet traffic by 2021, that's up from 67 percent in 2016. Globally, there will be nearly 1.9 billion Internet video users (excluding mobile-only) by 2021, that's up from 1.4 billion in 2016.

The world will reach three trillion Internet video minutes per month by 2021. Emerging mediums, such as live Internet video, will increase 15-fold and reach 13 percent of Internet video traffic by 2021.

"As global digital transformation continues to impact billions of consumers and businesses, the network and security will be essential to support the future of the Internet," said Yvette Kanouff, SVP and GM of Service Provider Business at Cisco.

Global IP traffic is expected to reach 278 exabytes per month by 2021, that's up from 96 exabytes per month in 2016. Global IP traffic is expected to reach an annual run rate of 3.3 zettabytes by 2021.

Busy hour Internet traffic is increasing faster than average Internet traffic. Busy hour Internet traffic will grow 4.6-fold (35 percent CAGR) from 2016 to 2021, reaching 4.3 Pbps by 2021, compared to average Internet traffic that will grow 3.2-fold (26 percent CAGR) over the same period reaching 717 Tbps by 2021.

Regional IP Traffic Growth by 2021

  • Asia-Pacific: 107.7 exabytes/month, 26 percent CAGR, 3.2-fold growth
  • North America: 85 exabytes/month, 20 percent CAGR, 2.5-fold growth
  • Western Europe: 37.4 exabytes/month, 22 percent CAGR, 2.7-fold growth
  • Central Europe: 17.1 exabytes/month, 22 percent CAGR, 2.75-fold growth
  • Latin America: 12.9 exabytes/month, 21 percent CAGR, 2.6-fold growth
  • ME & Africa: 15.5 exabytes/month, 42 percent CAGR, 5.8-fold growth

Global Business IP Traffic Highlights

Commercial IP traffic will grow at a CAGR of 21 percent from 2016 to 2021. Increased adoption of advanced video communications in the enterprise segment will cause business IP traffic to grow by a factor of 3 between 2016 and 2021.

Business Internet traffic will grow at a faster pace than IP wide area network (WAN). Furthermore, IP WAN will grow at a CAGR of 10 percent, compared with a CAGR of 20 percent for fixed business Internet and 41 percent for mobile business Internet.

Business IP traffic will grow fastest in North America. Business IP traffic in North America will grow at a CAGR of 23 percent -- that's a faster pace than the global average of 21 percent. In volume, Asia Pacific will have the largest amount of business IP traffic in 2021, at 17 EB per month. North America will be the second at 14 EB per month.

Note: the Cisco VNI Complete Forecast for 2016 to 2021 relies upon independent analyst forecasts and real-world network usage data. Upon this foundation are layered Cisco's own estimates for global IP traffic and service adoption. A detailed methodology description is included in the complete report.

Monday, February 13, 2017

Systems of Innovation for Ongoing Digital Transformation

Information technology (IT) advances are transforming the way we innovate in business, thereby disrupting the old guard and their predictable status-quo. It’s creating global market turbulence. Industries are converging, and new opportunities and threats are emerging, like never before.

So, how are savvy chief information officers (CIOs) leading this transition?

Back in 2015, the IBM Institute for Business Value conducted a market study that included the findings from over 1,800 CIO interviews from around the globe. The resulting insights are worthy of revisiting today, as we consider the digital business transformation outlook in 2017.

Introduction to the Torchbearer CIO

CIOs realize the barriers between formerly distinct industries are collapsing, as organizations in one sector apply their expertise to others – producing new hybrids and erasing prior traditional industry classifications in the process.

They believe it's the most influential trend that's transforming the mainstream business arena. Those deemed to be the ‘Torchbearer’ CIOs are particularly attuned to the shift -- in fact, a full 79 percent of these IT leaders expect industry convergence to have a significant impact.


How have these CIOs been preparing for a world of converging industries, intensifying competition and hyper-speed innovation? They’re focusing on three key goals in particular: 1) enhancing their organization intelligence and insight, 2) digitizing the front office and 3) strengthening the IT staff skills.

That said, only 57 percent of CIOs are reassessing their strategic direction. Many of the infrastructure decisions the IT department makes are no longer purely about technology -- they’re now considered core components of an organization’s essential business strategy.

Most Torchbearer CIOs have a plan of action. Seventy-one percent are considering the strategic implications of new technologies. They know they still have to provide basic IT services, as economically as possible. But they’re also looking for opportunities to create a competitive lead and improve the organization’s bottom line performance.

Moreover, the Torchbearer CIOs also place far more emphasis on building an agile organizational culture – one that supports rapid software developer experimentation and IT services prototyping – to help their team reach the market first with innovative new offerings.

In addition, the Torchbearer CIOs are eager to form partnerships that exploit the full potential of digital business technologies. They recognize that few enterprises can provide the full array of products, services and experiences that their stakeholders need and want.

Torchbearer CIO Lessons Learned

So, what can your organization take away from these study findings? What are the best practices that Torchbearer CIOs employ. Here’s four actionable insights:

  • Focus on disruptive innovation. Build an agile culture where rapid experimentation, informed by reliable intelligence, is the norm. Split big projects into smaller, more manageable chunks, allocate specific tasks to different teams and give them the freedom to get on with the job.
  • Pay close attention to what your external customers say. They can help you identify new trends, pinpoint problems with a product or service, clarify what differentiates your offering and establish what really matters to them, not just what you think they value.
  • Invest in technologies that will help you decipher the data you collect, and ramp up your organization’s analytical power. Identify the sorts of skills you’ll need to perform tomorrow’s jobs, not just the talent you need today.
  • Recruit for the future and collaborate with organizations that possess relevant expertise. Rotate existing employees every few months to help them develop an innovative, entrepreneurial spirit, strong business sense and the ability to communicate complex technological issues clearly.

Hybrid IT in Action: Systems of Innovation

Progressive CIOs have another significant thing in common; they know how to maximize their investment in legacy IT systems, and apply that solid foundation with the adoption of new platforms that -- when combined -- enable them to achieve superior transformation results.

For too many years, the decline of the mainframe platform has been predicted by those who have not been aware of the ongoing enhancements to these highly reliable systems. Many of the uninformed parties thought that mainframe extinction would be accelerated with the growth of cloud computing services. In fact, the mainframe has become a key component of hybrid cloud scenarios.

According to a Forrester Research market study, the mainframe is leveraged by 92 of the top 100 banks worldwide, 23 of the top 25 U.S. retailers, all 10 of the world’s largest insurers, and 23 of the world’s 25 largest airlines. Furthermore, successful CIOs have already unleashed the data and business processes that are embedded within their mainframe-based applications.

Starting with integrations between systems of engagement (SoE) and systems of record (SoR), they’ve defined innovative products and services that can tap the mainframe resource via APIs. Besides, containers and microservices are coming to the mainframe as more organizations adopt DevOps methodologies.

Forrester believes that integrating established apps with smaller new services will advance the mainframe environment towards faster application delivery, even greater scalability, and better overall manageability. They describe this evolved hybrid IT state as the ‘Systems of Innovation’ that so many CIOs apparently crave.

Sunday, November 13, 2016

Cloud Computing Usage Forecast to Quadruple by 2020

Hybrid IT is a catalyst of progressive organizations. In fact, two-thirds of surveyed leaders say a blend of traditional and cloud infrastructure enables a strategic competitive advantage, according to a market study by the IBM Center for Applied Insights.

That said, savvy leaders are using hybrid cloud to power their digital transformation agenda, going beyond cost reductions and productivity gains. They’re also using cloud as a foundation for next-generation initiatives -- such as the Internet of Things (IoT) and Cognitive Computing.

New Insights into Emerging Cloud Trends

According to findings from the latest Cisco Global Cloud Index (GCI), cloud service traffic is expected to rise 3.7-fold -- that’s up from 3.9 zettabytes (ZB) per year in 2015 -- to 14.1 ZB per year by 2020.

The ongoing growth of cloud computing is being partly driven by the increased migration to hybrid cloud architectures that support the evolving demand for combining IT systems of record and systems of engagement.

Cloud computing adopters are now able to achieve greater operational efficiencies, utilizing hyperscale IT infrastructure models. Therefore, additional analysis of IT application workloads on these cloud platforms was developed for this year's study.


2016 GCI study uncovered the following:

  • Business workloads will grow by 2.4 fold from 2015 to 2020, but their overall share of data center workloads will decrease from 79 to 72 percent.
  • By 2020, database, analytics and IoT workloads will account for 22 percent of total business workloads -- that’s compared to 20 percent in 2015.
  • Hyperscale data centers will grow from 259 in 2015 to 485 by 2020. Moreover, hyperscale data center traffic is projected to quintuple over the next five years.
  • Hyperscale data center infrastructures will account for 47 percent of total data center installed servers and support 53 percent of all data center traffic by 2020.
  • By 2020, cloud data center traffic will reach 14.1 ZB per year, up from 3.9 ZB per year in 2015. Note, a zettabyte is one trillion gigabytes.
  • By 2020, traditional data center traffic will reach 1.3 ZB per year -- that’s up from 827 exabytes (EB) per year in 2015.
  • By 2020, 92 percent of workloads will be processed by cloud data centers; 8 percent will be processed by traditional data centers.
  • Workload density for cloud data centers was 7.3 in 2015 and will grow to 11.9 by 2020. Comparatively, for traditional data centers, workload density was 2.2 in 2015 and will grow modestly to 3.5 by 2020.
  • By 2020, 68 percent (298 million) of the cloud workloads will be in public cloud data centers -- that’s up from 49 percent (66.3 million) in 2015 (35 percent CAGR 2015-2020).
  • By 2020, 32 percent (142 million) of the cloud workloads will be in private cloud data centers -- that’s down from 51 percent (69.7 million) in 2015 (15 percent CAGR 2015-2020).
  • By 2020, data center storage installed capacity will grow to 1.8 ZB -- that’s up from 382 EB in 2015, or nearly a 5-fold growth.
  • By 2020, the total global installed data storage capacity in cloud data centers will account for 88 percent share of total DC storage capacity -- that’s up from 64.9 percent in 2015.
  • Globally, the data stored in data centers will quintuple by 2020 to reach 915 EB by 2020 -- that’s up 5.3-fold (a CAGR of 40 percent) from 171 EB in 2015.
  • Big data will reach 247 EB by 2020, up almost 10-fold from 25 EB in 2015. Big data alone will represent 27 percent of data stored in data centers by 2020, up from 15 percent in 2015.
  • Globally, data generated by IoT will reach 600 ZB per year by 2020 -- that’s 275 times higher than projected traffic going from data centers to end users/devices (2.2 ZB); 39 times higher than total projected data center traffic (15.3 ZB).

The Global Cloud Index (2015-2020) was developed by Cisco to estimate worldwide data center and cloud-based traffic growth trends. The ongoing forecast is particularly insightful, as the global networked economy and data center infrastructure become more intrinsically linked to commercial success.

Learn more about the shift to hybrid cloud. Frank De Gilio describes his approach - Guerrilla warfare with hybrid cloud.

Monday, September 12, 2016

Coexistence: Adopting an Optimal IT Infrastructure Model

Some mainstream IT buyers might think that most cloud infrastructure vendors and service providers are essentially alike. But there are key differences. Besides, given the body of market research to the contrary, there’s clearly no such thing as a "one-size-fits-all" cloud solution.

Furthermore, if you believe that a hybrid cloud should support an IT agenda to transform a business, then a viable solution must consider the preexisting systems of record within the enterprise. That’s why forward-thinking CIOs often seek information and guidance on two fronts.

First, they want to know how to extract costs from their legacy IT investments. Second, they desire to use that assessment exercise to free-up budget and fund innovation via a DevOps model that would streamline new cloud-native technology deployments.

That’s why pragmatic CIOs understand the reality of a coexistence environment, where current on-premises IT systems must be an integral part of the total digital transformation equation.

Applying the Best of Both Worlds

In previous global market studies, senior executive decision makers have stated that they are likely to always have a blend of traditional on-premises IT and cloud-based services. Cloud computing has enabled organizations to increase their overall utilization of existing IT assets.

Consider these highlights from a recent survey of senior executives:

  • 92 percent of surveyed executives said their most successful cloud initiative enabled creation and support of new business models.
  • Executives said they expect 45 percent of workloads to stay on dedicated, on-premise systems, even as cloud adoption expands.
  • 83 percent of high-performing organizations said their cloud initiatives are coordinated or fully integrated within the organization.

According to the latest worldwide market study by IBM Institute for Business Value, there are four main reasons why organizations are strategically combining cloud-based services and traditional IT into tailored hybrid solutions.

Fifty-four percent of surveyed executives cited the most popular reason for implementing hybrid cloud solutions as lowering the total ownership cost of technology.

Forty-two percent of respondents believe that operational efficiencies can stem from selecting the most compatible infrastructure and middleware.

Forty-two percent of respondents also said that cloud services are proven to accelerate innovation by enabling quick prototyping of new ideas for faster experimentation.

To meet customer expectations, forty percent of respondents reported that cloud’s agile and composable attributes enable faster time to market for new products and services.


Additional Findings from the Market Study

The optimal Hybrid IT environment will differ by individual enterprise. Case in point; executives say they need to decide which IT and business functions can be delivered through cloud computing with a projectable, positive business outcome.

In two years, most organizations plan to use software-as-a-service (SaaS) with a variety of applications. However, many believe that their adoption of cloud could be restrained by three major deployment challenges -- security and compliance requirements; cost structure considerations; and risk of operational disruption.

Despite these challenges, successful companies are delivering business value through hybrid cloud in three areas -- operations, finance and innovation. Seventy-six percent of surveyed executives said their most successful cloud initiative has significantly achieved expansion into new industries. Close behind were the creation of new revenue sources and new business models.

That being said, fifty-seven percent of executives from high performing organizations identified cost as the most important criterion in deciding which workloads should be moved to the cloud.

One way to achieve an optimal hybrid solution is to tap into the capabilities and data that resides on existing systems. The study also found that innovation advantages can be gained by utilizing application programming interfaces (APIs) and by enabling access to external technical talent.

Likewise, conducting rapid IT experimentation gives innovative organizations the ability to test and fail quickly. Cloud computing is proven to enable nimble development and testing. What’s more, quick and automated resource provisioning can shorten applications development time.

In summary, taking advantage of hybrid cloud services is much easier and more effective when companies rely on skilled and experienced technology partners that provide expertise on recent trends, best practice methodologies and proven hybrid architecture frameworks.

Hybrid Cloud Information and Guidance

You have a choice; you can select the vendor that has all the Hybrid IT components -- technology, products and professional services -- that you will ultimately need to succeed. Choose to deploy an optimal hybrid cloud configuration and gain a strategic competitive advantage that will give you a decisive edge in your industry.

Learn how to gain a flexible and secure IT service delivery platform with an optimal hybrid cloud solution that’s designed, engineered and deployed as the best-fit for your particular digital business transformation requirements and technical specifications.