Analysts Examine the Next Evolution of Digital Business during Gartner Symposium/ITxpo 2016, October 16-20, in Orlando
Global IT Spending Projected to Grow 2.9 Percent in 2017
Bangalore, India, October 18th, 2016 — A new type of infrastructure needs to be built that is not just going to reshape business, but also the way people live, according to Gartner, Inc. CIOs are the builders of this infrastructure, which Gartner calls the “civilization infrastructure”.
Gartner forecasts worldwide IT spending to total $3.4 trillion in 2016, a 0.3 percent decline from last year. In 2017, global IT spending is projected to grow 2.9 percent and reach $3.5 trillion. Analysts said this growth will be driven by the software and IT services segments. Worldwide spending on software is projected to grow 7.2 percent, and IT services 4.8 percent. Software and IT services will be key to the development of the civilization infrastructure.
Peter Sondergaard, Senior Vice President and Global Head of Research, explained today to an audience of more than 8,000 CIOs and IT leaders at the sold out Gartner Symposium/ITxpo, said that this civilization infrastructure will be the most important thing IT accomplishes in the next decade.
“Civilization infrastructure will forever change the way people engage socially, digitally, and physically through connected sensors and digital intelligence,” Mr. Sondergaard said.
“CIOs will participate in the building of a new digital platform with intelligence at the center,” Mr. Sondergaard said. “That platform will enable ecosystems, connecting businesses and collapsing industries. It will change society itself, and the way people live.”
This civilization infrastructure will be a new digital platform that extends beyond traditional IT infrastructure using new technologies not familiar to the typical IT department. “Your new digital platform will allow you to participate in the evolving world of business, government, and consumer ecosystems because ecosystems are the next evolution for digital. It’s how you compete at scale,” Mr. Sondergaard said.
The new digital platform consists of five domains: traditional IT systems, customer experience, The Internet of Things (IoT), intelligence and the ecosystem foundation.
“Each of these domains are interconnected and interdependent. All have a role, and all are required,” Mr. Sondergaard said. “Your new digital platform will allow you to participate in the evolving world of business, government, and consumer ecosystems. Because ecosystems are the next evolution for digital. It’s how you compete at scale.”
Further insight into the five elements of the new digital platform include:
Traditional core IT systems: This is how CIOs run and scale operations. It’s building on what’s already been built. It’s taking high performing traditional IT systems (such as the data centers and networks) and modernizing them to be part of the digital platform.
For example, leading organizations are halfway through the transition to the cloud. It started with Sales and Marketing, and now half of sales-support capabilities are in the cloud. This migration will continue through the end of the decade into functions such as HR, procurement and financial management.
“You now need to make cloud, mobile, social and data your core capabilities while investing in resilience, business continuity and disaster recovery, inside and outside in a hybrid approach,” Mr. Sondergaard said.
Customer experience: This is how CIOs connect and engage in new ways. The digital customer experience may be the only one that the customers have. This is how the business engages in the digital world. The pioneers are exploring how new experiences such as virtual and augmented reality will change the way customers engage.
“In the world of chatbots and virtual personal assistants (VPAs), your mobile apps, and even your web presence, will be much less relevant,” Mr. Sondergaard said. “The new competitive differentiator is understanding the customer’s intent through advanced algorithms and artificial intelligence. Creating new experiences that solve problems customers didn’t realize they had.”
The Internet of Things (IoT): This is how the organization senses and acts in the physical world. Adding devices to the IoT domain is the easy part. Processes, workflows, and data integration are much harder. In fact, two-third of organizations have had to rework their existing IT systems to accommodate IoT.
IoT also changes how CIOs should invest in analytics because decisions must move from days to minutes to instant. CIOs should plan to shift their investments in analytics to real-time. Real-time analytics will outpace traditional analytics by a factor of three by 2020 to become 30 percent of the market.
Intelligence: This is how the systems analyze, learn and decide independently. CIOs start with traditional data management, data science and data intelligence. Algorithms determine the action. The new type of intelligence, driven by machine learning is artificial intelligence.
“We are building machines that learn from experience and produce outcomes their designers did not explicitly envision. Systems that can experience and adapt to the world via the data they collect,” Mr. Sondergaard said. “Machine learning and artificial intelligence move at the speed of data, not at the speed of code releases. Information is the new code base.”
Ecosystem Foundation: This is how the enterprise interacts as an institution in the digital world. Ecosystems go beyond the capability to decide, CIOs need to build the capability to interact with customers, partners, adjacent industries, even your competitors. The ecosystems allow transformation from traditional business with linear value supply chains to networked digital ecosystem businesses.
“Many industry models will transform with digital ecosystems. Moving from simple relationships run by intermediaries toward distributed partnerships managed by a shared distributed ledger system like blockchain,” Mr. Sondergaard said. “Building a strong ecosystem will help you manage the transition. Ecosystems are the future of digital.”
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