So much happened in 2014, and as the New Year begins, I’m looking forward to finding out what 2015 holds—both from a market and an industry perspective. One thing is for certain: the rapid changes we have seen in our industry will continue into the New Year. In fact, the pace of change is likely to accelerate.
I believe the following key trends will be shaping the IT landscape of 2015:
- Increased application focus
- Continued movement from CapEx to OpEx models (embracing “x-as-a-Service”)
- Heightened focus on accurate measurement of the cost-of-IT
Let’s explore these trends in a little more detail.
All throughout 2014 I have been hearing clients say: “it’s all about the application.” In the face of global competition and with the rise of disruptive startups testing the old school business models, the lines of business are seeking innovation, market differentiation, and quick response to changing market dynamics. They are driving IT—and all too frequently looking outside, to cloud-based solutions— to enable quick response to these dynamic changes, often at a lower entry cost.
In 2015, lines of business will prioritize and focus on the business applications that will support the goal of serving, winning, and retaining customers. Application portfolios will change to hybrid architectures that increasingly leverage x-as-a-service models. Supporting platform decisions (such as infrastructure and cloud) will be made based on application decisions. IT professionals will need to stay on top of evolving business applications in order to more effectively support the demands of the lines of business.
Moving from CapEx to OpEx
The appetite to consume anything-as-a-service from external providers has grown throughout 2014, and is now significantly shifting the IT funding model from three- to five-year CapEx investments to OpEx-based consumption models. This shift will accelerate in 2015, and will often be tied to shorter contract periods, with an increased focus on cost and an expectation of a continued improvement on cost-to-serve.
What is driving this change is a general acceptance by mainstream enterprise businesses and different levels of government (through policy changes) that cloud-based services make economic sense, combined with the fact that the business risk of consuming these services has decreased.
Accurate Measurement of the Cost-of-IT
With the shift from CapEx to OpEx models and the focus on the business value of the application lifecycle, the CIO will be under even more pressure to show value back to the lines of business. In 2015, with these new dynamics, and with IT moving to become a full broker of services or portfolio manager (for both internal and external services) delivering x-as-a-service capabilities, this change will demand a greater level of granular and real-time financial reporting at a service level for the consuming lines of business.
This increased financial awareness will provide the ability for IT to show value, offer apples-to-apples comparison between internal IT and external services, as well as comparison between suppliers.
In addition to the cost transparency measures, I believe we will also see an aggressive focus on driving down operational costs to allow the savings to be targeted at next-generation business applications.
Ready for 2015
Let’s face it — change is a given, and 2015 will be no exception for IT. Forward-thinking IT leaders will get ready to deliver applications that meet the dynamic demands of the business; x-as-a-service offerings that meet or exceed end-user requirements; and financial reporting capabilities that not only show end users what they’re paying for but also enable IT to quantify its value.
Craig Dobson is Senior Director of VMware Technical Services for the Asia Pacific region and is based in Sydney.