Enterprise IT in 2014: Follow the Money

IBM Cloud Computing

Readers of this column, exposed to heavy coverage of consumer tech conferences like CES, Mobile World Congress and SXSW, might mistake IT as consumer driven. The reality is quite different. Enterprise IT accounts for nearly 90% of annual technology spend. As the Bull Market on Wall Street marks its fifth anniversary and the US economy is projected to grow at its fastest pace since 2005, Enterprise IT budgets are soaring. In 2014, expect to see IT budgets migrate toward IMPLEMENTATION, across three key dimensions:

  • Cloud services transform the role of IT departments
  • BYOD (Bring Your Own Device)
  • Hybrid Clouds and Software Defined Networking rapidly adopted

“The overarching theme of 2014 in IT technology”, according to Marc Einstein, Industry Principal ICT for Frost & Sullivan, “will be how cloud services are transforming IT into a proactive, agile and efficient part of an organization as opposed to people who just keep PCs and the Internet working.  While this theme has been touted for many years, actual implementations are making this a reality as companies strive to emulate industry leaders such as Amazon Web Services and VMWare. 2014 will also see software defined elements of the network come to the forefront as moving away from hardware allows cost savings in energy utilization and network traffic shaping to deal with asynchronous traffic.  Ultimately these innovations will lead to a new role for the modern IT department.  By 2020 I expect the industry standard will be nearly all enterprise functionality housed in the cloud.”

Cloud Services: The Cloud has transformed the fundamental role of the IT department from business enabler to business innovator. Vendors that can enable IT Managers to assess risk, manage large data sets and analyze processes will be rewarded handsomely. In 2014, expect to see widespread implementation by IT departments of Platform (PaaS), Infrastructure (IaaS) and Software (SaaS) as a Service tools for scalable and cost-effective services. Just as Big Data and the Cloud transformed the role of the CMO (average CMO tenure has doubled since 2006), the Cloud is inherently reshaping the role of the IT Manager within the organization.

Changing Role of IT

 

 

BYOD (Bring Your Own Device): BYOD, whereby Employees use their own preferred handsets, tablets or laptops, is now the norm. According to Frost & Sullivan, 70% of Enterprises offer some degree of BYOD, helping to cut mobility expenses. IT departments will invest heavily this year to guarantee secure connections for all Employee devices and ensure mobile device security.

 

BYOD Adoption Survey_July 2013

 

Rise of the Hybrid Cloud and Software Defined Networks: Currently, IT Departments generally use either a Public cloud (such as Amazon Web Services), or their own private, protected cloud. Security concerns will ensure that private clouds will still be the most commonly deployed solution but 2014 will be the year when hybrid clouds come to the forefront.

 

Public vs Private Cloud Adoption

 

 

Finally, look for Software Defined Networking to gain momentum in 2014 as Big Data creates a need for centralized and more cost-effective traffic shaping. Shifting from software based capabilities will reshape the IT department as hardware specialists will be consultants rather than in-house resources, and most network functions will be able to be managed off-site

 

Asynchronous Data Traffic

 

 

 

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Levi Shapiro

Managing Partner at JIMMI Fund
Levi Shapiro is the Managing Partner at the JIMMI Fund, a corporate venture investment fund, and concurrently Partner at TMT Strategic Advisors. He is also the organizer of Marketing & Ad:Tech Israel (www.adtechsummit.com), Israel's largest conference for digital advertising.

During a 20 year career inmedia and technology, including 7 years in Asia, Levi launched new business units(IBM), new products (Toyota) and new startups (TwoMinute Television, Snack Mobile, etc).

He teaches Entrepreneurship and Mobile Marketing as an Adjunct Professor at IDC Herzliya, serves as Mentor in Residence for The Hive accelerator and writes a bi-weekly column about digital media and technology in the Jerusalem Post called "Unleavened Media ".

Mr. Shapiro is a graduate of Tulane (BA), Cornell (Asian Studies) and MIT (MBA)
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  1. Your article sheds an interesting light on how cloud services have become crucial to the innovative and effective capabilities of enterprises nowadays, especially with the plethora of mobile devices that enterprises are increasingly utilising to cut mobility expenses.

    Personally, I feel that these technological trends are especially significant for e-Commerce vendors in gaining maximised efficiency in balancing their offline administrations and online product services. BYOB is a concept that is highly relatable to vendors who are constantly on the move whilst engaging with suppliers. Relatedly, TradeGecko (http://tradegecko.com) has recognised this need and implemented a mobile App to allow its merchants to access inventory data on the go.