Consumer and enterprise IT will change dramatically and the traditional IT function will disappear.
By
09 Mar 2010
Probably the biggest event in the IT industry last year – next to a stabilising world economy – was the re-emphasis on how consumer and enterprise computing will be transformed over the next decade.
This was supported by a growing key trend that emerged over the last year, namely the disappearance of the traditional IT function, and this will continue to shape the industry more than many believe.
Operations and technology
In place of the traditional IT function, many enterprises are establishing a hybrid organisation called “technology and (business) operations (T&O)”. In many cases, a chief operating officer (COO) assumes the position as the overall executive leader, eroding away the role of the chief information officer (CIO). To compensate for this change of roles, many companies now have a chief technology officer (CTO) to provide direction on technology adoption. The focus of the CTO is centered on business operations and technology excellence, while also enabling the company to become more independent of vendor opinions.
While a few industry observers believe this to be a pendulum, which swings between business and IT ownership, others believe this is a direct result of the failure of the traditional IT function to drive true business enablement from an innovation and IT operational excellence perspective.
This was a direct consequence of the focus of the traditional IT function being often centred on managing vendors and service providers. All too frequently, technology expertise was seen as a commodity and enterprise-wide outsourcing the panacea for all woes. Consulting firms helped reinforce this message with many organisations seeing true functional or technical innovation being a procurement concern, dismissing the thought that every corporate would most likely procure the same ideas. Clearly, the success of enterprise-wide outsourcing, procuring innovation, and managing technology skills as commodity, did not generate the intended benefits.
This realisation came at a time when technology vendors and open source projects were discovering the Internet as a discrete platform and developing wide-ranging partnerships, and specialised outsourcing services with clear benefits, called “cloud services”. While we see a lot of new cloud services appearing, the surprised spectator found that the best offering for a “compute cloud” (essentially server and storage hosting) for instance, came from a bookshop, which incidentally followed their own ideas on building the best possible IT platform.
Cloudy future
Next to using a service-oriented architecture (SOA) set of technologies, we are seeing the first cloud operating systems appearing such as Google’s Cloud Desktop Ecosystem around Chrome OS. Reviewing potential business cases for driving such changes, CFOs will most likely become key change agents for this transformation journey.
While cloud computing has yet to produce a larger global ecosystem of offerings, the initial capabilities being provided are so promising that the creation of private (internal) and public (external) clouds will become undoubtedly a serious business, assuming corporate technology strategy follows key trends. Such key trends would focus on thin client applications, in addition to SOA-like expert architecture patterns which ensure single platforms providing expertise throughout the technology ecosystem. Such IT environments are easier to evolve into cloud offerings, than legacy environments.
The key to driving strategic changes for ongoing improvement is to focus on business operations and technology expertise. The imperative is not to put the organisation in a high risk situation by second-guessing the future.
This does not suggest a reactive approach. Given that we just passed 1 January in year one after the disruptively changing economic, social, and political crisis, it is the duty of smart technology leaders to be strategic, but to avoid the corset-like strategy dictating how the future will be. Given the trends discussed, the best advice is to work towards a scenario planning within technology and operations.
Trends for 2010+
My prediction for 2010+ is that there will be a shift to a more dynamic business environment, pressuring the enabling functions to react much faster to the needs of the frontline and to expect enablers to show leadership in taking responsibility to expand the revenue base, at the very least to lower the cost base.
The key trends will revolve around agility, innovation, and cost management—the old General Electric paradigm of business expansion, while reducing operational cost.
The first trend will be replacing “IT departments” with business operations and technology departments. This in turn will lead to O&T in driving a “business” scenario-based strategy for 2010-2012 using the aftermath of the financial crisis, as a justification to make larger changes and bigger bets.
The hiring of key talent by corporations driving larger changes has already begun. This will follow another new paradigm: that true change can only be conducted by adding incremental value on an almost monthly interval and not via a multi-year multi-million-dollar investment. This can be done by carefully orchestrating a set of strategic projects driving transformation over a few years, but allowing adjusting incremental projects as required.
Inspired by latest cloud services trends, organisations will move towards a mash strategy, based on internal and external clouds, to drive lower costs and fast rollout of capabilities. Building and adoption of cloud services will receive a serious uptake in 2010, with single vendor enterprise-wide outsourcing being on the back track. Driven by the cloud adoption, we will also see that service-oriented Architecture (SOA) will become the key fabric of technology around the globe.
As technology departments and open source projects evolve jointly with the massive adoption of open source in cloud services, a new influx into the enterprise will emerge in 2010. This will benefit technology staff, as the learning and open information sharing in technology concepts and architectures in the open source communities are significant. Though this is often seen as an intangible benefit, it will still contribute significantly towards the technology department’s journey to higher maturity.
Changes on the desktop will play a larger role in many organisations. Technology teams will start to segment the user base and provision clients, as per the need. Different client operating systems (Windows, Linux, and Apple) will play a role. The virtualised desktop or client application virtualisation will receive serious focus in the drive to create an agile, yet lower cost, client platform. Cloud operating systems will be introduced as first adopters, thus allowing T&O to avoid dealing with the client side altogether.
The mobile client, in parallel, will find a serious move to RIM and Apple. Both companies will drive hard in innovation. The iPad will be predominantly a platform used by business managers using business intelligence, office, and communications tools.
Summary of 2010+ trends
Companies will focus on being more agile, innovative, and manage cost-for-value better with the following key trends:
1. Transform IT to business operations and technology
2. Reduce vendor dependency; corporations to drive in or multi-source
3. Mature utilisation of open source in the enterprise
4. Increase in SOA adoption
5. Technology departments to focus on establish architectures allowing ‘mash clouds’ or ‘inter cloud’
6. Client transformation with multiple platforms -- Linux, Mac, Windows, virtualised clients (VDI) and early adopters will drive ‘client cloud OS’
7. Mobile computing will reach the enterprise and the iPad will become a key field force and executive platform
I am looking forward to February 2011 for the review of what actually did happen.
Axel Winter is the regional enterprise architect, Asia Pacific, Cisco. Axel currently drives cloud transformation at Cisco. He has worked in consulting and outsourcers with Accenture and Deloitte, and was a leading technologist at GE Capital. He accurately identified some key trends in 2009 including the trends towards operational excellence and broad open source adoption. Read more about his insights on his blog at axelwinter.com.
