Read almost any article on IT trends today and it’s likely that ‘digital’ and ‘digital transformation’ feature heavily. And yet there is confusion over what this actually means. It has been misappropriated by some, diluting everyone’s understanding. I have heard it used for anything from technology change to new application releases, or, even more cringeworthy, to describe any IT focused project.

The latest usage setting my teeth on edge are those IT transformation projects focused on cloud adoption that are being promoted as ‘digital transformations’.

We’ve seen this happen before, with terms such as ‘intelligence’, ‘knowledge management’ and ‘cloud' being misinterpreted by some. But the difference is that all of those terms have clear definitions laid down by industry bodies: for example, the National Institute for Standards and Technology (NIST) defined cloud a decade ago.

What is digital transformation?

The challenge with ‘digital’ lies in the lack of any clear industry definition.

Observationally, the term tends to be used in two distinct ways:

• The first relates to the use of IT for something, such as ‘digital application’, ‘digital banking’ or ‘digital journalism’. These work well in subject areas where IT and non-IT versions are both readily available, distinguishing one from the other. However, when it comes to IT-specific contexts, we can safely assume analogue computing is not being considered, so the term digital is effectively redundant.
• The second relates to an older use of the term and is perhaps more insightful. Since the dot-com boom companies have been shifting their primary customer interfaces to be more digital in nature, replacing face-to-face, phone and postal communications with web sites, mobile apps and text messages. This has more recently expanded from IT and internet-enablement to more cultural change, with the prevalence of social media, chat bots and big data analytics.

Digital transformation in practice

As IT-enabled customer interfaces become more prevalent, they serve as the most obvious basis for the use of the term ‘digital transformation’. 

Similarly, we’ve seen the emergence of the term ‘digital workspace’: applying IT to provide more flexibility and agility in the interfaces between an organisation and its employees, and making it possible to securely work from anywhere. The term ‘digital’ can clearly apply to these transformations in an organisation’s interfaces with its customers, employees, partners and suppliers.

These digital transformations are also moving deeper into the IT solution space in order to meet such user-centric requirements. For example, customers expect rapid change and personalisation to suit their needs. They will not tolerate performance failings from demand-supply gaps and expect direct access on their own terms.

Cloud as a driver for change

Given these challenges it is no great revelation that cloud models are the norm for digital transformations because they offer the agility, flexibility and modularity required. Indeed, many consider cloud as essential for digital transformation. But that does not mean any move to the cloud is a digital transformation.

Surprisingly though, it is perhaps the redundant use of the term 'digital transformation' that should apply here, to remind us that cloud adoption, although not necessarily fulfilling a digital agenda, is transformational in nature. 

Many organisations simply perceive cloud suppliers to be lower cost and have more concentrated expertise in the technology services involved. With such basic motivations, the organisation simply has a goal to outsource, rather than considering anything transformational.

Nonetheless, when organisations start looking at cloud from an outsourcing perspective, they soon recognise the benefits available i.e. agility, flexibility and self-service. But to take advantage of those benefits, a more transformational initiative is needed to address any functional bottlenecks that may exist within the organisation itself, rather than simply a programme of work to shift from one supply base to another.

Adopting a transformation mindset

This is most readily achieved by first taking the time to develop the strategy and business case – ensuring they reflect the appropriate strategic objectives and target benefits. Both may need to be revised to shift from an outsourcing mindset to a transformational one.

As well as incorporating the ROI measures, the cloud business case should cover the effort required to change operating models, for example:

• more modular designs and costing models;
• integration with, and flexibility around the choice of, service suppliers;
• the large shifts in operational focus and skillsets.

Last but not least, it’s important to ensure that enterprise-wide cloud migration initiatives have wholesale buy-in across the IT function, its suppliers and customers before embarking on any activity.

Defining a clearer future

Similar factors apply to digital transformations. Without confusing one with the other, IT must work closely and clearly with the business in both cases. Using a common and well-understood terminology is key. So, if we associate ‘cloud’ with transformation, and only use ‘digital’ for those initiatives dealing with the critical business interfaces, everything will become far clearer.

Editor’s note: This is the second in a three-part series exploring common cloud myths and misconceptions. You can read the first part, around disaster recovery and business continuity, here, while stay tuned to CloudTech for the final part in the series.

With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend 21st Cloud Expo October 31 – November 2, 2017, at the Santa Clara Convention Center, CA, and June 12-14, 2018, at the Javits Center in New York City, NY, and learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.

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Digital transformation is changing the face of business. The IDC predicts that enterprises will commit to a massive new scale of digital transformation, to stake out leadership positions in the “digital transformation economy.” Accordingly, attendees at the upcoming Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA, Oct 31-Nov 2, will find fresh new content in a new track called Enterprise Cloud & Digital Transformation.

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When Salesforce was founded by two ex-Oracle executives in 1999, not only would the software landscape be changed, but a new economy would form underneath it.

A new report from IDC puts the number of jobs created by Salesforce and its ecosystem at 3.3 million worldwide between the end of 2016 and 2022.

The Salesforce ecosystem, the analyst firm asserts, is almost four times as big as Salesforce itself, as organisations who spend on cloud computing products also need to layout on ancillary services. In the six year period until 2022, the finance sector is expected to see the greatest gains, with $164 billion in new business revenue and 585,000 new jobs, with manufacturing, at $159bn new revenue and 638,000 new jobs, not far behind.

Not surprisingly, the US is far in front in terms of business revenue created, as well as on top for direct jobs created. Yet India, with almost 724,000, is the clear leader in terms of indirect jobs created; positions available by spending in the general economy by people filling the direct jobs.

The report also assessed the overall impact of cloud computing in the economy and job creation, giving best practice tips to organisations utilising or interested in cloud. IDC says the payoff to the larger organisation is much greater than the impact to the IT organisation “just as digital transformation is more than an IT function”, while the variety of cloud apps and development platforms available today mean most processes and workflows can be migrated to the cloud.

“IDC’s forecasts show a significant payback from investments in cloud computing out to 2022,” the report notes. “But even by then, spending on public cloud computing will be less than 13% of spending on IT. We are still on the ground floor of cloud computing, with lots of headroom for more payback.

“Salesforce and its ecosystem are well positioned to help customers take advantage of that headroom.”

Commenting on the report, Tyler Prince, Salesforce executive president of worldwide alliances and go to market innovation, wrote: “Last year, IDC forecasted the Salesforce Economy would create 1.9 million jobs and $389 billion in new revenues by 2020. We are encouraged by this huge increase from last year, and the strong momentum from the community of Salesforce customers, partners and developers who power the Salesforce Economy.”

Alongside the report, Salesforce also announced updates to AppExchange, the company’s enterprise cloud marketplace. New features include intelligent search, personalised recommendations, and embedded learning with Trailhead, the company’s education platform.

Air travel: what a gift to global business! Any executive from any country can leap onto a plane and, within a few hours, be busy in any overseas commercial centre or branch office. Only it is not quite like that.

The fact is that, for all the wonders of modern aviation’s high-speed links between major airports across the globe, the typical journey between a distant branch office and the nearest airport (at both ends) can be so tiresome and unpredictable that frustrating and unproductive hours can be wasted. Few faces light up at the prospect of a meeting overseas.

Today’s business networks are similar. Global service providers’ subsea and overland links have shrunk the world, delivering business class cloud connectivity to every major commercial, financial or government centre. It would be an absolute gift to any global enterprise – if only every sub office had equal and convenient access to those same cloud services. The reality is that cloud business applications are mostly accessed over the “best effort” Internet and not every office can depend on reliable QoS. Cloud computing, compared with on-premise solutions, can become as frustrating as that rush hour journey to the airport.

One solution to the nightmare car journey might be to take a train to the airport where possible. It reduces unpredictability but is less flexible and can be expensive. This is like paying for direct connection to the cloud via a private network: you get a better service, but lose some of the cost and flexibility advantages that make it worth migrating to the cloud.

So let us dream a little. If only road traffic could be perfectly managed in real time – with on-going traffic monitoring and flexible real-time re-routing and re-allocation of lanes and routes. Then car journeys would be faster, less frustrating, and a lot more predictable. Sending out truck roll teams to change the signs and re-route traffic would simply add more traffic to the chaos, so the solution would require a Traffic Control Plane separate from the actual Traffic. But, provided an intelligent central controller could monitor every junction and flip switches to optimise traffic flow in real time, the commuter benefits would be enormous.

Establishing such a road network would be very expensive and it would take years of installation and fine-tuning – but some say it will eventually be inevitable. This has, however, already been achieved on data networks. It is called Software-Defined Networking (SDN) and basically it means imposing a separate Control Plane on which data traffic in the network can be continuously monitored, analysed by a central controller and the flow optimised by controlling the network’s switches. SDN means that the configuration and policy of the network is dynamically programmable to respond rapidly to changes. SDN has revolutionised local area networks and data centre connectivity and is already extending to wider areas.

The SD-WAN

SD–WAN (Software-Defined Wide-Area Networks) applies SDN principles to the practical realities of the Wide Area Network – such as minimising delays over long distances between nodes, and providing predictable service quality over less predictable links.

When the network can extend across thousands of miles, the SD-WAN will make local forwarding decisions based on observed local conditions, such as link quality and throughput. The central controller implements software forwarding based not only on centralised policy objectives but also real-time network quality. The routing, priority and security for any application data flow is therefore independent of the actual network transport – whether wired Ethernet, MPLS, wireless, cellular, or a public Internet link. For a SD-WAN the SDN central controller concept is extended to allow continued operation with or without instructions from the controller – this ensures maximum uptime, optimized data delivery, and supports application service level guarantees.

There are other challenges that are addressed by SD-WANs, such as the implementation of Rest APIs to allow the controllers to interact with far-flung nodes and services. Above all, there is the challenge of less standardisation in the WAN space, so a lot of work is still being done to allow interoperability between different vendors’ equipment, and to allow the use of virtual machine hosting on common off-the-shelf hardware.

What does SD–WAN mean for business?

Scattered offices do not all enjoy equal access to the Internet. They often have to take advantage of whatever is available at relatively short notice. MPLS is nice, but more agile technologies such as Internet broadband, wireless and LTE may be quicker to install and often at much lower cost. SD-WAN can integrate any number of such links seamlessly to provide better bandwidth and reliability to the branch office, while maintaining required levels of security regardless of the underlying link structure.

This is a practical, cost-effective way to extend the full benefits of cloud computing to the very edges of an enterprise. It makes it quick and easy to integrate new network services, virtualize services, load-share over multiple different links, simplify configuration and policy management, and optimize application performance.

It is like the idealised national road network imagined earlier – except that it is becoming a reality and not just a dream. SD-WAN ensures reliable, high quality transport from the remotest or least well served branch office to the “airport”, where data streams connect to global long haul networks offering fast, reliable connectivity to and from cloud providers. Effectively, the SD-WAN assures application performance over the “last mile” transport, and the Service Provider network is then responsible for application performance over the long haul transport to the cloud service.

The traffic on a suitable service provider network can be classified according to the enterprise’s own business policies, then individual data streams can be split into sub-streams without duplication, so that the data sub-streams can be routed across diverse data paths in a similar way that mobile networks optimise communication.  Each sub-stream can be individually encrypted according to the service policy and routed to an independent data control node. These assignments are then dynamically shaped, in real-time, according to the service’s required QoE policies. The service provider gateway decrypts each sub-stream, re-assembles them into the full data stream and passes the data direct to the cloud provider.

Conclusion

IDC has predicted that 80% of new applications will be deployed in the cloud by 2030 and that public cloud will reach $141 billion by 2019. Many enterprises, however, find that their applications suffer poor or locally inconsistent performance when running in the cloud. Corporate IT needs an easier way to ensure control, security, performance and quality of experience for critical cloud applications, while allocating lower priority for merely recreational or non-business critical applications.

What is needed is an established system of distributed gateways at the front doorstep of all the major cloud service providers. It must offer the sort of optimised business service described above, and it should work with a company that offers corresponding SD–WAN optimisation of the last mile via – no matter what type of access is available to branch offices. A SD-WAN service provider should also be able to host their own multi-tenant and multi-segment gateways which dynamically enables their edge devices on the customer premises allow the customer to make or upgrade their own cloud connection at short notice, while being confident of excellent user experience, predictable performance, security and reliability. These service provider gateways should also federate with SD-WAN system of distributed gateways.

Extending the service provider’s capillary reach in this way, brings superb business services to every branch office. Straight from the cloud to grass roots users.

In his session at 21st Cloud Expo, James Henry, Co-CEO/CTO of Calgary Scientific Inc., will introduce you to the challenges, solutions and benefits of training AI systems to solve visual problems with an emphasis on improving AIs with continuous training in the field. He will explore applications in several industries and discuss technologies that allow the deployment of advanced visualization solutions to the cloud.

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As people view cloud as a preferred option to build IT systems, the size of the cloud-based system is getting bigger and more complex. As the system gets bigger, more people need to collaborate from design to management. As more people collaborate to create a bigger system, the need for a systematic approach to automate the process is required. Just as in software, cloud now needs DevOps.
In this session, the audience can see how people can solve this issue with a visual model. Visual models have existed for a long time. It is easy to perceive and understand, so people set various standards around the various models. And it’s ideal for cloud DevOps, just like CAD is for Product Lifecycle Management (PLM).

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More CIOs are investing in business technology that improves their organisation's resilience to cyber threats. Worldwide spending on IT security-related hardware, software, and services is forecast to reach $119.9 billion in 2021, according to the latest global market study by International Data Corporation (IDC).

With nearly every industry investing in IT security solutions, enterprise spending will achieve a compound annual growth rate (CAGR) of 9.6 percent over the 2016-2021 forecast period. Worldwide spending on security products and services will total $83.5 billion in 2017, an increase of 10.3 percent over 2016.

IT security market development

"Three overarching trends are driving security spending: a dynamic threat landscape, increasing regulatory pressures, and architectural changes spurred by digital transformation initiatives," said Sean Pike, vice president at IDC. "While IDC expects spending to continue growing, organisations are actively searching for product and service efficiencies that maximise spend in order to fully address such complex challenges."

IDC expects security spending to be somewhat evenly spread across four industry sectors in 2017: distribution and services ($19.7 billion), public sector ($18.6 billion), manufacturing and resources ($16.4 billion), and financial ($16.3 billion).

By 2021, however, the financial sector is forecast to move ahead of manufacturing and resources due to a 2016-2021 CAGR of 10.2 percent. Similarly, public sector security spending will nearly pull even with distribution and services by 2021 with a CAGR of 10.3 percent. The fastest growing sector over the five-year forecast period will be infrastructure with a CAGR of 11.8 percent.

On a global basis, banks, discrete manufacturers, and federal or central government agencies will spend the most on security products and services throughout the forecast period. Combined, these three industries will contribute to 30 percent of the worldwide total spending in 2017.

In addition to being among the industries spending the most on security solutions in 2017, federal or central government and banking will be two of the industries that will see the fastest growth in security spending over the five-year forecast, with CAGRs of 10.9 and 10.7 percent, respectively.

The industry that will see the fastest growth is telecommunications, with a CAGR of 12.6 percent. This growth will enable telecommunications to become the fourth largest industry in terms of total security spend in 2021, moving ahead of the process manufacturing and professional services industries.

More than 80 percent of security spending in 2017 will go to services and software. Services spending will be led by two of the largest technology categories – managed security services ($15.25 billion) and integration services ($12.5 billion).

Software spending will be focused on three categories – endpoint security, identity and access management, and security and vulnerability management – that will make up more than 75 percent of the software total this year.

Hardware spending will be significantly smaller throughout the forecast, dominated by network security solutions ($13.7 billion in 2017). In addition to being the two largest technology categories, managed security services and network security will also be the fastest growing categories during the 2016-2021 forecast with CAGRs of 14.3 and 11.4 percent, respectively.

Outlook for IT security market growth

The largest market for security products and services on a geographic basis will be North America with total spending of $37.8 billion this year. The second largest geographic market will be Europe, the Middle East and Africa (EMEA) at $26.2 billion followed by Asia-Pacific (excluding Japan) at $11.5 billion.

APeJ will see the fastest growth in security spending over the forecast period with a five-year CAGR of 19.9 percent. Within the region, China and Malaysia will see particularly strong growth with five-year CAGRs of 25.3 and 20.1 percent, respectively. Latin America is also expected to outperform the overall market with a CAGR of 10.4 percent.

Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, will discuss some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he’ll go over some of the best practices for structured team migration and discuss ways to control cloud costs.

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