By Charles King, Pund-IT, Inc. August 6, 2014
The new Infrastructure Matters market research study conducted by IBM’s Institute for Business Value (in concert with Oxford Economics) offers some fascinating food for thought concerning the evolution of business information technologies (IT). The survey was completed by 750 global participants involved in their enterprise organizations’ IT infrastructure strategy and investment decisions. Nearly 2/3 of the respondents are chief technical/technology or chief information officers (CTOs/CIOs) in companies located in 18 countries and inhabiting a wide variety of industries.
In other words, while the study was clearly focused on the needs/plans of large companies (nearly 4 in 5 drive $1B or more in annual revenues), IBM was also clearly investigating issues, strategies and trends important to or common across worldwide markets and use cases. That is a critical point commercially given the company’s global focus and involvement, but it also underlines a far larger issue; increasingly ubiquitous IT.
The Evolving IT Infrastructure
Business technology is obviously evolving. Not so long ago, access to and control of IT resources were closely managed by “pocket protector” managers and staff who carefully doled out compute cycles as if they were rare and precious gems. Compare that to today’s workplace where IT underlies, inhabits and accelerates virtually every business process and function, and influences numerous critically important efforts and strategies.
In addition, employees’ attitudes toward IT have also changed fundamentally. Today everyone from entry-level knowledge workers to c-level executives handle increasingly powerful computing devices – smart phones, tablets, notebooks and desktops – constantly during the day and into the evening. In other words, rather than being a sort of techno-Latinate closed to all but the high churchmen of IT, computing has instead become a lingua franca available to virtually anyone.
Changing the Conversation
Put another way, computing has become mundane in the extreme, though as IBM’s Infrastructure Matters study illustrates, there is still room for both confusion and opportunity. That was detailed in how conversations about IT infrastructure are changing in three specific ways:
- Content – While traditional speeds/feeds issues remain important, advances in/integration of emerging technologies, including cloud, mobile, social media and business analytics are reshaping discussions.
- Participants – Once the domain of IT architects and data center leaders, continuously evolving and increasingly complex IT is now a subject of concern for business managers worried over how to keep up.
- Tone – Though IT is usually a positive business denominator, its place in the sunshine means that stumbles and pratfalls, including major system outages and data breaches, can hit the headlines and negatively impact major shareholders and senior executives.
Concerned, Yet Unprepared
How are these changes manifested in new conversations about IT? According to the IBM study, in a number of revealing dichotomies. For example, over 70% of organizations recognize that their IT infrastructures help optimize revenue and profit, and are key enablers of current/future business strategy and competitive advantage. Further, nearly a quarter believe IT enables increased efficiencies, including improved productivity and lower costs.
Yet less than 10% of respondents believe their organizations are fully prepared to address or take advantage of emerging social, cloud, mobile and business analytics trends and technologies. That seems shocking on its face, but digging beneath the surface it is even more so. For example, about a third of participants said their companies were either unprepared or only somewhat prepared to take advantage of social/collaboration platforms and mobile solutions. But four in ten held that same negative opinion for cloud computing.
Given the easy availability of collaboration, mobile and cloud services and solutions designed to benefit business, these points jump out. It also suggests that while conversations around IT infrastructure may be broadening to include new participants and issues, fundamental work in market education remains to be done.
Securing the Business
It is no surprise that participants in IBM’s study expressed concerns about the security of their IT infrastructures. After all, over the past year the news has been rife with headline stories on high-profile data breaches at leading retail outlets and evidence of espionage against private and public sector targets by increasingly sophisticated organized criminals and government entities.
In fact, more than four in ten Infrastructure Matters respondents expressed concerns about their organizations’ ability to efficiently/securely move large amounts of data (46%), develop/maintain a secure environment (43%) and cut costs/improve efficiencies of global storage environments (43%). However, while those points indicate the widespread influence of security issues and nearly half of respondents indicated concerns with specific security threats, the nature of those threats contained some surprises.
For example, the top ranked security threat noted by nearly half (48%) of respondents was rogue administrators or privileged insiders, and 41% named threats from social media as the second highest threat. Third on the list are backdoors or hidden functions in products coming from the supply chain. The three lowest ranked threats? Employee mobility/BYOD (36%), lost/stolen devices (35%) and cloud computing (30%), all of which have been targeted by vendors as key security concerns. If nothing else, these results should trigger some rethinking of security go-to-market assumptions and strategies.
The “Strategic IT Connector” Connection
One of the most interesting findings in the study was the discovery of a subset of 124 participants that IBM labeled “Strategic IT Connectors” whose responses indicated that their organizations are successfully pursuing well-considered and defined IT practices and strategies. These organizations stand in marked contrast to the 148 “Siloed IT Operators” whose answers suggest that their organizations’ efforts are on the trailing edge of IT practices and innovation.
As a group, nearly twice as many Strategic IT Connectors said their organizations are investing more than 20% of their overall IT budgets in their IT infrastructures than did Siloed IT Operators. But that higher investment also reflected notable strategic differences. While both groups designated ‘reducing infrastructure costs’ as a primary business driver, Strategic IT Connectors listed ‘achieving greater competitive differentiation’ as their second most important goal (Siloed IT Operators listed it as their #8 goal).
Also notable were the benefits Strategic IT Connectors’ organizations are achieving related to emerging cloud, mobile, social and analytics trends. In fact, they said their companies are dramatically (420%) more prepared for cloud computing than Siloed IT Operators, and also enjoy substantial or sizable leads in the other three categories.
Perhaps most importantly, Strategic IT Connectors’ organizations are also outperforming their industry peers in terms of revenue growth, profitability and net profit margins in far greater numbers than Siloed IT Operators. All this points to connections between effective, aggressive IT infrastructure investment and overall business performance.
Virtually no market survey can deliver a perfect portrait of its subject, but such research can detect important issues and trends affecting organizations and industries. That is certainly the case in IBM’s Infrastructure Matters study, which revealed a number of points that both reinforced and contradicted some points of common IT market wisdom. We were particularly surprised by the challenges many organizations appear to be facing in effectively planning for and implementing cloud solutions, and their somewhat counterintuitive concerns about security.
But we were especially struck by the substantial differences IBM found between leading edge Strategic IT Connectors and more traditional Siloed IT Operators. Not only are the former spending more on their IT infrastructures than the latter, but those efforts are delivering substantially more strategic and financial benefits.
In one sense, market research can provide a snapshot of where participants are today and where they have been in the past. But the notable success of the Strategic IT Connectors revealed in IBM’s Infrastructure Matters study also offers a clear way forward for enterprises that hope to gain greater advantages as the conversations change around their IT infrastructures and investments.
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