July 10, 2017
Four key takeaways you need to know from the IDC Directions 2017 event
The IDC Directions 2017 conference wrapped in Santa Clara, California with a clear message to corporations big and small: the digital transformation of business is on. You can’t afford to sit on the sidelines while your competitors march ahead and your customer base is drained.
Each and every company needs to start seeing itself as a technology company.
Digital transformation (DX as per the conference) came under a sharp spotlight during the keynote address by Senior Vice President and Chief Analyst Frank Gens, which was titled 'The Dawn of the DX economy and the new tech industry.'
According to Gens, the Four Pillars of the DX economy are:
Those pillars are driven by the Innovation Accelerators, namely:
Gens explained how these new technologies are 'the raw materials for innovators who are trying to build new things', and are going to profoundly change the world in which we live and work over the next decade.
The impact of DX is already being felt.
In 2019, which is just around the corner, the IDC predicts that customers will spend over $2 trillion to transform and implement digital transformation. By 2025, the global economy and the digital economy will be virtually indistinguishable from each other; one and the same.
With these dates and figures in mind, what are the DX fundamentals to enable an organization’s speed and the scale of innovation to thrive in a competitive marketplace?
Watch the keynote address from Directions 2017:
In only three years’ time, over two-thirds of all enterprise infrastructure and software expenses will be for cloud-based offerings.
And the reason that is not even higher is due to the fact that it's difficult to move everything to the Cloud, as there are many legacy systems still in place.
By 2020, the Cloud will be the most trusted place in the digital economy. - Frank Gens
The reason that over 70% of CIOs now have a cloud-first strategy? The business agility that the cloud provides, and the fact that it's a launchpad for business innovation.
Although the Cloud may seem like it's static and has reached maturity, in fact there will be a second wave of cloud technology (Cloud 2.0) that will make it even simpler and more secure to use than ever before.
On the other end of the Cloud are the connected things.
According to Gens,
"We are seeing an incredible 'speciation', almost a Cambrian explosion, of diversity in terms of what devices can be connected to the edge of these digital networks."
The sheer range and number of connected devices is exploding exponentially, and we are likely to feel the impact in everyday life more and more. From prosthetics to smart signs, home assistants to cars, 15 billion devices were connected last year and conservative estimates put the number at 80 billion by 2025.
The IoT space is a very industry-specific, verticalized space. In every single industry you can imagine, IoT strategies are being thought out and implemented specific to that industry.
"This is where innovation is going to happen. If you are intending to be a player in this digital economy and you aren't either delivering parts of it, or building it, or helping others to use it, then you are just a non-player in the digital economy."
Creating great tools and innovating are essential to the digital economy, of course.
But getting them to the customer and solving the 'last mile' problem are as difficult as they have always been.
The world defined by the Cloud needs effective channels for customers to consume goods and services. In the Cloud, a channel could be your website or other third party digital storefronts to deliver your offerings. You may have a network of resellers to move product and leverage your brand.
Most likely it’s a combination so your business isn’t single threaded—plan for speed and scale.
Large organizations such as Amazon, Salesforce, and Google are the digital crossroads for their entire industry. Your organization should aspire to build a large ecosystem and own a beachhead.
"Building an industry platform is a superpower position to be in, in any industry."
How are they doing this?
By collecting data for their industry, by providing apps and services, and by creating a marketplace by inviting in other players to build on their platforms.
For the platforms and communities that are successful, the opportunities are limitless. Almost everyone in an industry will be plugging into one or more platforms to get to market.
That's the primary reason why IDC predicts that 75% of the Global 500 companies will be "suppliers of digital services through Industry Collaborative Clouds."
Ultimately, what the Directions 2017 conference emphasized over and over again is that almost every single company is becoming a tech company in varying degrees to survive in the new digital age.
If they're not delivering from the Cloud, developing apps, services, or platforms, then very often they're buying startups who are in the tech game and having them apply their skills to a particular marketplace.
That's the reason why a traditional company like Campbell's Soup buys a startup called Habit: they don't only want to sell soup, now they want to create lifestyle products and nutrition plans for their customers.
"Companies are looking to deliver experiences in the digital economy, not just products."
The conference suggested that all of us need to look closely at what space we want to occupy in the digital economy, find out what our customers want, and figure out quickly how we are going to get there.
Digital transformatin doesn’t just happen organically. It requires a combination of sophisticated
solutions, business process acumen and real-world experience. Delivering that combination of capabilities is best achieved by collaborating with a competent technology partner like AI Foundry.
Learn more about AI Foundry's Agile Solutions and the 6 pillars to Actionable Intelligence.