Emerging technologies, such as IoT, robotics, and augmented reality or virtual reality (AR/VR), will drive the next wave of growth in the information and communications technology (ICT) industry, increasing the overall opportunity to $5.5 trillion by 2020, according to the latest market study by International Data Corporation (IDC).

The IDC forecast illustrates that the ICT sector is dependent upon new technology innovation for growth, as traditional business technology revenue streams begin to decline in the face of cannibalization, substitution, and the shift to cloud-based computing solutions.

Global ICT market development

New technologies, which IDC calls “Innovation Accelerators,” will provide almost $7.4 trillion in aggregate industry revenue from 2015-2020 — adding $1.8 trillion to the overall size of the industry in terms of annual sales by the end of the forecast period.

A large proportion of this growth will come from the fast-growing IoT market, which is forecast to reach almost $1.3 trillion in annual revenue by 2020, of which more than $1 trillion represents new opportunity outside of traditional technology market categories.

According to the IDC assessment, robotics, augmented reality or virtual reality, security, cognitive systems or artificial intelligence, and 3D printing will contribute the rest of this fast-growing portion of the ICT market.

“The traditional ICT market of data center infrastructure, client devices, software, services, and telecommunications is now growing at a rate not much faster than real GDP and increasingly resembles a mature sector of the overall economy,” said Stephen Minton, vice president at IDC.

That being said, between 2015 and 2020, overall ICT Spending – excluding the Innovation Accelerators – will see a compound annual growth rate (CAGR) of just 1 percent in constant currency terms. Including the Innovation Accelerators, ICT spending will increase by 5 percent over the same period. In total, the Innovation Accelerators will post a CAGR of 18 percent.

Asia-Pacific (excluding Japan) represents the largest market for Innovation Accelerators, forecast to reach more than $600 billion by 2020, followed closely by the United States. The fastest growth over the same period will be in Latin America, Central & Eastern Europe, and the Middle East and Africa.

“Device sales are now dominated by mobile devices and cloud service providers represent a growing proportion of all infrastructure hardware and software sales, while big data and analytics are at the heart of the fastest-growing opportunities. Meanwhile, growth in the telecom market is already entirely dependent on mobile,”  added Minton.

Global outlook for public cloud services

With public cloud services still growing at a double-digit rate, cloud computing will continue to cannibalise traditional spending on infrastructure, software, and IT services. Big data and analytics is also still expanding at a double-digit rate of growth and is forecast to see a 12 percent CAGR between 2015 and 2020.

Public cloud services and big data and analytics will each provide more than $200 billion in annual revenue by 2020. Meanwhile, the explosion in smartphone sales over the past few years and the ongoing growth of mobile data services means that overall mobility offerings are already valued at more than $1.5 trillion in annual sales.

Read more: Global cloud IT infrastructure revenues hit $8 billion in Q117, says IDC

The emergence of hyperscale cloud service providers transformed the enterprise computing environment. IT infrastructure vendors have learned to adapt to shifts in market demand and embrace the ongoing changes that have affected the data centre server and storage markets. Enterprise CIOs and CTOs have also modified their traditional budget allocations.

Total worldwide enterprise storage systems factory revenue was down 0.5 percent year-over-year, reaching $9.2 billion in the first quarter of 2017 (1Q17), according to the latest global market study by International Data Corporation (IDC).

Data centre storage market development

Total capacity shipments were up 41.4 percent year-over-year to 50.1 exabytes during the quarter. Revenue growth increased within the group of original design manufacturers (ODMs) that sell directly to hyperscale data center operators.

This portion of the market was up 78.2 percent year-over-year to $1.2 billion. In contrast, sales of server-based storage were down 13.7 percent during the quarter and accounted for $2.7 billion in revenue.

External storage systems remained the largest market segment, but the $5.2 billion in sales represented a modest decline of 2.8 percent year-over-year.

“The enterprise storage market closed out the first quarter relatively flat, yet adhered to a familiar pattern,” said Liz Conner, research manager at IDC.

According to the IDC assessment, spending on traditional external arrays continues to shrink, while spending on all-flash deployments once again posted strong growth and helped to drive the overall storage market. Meanwhile, the hyperscale data center business segment displayed solid growth in 1Q17.

Dell held the top position within the total worldwide enterprise storage systems market, accounting for 21.5 percent of spending. HPE held the second position with a 20.3 percent share of revenue during the quarter.

HPE’s share and year-over-year growth rate includes revenues from the H3C joint venture in China that began in May of 2016. As a result, the reported HPE/New H3C Group combines storage revenue for both companies globally.

NetApp finished third with 8 percent market share. Hitachi and IBM finished in a statistical tie for the fourth position, each capturing 5 percent of global storage spending.

As a single group, storage systems sales by original design manufacturers (ODMs) selling directly to hyperscale datacenter customers accounted for 13.2 percent of global spending during the quarter.

The total All Flash Array (AFA) market generated almost $1.4 billion in revenue during the quarter, up 75.7 percent year-over-year. The Hybrid Flash Array (HFA) segment of the market continues to be a significant part of the overall market with $2 billion in revenue and 22 percent of the total market share.

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Information technology 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 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 realise the barriers between formerly distinct industries are collapsing, as organisations 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% 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 organisation intelligence and insight, 2) digitising the front office and 3) strengthening the IT staff skills.

That said, only 57% 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 organisation’s essential business strategy.

Most Torchbearer CIOs have a plan of action. 71% 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 organisation’s bottom line performance.

Moreover, the Torchbearer CIOs also place far more emphasis on building an agile organisational 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 recognise 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 organisation 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 organisation’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 organisations 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 maximise 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 organisations 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.

(c)iStock.com/imagedepotpro

Information technology 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 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 realise the barriers between formerly distinct industries are collapsing, as organisations 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% 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 organisation intelligence and insight, 2) digitising the front office and 3) strengthening the IT staff skills.

That said, only 57% 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 organisation’s essential business strategy.

Most Torchbearer CIOs have a plan of action. 71% 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 organisation’s bottom line performance.

Moreover, the Torchbearer CIOs also place far more emphasis on building an agile organisational 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 recognise 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 organisation 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 organisation’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 organisations 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 maximise 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 organisations 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.

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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 pre-existing 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.

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The world of business is changing. Disruptive shifts in power are forcing everyone to question the established status quo. In particular, savvy chief executives are tasking IT organizations to help create compelling customer experiences, support new business models and adopt agile operational processes.

That’s why the vast majority of IT and business leaders are joining forces on the organizations’ most pressing commercial needs and wants. They seek an open and flexible business technology foundation that’s an enabler, rather than an inhibitor, to meaningful and substantive workflow progress.

Forward-thinking executives believe cloud services can empower them to achieve their strategic business outcomes. Moreover, they want their whole leadership team to collaborate across the business, developing a comprehensive IT strategy that utilises existing infrastructure investments and the elasticity of cloud services.

Innovation: Opportunities vs challenges

Meanwhile, CIOs are still compelled to manage the legacy IT infrastructure, while supporting new demands for flexible systems that enable digital innovation. Leading organisations are already blending traditional IT and cloud infrastructures to achieve better business outcomes.

They’re planning to adopt more new technology, such as cloud-enabled video services, enterprise mobility apps, social business, IoT and big data analytics. They’re very busy efficiently supporting current business objectives with existing infrastructure, and yet they must ensure that IT drives strategic value for the company.

What’s more, they’re using hybrid cloud to springboard to next generation activities that allow them to capture new markets. But there are many others that are still assessing their immediate needs, while considering all the options. Embracing cloud is a work-in-progress. The journey begins with an understanding of the basics.

Cloud services: Enabler of disruption

Cloud is now viewed as an impetus for innovation and collaboration. CEOs identify business technology as the number-one factor they see impacting the success of their organization. For these forward-thinking leaders, technology isn’t just part of the infrastructure needed to implement a business strategy. It’s what makes entirely new disruptive strategies possible.

And without that technology in place to spark continual innovation, CEOs fear being left behind. As a result, CIOs foresee a huge shift in their own roles and responsibilities, as they evolve from an IT service provider to a business innovation enabler.

Often, the private versus public cloud question is not viewed as an either/or decision. Informed organizations are frequently opting to utilise both platforms – what’s typically called an Open Hybrid Cloud services environment.

Hybrid cloud: Pathway to the future

Hybrid cloud computing dramatically increases your ability to create, deploy and integrate new digital services quickly – allowing your organization to keep pace with a shifting economic landscape and increasingly competitive marketplace.

We define hybrid cloud as the secure consumption and integration of services from two or more sources, including private cloud, public cloud and/or traditional IT infrastructure.

A hybrid cloud allows access to data, applications and services where they are most optimally placed – whether on a public cloud, private cloud or on-premise within an existing IT infrastructure, such as the traditional enterprise data center.

A hybrid cloud approach typically encompasses a wide range of choices including service providers, delivery configurations and billing models. It’s designed with the flexibility to change and integrate environments, data storage and services as needed.

Once implemented, a hybrid cloud offers many benefits, including the ability to compose, orchestrate and manage diverse IT workloads, thereby exploiting the portability of stored data assets and associated software applications.

Hybrid storage: Data in motion and at rest

The growing adoption of cloud computing is having a corresponding impact on IT storage evolution. Today’s digital business imperatives rely upon easy access to data insights. Next generation enterprise storage solutions support the need to capture, manage and perform real-time analysis on exponentially expanding pools of unstructured data.

That being said, most current enterprise IT environments already include some combination of on-premise block, file and object storage technologies. Over time, utilisation of the diverse mix of storage platforms can become sub-optimal.

Data is grouped into three common categories: frequently accessed data (hot data), infrequently accessed data (warm data), and rarely accessed data (cold data) that’s stored on slow, less-expensive storage. As hot data cools down and is accessed less frequently, it can be dynamically moved to the optimal storage platform(s).

An adaptive, modular hybrid cloud storage model can increase your flexibility and enable you to choose from all the best-fit solutions. So, how do you deploy a storage model that supports the fluid movement of data? Russ Kennedy describes an evolved approach to proactively securing and moving data to the most appropriate platform, in his insightful editorial entitled “Hybrid cloud storage: Past, present and future.”

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Forging a viable business technology strategy for today’s global networked economy is a high priority for most forward-thinking CEOs across the globe. Their guidance to CIOs is to create the fusion between existing IT infrastructure and modern cloud services. Moreover, the shift to a hybrid IT model must support the organization’s key commercial expansion objectives.

The savvy leaders who have a superior approach can extract greater value from their legacy IT investments, and launch new initiatives based upon public and private cloud computing services. This is the new normal – CIOs must create the optimal blended environment for purposeful technology-enabled innovation.

Primary motivation

A global study of 500 hybrid cloud decision makers revealed that organizations are increasingly integrating cloud computing and storage resources with traditional IT infrastructure to accommodate dynamic needs and specific business priorities, according to a market study by the IBM Center for Applied Insights.

This thought-provoking study found that improving productivity is currently the number one goal of cloud service adoption, as the most progressive senior executives plan to offload some of their IT resources and management complexity to the cloud.

A close second goal of digital transformation is improved security and risk reduction — using the flexibility of a hybrid solution to choose which workloads and data to move to the cloud and which to maintain on-premise.

The other two most mentioned goals by survey respondents are IT infrastructure cost reduction – i.e. shifting costs from fixed IT to as-needed cloud services – and scalability to handle dynamic IT workloads.

Why maturity matters

Following their detailed analysis, the IBM report authors grouped the survey respondents into three categories, based upon the maturity of their hybrid management capabilities and whether they’re reporting a strategic edge that’s realised from their hybrid cloud deployments.

Frontrunners are gaining a competitive advantage through hybrid cloud and are managing their environment in an integrated, comprehensive fashion for high visibility and control (as an example, through a single data-driven dashboard). Challengers are on the journey toward competitive advantage, but haven’t fully achieved unified management of their hybrid cloud environment, while chasers are not yet using hybrid cloud to drive competitive advantage and are in the early stages of gaining integrated control over their hybrid environment.

Benefits of hybrid leadership

What’s the big improvement of being a visionary frontrunner in your industry? They’re achieving noteworthy business outcomes with a hybrid cloud — such as productivity gains, including cutting operational costs and maximizing the value of existing IT infrastructure — at a higher rate than other organizations.

Frontrunners are also more effectively using hybrid cloud to drive digital business innovation, including the creation of new products and services and the expansion into new markets. They also apply hybrid cloud solutions to experiment with cognitive computing and the Internet of Things (IoT) — which have the potential to enable the development of new business models.

Moreover, the frontrunners are using hybrid solutions as a driver of business process change, with 85 percent reporting that hybrid cloud service adoption is accelerating a progressive digital transformation agenda at their companies.

Hybrid challenges and opportunities

Most frontrunners say they have achieved measurable progress from their hybrid cloud efforts. However, more than one in four have experienced difficulty executing their plan to integrate legacy IT infrastructure and cloud computing environments.

Finding and retaining the technical staff with the desired experience is often a challenge, with one in three survey respondents citing an internal skills gap as a big unresolved issue. Furthermore, while companies adopt cloud services to improve security, it remains their number one concern.

Infact, frontrunners cite management complexity and security as a major obstruction to progress. Over three-quarters report that hybrid introduces greater IT management complexity into their environment, and 70 percent say that their hybrid environment causes them greater security concerns.

How are these early-adopters leveraging hybrid environments to achieve a meaningful and substantive competitive advantage? Study findings indicate that they apply a very intentional and holistic approach to implementing and managing their hybrid solutions.

Culture is a key to ongoing hybrid success

The established frontrunners also understand that the complexity of hybrid environments is best tackled through a collaborative approach to IT investment decision making — bringing both the managers of IT organizations and Line of Business (LoB) leaders together on a common cause.

The IBM study findings also uncovered that in almost three-quarters of frontrunner organizations, hybrid cloud has elevated the extent to which the CIO is now acting as a trusted adviser to the overall business leadership team.

The collective C-suite and senior IT roles collaborate on key technology decisions that impact business goals. This newfound collaboration sheds light on the benefits of Shadow IT, where the progressive LoB leadership is already using forward-looking cloud services to advance their growth agenda.

Besides, 81 percent of the frontrunners report that hybrid cloud is helping to reduce Shadow IT growth within their organisations. Proving, once again, that savvy CIOs are the ones that are proactively embracing the shift to Hybrid IT models, and thereby regaining workload deployment momentum that was lost due to prior computing and storage resource provisioning constraints.

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While the decisive CEOs have a digital transformation agenda, those companies executing plans to re-imagine their business models are in the minority. And yet, the early adopters now using cloud computing are enabled to respond quickly to changing market conditions. In contrast, the laggards are undecided and risk falling further behind.

This is a global phenomena, where the industry and local market leaders are able to enact their transition with limited interference or threats from more traditional competitors. Just consider the current status-quo within the United Kingdom, as an example.

The transformation of UK businesses is still relatively immature. Many organisations are aware of the potential of open hybrid cloud adoption, but they fail to actively address the technical debt that defines their legacy IT environment. Besides, they tend to narrowly focus on a small snapshot of the bigger picture.

While some British leaders have progressive transformational goals under consideration, much more work is needed if they are to reach their full digital potential. This is the key finding from the latest market study by the UK-based Cloud Industry Forum (CIF).

Their study was conducted in the fourth quarter of 2015. They polled 250 senior IT and business decision-makers from both the public and private sectors. What they uncovered was not encouraging: just 16% of organisations have a digital transformation strategy in place. However in two years, 72% of those polled say they will be better prepared. What are they waiting for, before they act? Perhaps they need a little guidance to show them the way forward.

Maybe they seek someone who can describe how to distinguish between the herd of unimaginative me-too cloud service providers, and thereby offer an alternative point of view – one that can demonstrate they’ve navigated boldly across a complex and disruptive digital business transformation landscape.

“Cloud computing is the agent of digital disruption, and we can see that there are significant benefits to be had by businesses that pursue both digital transformation and cloud computing strategies in tandem, ” stated Alex Hilton, CEO of CIF.

Hilton believes that cloud computing and digital transformation go hand in hand. In fact, 85% of UK businesses with a digital transformation plan have already benefited from a tangible competitive advantage.

Cloud services form the foundation of digital transformation and can facilitate rapid business change. That is apparent, it’s also clear from their research that transformation strategies serve to enhance the effectiveness and benefits of cloud computing implementations.

That’s why the more progressive organisations have focused on developing multifaceted talent – beyond basic technical-centricity. The notion of engaging a Digital Polymath is compelling. Harnessing the wisdom of a worldly open-minded individual that acknowledges the near-term challenges and opportunities, yet also has the vision to be able to anticipate the broader future.

Other key findings from the study include:

• 13% of organisations that have implemented, or planning on implementing a digital transformation strategy, say that cloud is critical to it, and a further 80% say that cloud is important.
• Implementing a digital transformation strategy benefits cloud users, and those that have are statistically more likely to report experiencing greater benefits from their cloud deployments.
• 38% of cloud users with a digital transformation strategy say that cloud has given their organisations a significant competitive advantage. This figure is higher than the number that do not have a digital transformation strategy reporting the same (5%).
• The cost savings of cloud users also increases if the organisation has implemented a digital transformation strategy (26% average saving) compared to those who have not (9% average saving).
• The CIO is the most likely to be the driving force behind digital transformation, and by some margin at 60%. The next most likely is the CEO in 18% of cases.
• 59% of organisations that currently have, or are in the process of implementing, a digital transformation strategy say it will steer the use of technology over the next decade.
• 43% of survey respondents report that the intention is to achieve better use of data and analytics, and 30% report it is to improve innovation abilities.

The UK market study results are somewhat consistent with the findings of similar surveys of business leaders in the North America region. Striving to merely reach parity with the more progressive market leaders in your industry is likely a blueprint for a myopic plan of action. When you eventually arrive at that destination, you discover that the goal posts have already moved.

The alternative perspective – think ahead; imagine what’s next; define that future state; design a distinctive digital agenda that’s very difficult for competitors to simply replicate; execute in the now.

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Cloud enables IT agility, empowers DevOps teams and helps to transform legacy business models. The fifth annual Future of Cloud Computing survey investigates key trends in corporate cloud usage. This year’s insightful survey findings offer perspective from cloud service practitioners across all industry sectors.

“Cloud has been gaining momentum year­-over-­year since the Future of Cloud Computing survey was launched five years ago. Looking at the adoption rates and trends at such a detailed level, it’s undeniable that the most successful technology leaders of today and tomorrow are scaling in the cloud,” said Jim Moran, General Partner at North Bridge.

“Last year, we discussed the second cloud front and the rise of cloud­-native companies. This year, we’re seeing the pervasiveness of cloud disrupt industries across the board as companies look to maximize and implement cloud as a strategic and integral technology,” Moran added.

“We’re also seeing the emergence of the cloud as the only way businesses can truly get more out of their data including analysing and executing on it in real-­time. This will be a huge opportunity, but as the survey showed, because data rarely moves between clouds companies must first learn how to interconnect disparate data sources into new applications.”

Savvy business leaders are no longer debating whether or not to use cloud, but how pervasively they will use it in their digital transformation plans. The latest survey results highlight record levels of corporate adoption of cloud computing, both for business functions and in areas such as content management and application development in the cloud.

Even the most traditional IT teams are finally evolving. Some are taking back technology strategy from the forward­-looking line of business leaders that led the way to progress. Therefore, North Bridge believes that digital technologies – delivered from the cloud – are becoming differentiating factors for more businesses.

Cloud is the business transformation catalyst

• Significant processing, systems of engagement and systems of insight are moving to the cloud ­­– 81.3 percent of sales and marketing, 79.9 percent of business analytics, 79.1 percent of customer service and 73.5 percent of HR & Payroll activities have already transitioned to the cloud.
• IT is moving significant processing to the cloud with 85.9 percent of web content management, 82.7 percent of communications, 80 percent of app development and 78.9 percent of disaster recovery now clou­d-based.
• While business users have been a fan of cloud’s ease of use, accessibility and scalability since 2011, the importance of cloud agility has jumped from fourth to second in importance within five years.
• Among all survey respondents, the top inhibitors to cloud adoption are security (45.2%), regulatory/compliance (36%), privacy (28.7%), vendor lock-­in (25.8%) and complexity (23.1%).
• Concerns regarding interoperability and reliability have fallen off significantly since 2011 (15.7% and 9.9% respectively in 2015). However, the cost of cloud services are now three times as likely to be a concern today, versus five years ago.

Raised expectations for public and hybrid cloud

• Today, three quarters of company data in significant volumes is living in private or public clouds. However, company data in hybrid cloud systems is forecast to double over the next two years.
• Corporate cloud computing strategies are focusing on public (up 43.3%) and hybrid (up 19.2%) while private cloud has taken a significant back seat in comparison (down by 48.4%).
• SaaS is the most pervasive cloud technology used today with a presence in 77.3 percent of all organizations, an increase of 9 percent since 2014.
• Accordingly, ROI expectations are high with 78 percent expecting to see results within three months. Fifty eight percent expect ROI in less than three months for PaaS services.
• Among users taking the survey, the biggest factors preventing use of public cloud offerings are security (38.6%), privacy (29.8%) and expertise (22.8%). Regardless, the outlook for ongoing cloud service adoption is very bright.

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Worldwide, there’s a growing appreciation for the many benefits of the open dource way. Clearly, being truly open is a frame of mind that can apply to just about anything in life – including the development and nurture of a progressive company culture that’s equipped for the challenges and opportunities of today’s Global Networked Economy.

Jim Whitehurst, CEO of Red Hat, recently launched his new book entitled “The Open Organisation” – Igniting Passion and Performance. He says, “The conventional approach to business management was not designed to foster innovation, address the needs and expectations of the current workforce that demands more of jobs, or operate at the accelerated speed of business.”

Granted, savvy senior executives within numerous multinational companies across the globe have already embraced the open way, and others will surely follow. Why would any forward-thinking CEO settle for the constraints of a legacy organisation model, when the modern alternative is so much more rewarding?

Furthermore, when given the choice of an open business technology architecture that’s designed for the 21st century, is there any logical reason to accept the apparent limitations of an underlying IT infrastructure that was conceived in a bygone era of the post-industrial society?

How do you rationalise an ongoing investment in a legacy IT platform that has inherent high-cost software license handicaps and built-in undesirable technical limitations that severely impact both the ROI and operational performance?

My point: don’t let your prior sunk IT investments sink your future open cloud options.

Cloud computing platform trends

Cloud computing infrastructure assets are a key foundation for enabling strategic digital business transformation projects. It’s the essential platform that positively impacts all emerging areas of IT service design, development and consumption. It also provides the basis for many of today’s emerging big data, enterprise mobility and social commerce solutions.

International Data Corporation (IDC) predicts the number of new cloud-based solutions will triple in the next four to five years. They’ve examined the current status of cloud computing deployment in several vertical industries, and have unveiled the first of four special reports on this topic.

Their latest global market study identifies industry-specific drivers and barriers of using cloud computing technology and presents insights in terms of how to leverage cloud computing to create new commercial value.

According to the IDC assessment, industry-specific cloud-native applications will be a driving force, as perceptive CIOs look for solutions that can be easily configured to their unique digital business and vertical industry requirements.

Moreover, IDC believes that more organisations – across industries – will shift steadily toward enlightened cloud-first strategies to enable digital business transformation goals and objectives.

Key findings from the IDC report include:

• IDC predicts that public cloud computing will reach almost $70 billion in 2015 worldwide, with the top 5 verticals (discrete manufacturing, banking, professional services, process manufacturing, and retail) accounting for approximately 45 percent of the total spend for the market.
• The major opportunities for cloud within verticals come from the development of intelligent industry solutions, which are built on top of a new platform that includes cloud as well as big data and analytics, mobile, and social.
• Those IT suppliers that showcase the long-term benefits and the true value of the cloud as a platform in a given vertical (e.g., efficiency gains in business processes and improvement in customer acquisition/customer experience) will be most successful.
• The ease of purchasing cloud-based solutions has helped transfer buying power from IT to functional lines of business like marketing, finance, and operations.
• Security and regulatory remains the biggest barrier for cloud adoption across industries like government and financial services, while loss of perceived control over IT assets and massive legacy systems are also stumbling blocks for using cloud offerings.

“The technological innovations and enabling capabilities unleashed by cloud computing have fostered new opportunities across the industries,” says Eileen Smith, program manager at IDC.

Besides, IDC asserts that cloud services will remain the essential foundation of the what they call the “3rd Platform” of growth. IDC also predicts there will be more industry-specific cloud service platforms and marketplaces that are hosted by the recognized forward-looking leaders in each vertical industry.

Each of these pioneering organisations will be seeking to establish an Open Community of independent software application developers that will introduce contemporary thinking about new business model possibilities and thereby create valuable digital service innovations.

Smith concludes, “We have already seen such platforms and innovation communities in place in retail, financial services, media, and other industries. This will reshape not only how companies operate their IT but also how they compete in their own industry.”

It’s imperative that CIOs choose to develop strong customer-partner relationships with the authentic open cloud platform vendors, in order to fully seize the nascent market opportunities. The key take-away – beware of the Faux-Open evangelists that insult your intelligence by suggesting that burying a cloud-native application within a proprietary legacy IT platform is good enough.

It’s not acceptable, to the modern CIO or their key internal stakeholders. Informed line of business leaders know that they deserve a real open cloud solution that meets all their requirements. Anything less is an unnecessary compromise that will inhibit the achievement of their strategic business outcome objectives.