Cloud Computing


Forces That Will Reshape the IT Landscape in 2016

There may be no better way to capture the state of the technology industry than to borrow Charles Dickens’ famous opening from A Tale of Two Cities: “It was the best of times, it was the worst of times…”

It never has been a better time to launch new offerings via the cloud. However, the availability of low-cost computing power combined with open source software development resources has lowered the barriers to entry in every market and created unprecedented competitive challenges as customer expectations continue to rise.

All of these trends have impacted the nature of IT and how organizations leverage it.

THINKstrategies believes the following macro-market trends will reshape further the priorities and responsibilities of IT in 2016.

Uncertain Economy

“Business investment across the U.S. is fizzling out.” That’s the opening line of a recent Wall Street Journalarticle about the growing apprehension among corporate executives regarding the state of the global economy.

Given these rising concerns, you can expect IT capital spending to be capped in 2016. This means a greater reliance on lower-cost cloud services, including Software as a Service applications and Infrastructure as a Service computing power and storage.

However, it also means a more conservative approach toward major IT investments to support strategic corporate initiatives. The initiatives themselves will swing back toward reducing operating costs instead of boosting top-line sales like we’ve seen over the past few years.

As a result, doing more with less will once again become the mantra of most IT departments, and finding ways to help streamline corporate operations will be their primary objective in 2016.

Escalating Cybersecurity and Terror Threats

We are, unfortunately, living in an increasingly dangerous world in which we are all at risk of a widening array of physical and virtual attacks. Real-world terrorist acts and cyberthreats are becoming more prevalent and severe.

As a consequence, a growing proportion of the IT budget will be dedicated to physical and cybersecurity measures. Every business will need to invest more heavily in technology that provides greater security in their real-world operations.

More sophisticated access controls, facility monitoring and even personnel tracking will become a priority in the coming year to mitigate the risks of violent assaults in office buildings, retail outlets, manufacturing plants, and other places where employees and customers congregate.

Deploying IP-based surveillance cameras and a new generation of sensors inside and outside buildings, for instance, no longer will be a nice-to-have security element, but will become a must-have part of nearly every organization’s physical security scheme.

It is no longer a question of if an organization’s operations and associated data is going to be hacked, but when the inevitable attack will occur and how extensive it will be. With the advent of the Internet of Things, a new generation of connected products and broader set of powered operations will become vulnerable to cyberattacks.

Therefore, organizations of all sizes — and large-scale enterprises in particular — will have to make even more significant investments in sophisticated security systems and staff to counteract these threats.

Given the magnitude of the cybersecurity challenge, many IT organizations will need to enlist the help of managed security service providers to augment their internal cybersecurity capabilities.

IoT and Digital Marketing Convergence

While it seemed like everyone was talking about the transformative power of IoT and the digital revolution to change the way products are designed and customers are engaged, only a handful of companies made a significant push in this direction during the past year.

The good news is that a growing number of IoT success stories are demonstrating the tangible benefits of connected products and services.

However, most organizations were overwhelmed by the grandiose IoT ideas and unsure how to overcome the operational challenges associated with capitalizing on the business opportunities created by IoT and digital marketing programs.

Escalating competitive pressures, combined with rising customer expectations, will force more companies to move forward with IoT and digital marketing initiatives. However, growing economic uncertainly will compel them to be more limited efforts.

Rather than agree on an all-encompassing IoT/digital strategy and long-term plan, most IT organizations will adopt a more practical approach aimed at quickly testing the technologies necessary to support a series of narrowly targeted projects. THINKstrategies refers to this tactic as “inverting the long tail.”

IT organizations will play a key role in guiding these initiatives in 2016. They will determine what’s technologically feasible, select the right solutions to support the projects, measure their success, and determine how to scale IoT and digital marketing programs.

IT will become involved in the product development process, and will be called on to work with business counterparts to determine how to properly capture, analyze and act upon the data the IoT and digital marketing projects generate.

Hybrid Cloud Management

IoT and digital marketing programs wouldn’t be possible without the elastic storage, universal connectivity and economies of scale of the cloud. However, it is clear that enterprises won’t be swapping out all their existing IT operations with virtual cloud resources. Instead, they will need to tap a variety of cloud resources to meet their specific needs.

Therefore, IT organizations must become adept at contracting for specialized cloud services, configuring them to interoperate with their on-premises systems and software, and administering them to optimize their performance and value.

Many IT organizations will have to admit that they don’t have adequate skills or resources to manage their hybrid cloud environments on their own. They will need to team with managed cloud service providers that can assume some of the responsibilities.

Bottom line: As a result of the rising macro-market pressures, IT will continue to shift its focus in 2016 from managing its own physical assets to support the needs of its internal employees and operations to managing a wider range of virtual resources to better serve its external customers and partners.

Jeffrey M. Kaplan

Jeff Kaplan is the managing director of THINKstrategies, founder of the Cloud Computing Showplace, and host of the Cloud Innovators Summit executive forum series. He can be reached at [email protected].

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