UPDATED 11:06 EDT / NOVEMBER 16 2015

NEWS

Wikibon sees software changing ground rules of business

IT organizations and the businesses they support need to work together to pilot their enterprises through the confusion of major changes rocking every boat. Established businesses are being challenged by a number of seismic shifts, including cloud computing, the huge increase in the pace of both technology and business change, open source, changing economics of technology consumption, the destruction of traditional barriers of entry and mobile computing.

At the core of these disruptive forces is software, writes Wikibon Lead Cloud Analyst Brian Gracely. The dynamics of software have changed radically in the last decade, creating a new foundation for the ways in which IT will operate moving forward and presenting both new opportunities and threats.

Software has shifted from driving business productivity to creating completely new business models. Corporate footprints that were once embodied in plants and equipment may now be little more than websites or even mobile applications. Software, cloud and mobile have shrunk the cost of creating a worldwide business. As a result, startups like Uber Inc. and Airbnb Inc. are disrupting huge, long-established organizations with no more than imagination and some software running on rented hardware on the network. CEOs spend their nights worrying about what startup will pop out of the woodwork to disrupt their business models and possibly wreck their enterprises.

Today innovation means software, often running in the cloud. That means that the pace of innovation is the speed at which new transformative software can be developed and deployed. Tesla can add self-driving capabilities to its cars or fix a problem with a software upgrade sent over the Internet, without requiring that those cars be brought into a dealership. That is revolutionizing the auto industry and possibly making the entire dealership structure obsolete, Gracely writes.

Partnerships critical

CIOs are constantly challenged to sort through all the innovation bombarding them. What new developments are strategic to their companies and what are just flashes in the pan? CIOs cannot make those decisions alone, Gracely says. Business leaders need to work closely with technologists to combine business and technical visions. Software is central to business differentiation, requiring tight alignment between business and technology leaders in how strategic planning is executed. Business-led projects going forward will almost all be technology-centric. Success will be determined by the speed at which business ideas can be translated into business execution, and that will usually be determined by which companies successfully leverage software to turn ideas into reality.

CIOs have consistently ranked hybrid cloud as their first or second most important implementation priority in recent years. Hybrid Cloud discussions are really about software, not clouds, says Gracely. CIOs have to balance their investment in huge portfolios of core Systems of Record while finding money to drive innovation with Systems of Intelligence. They need to make decisions such as which existing Systems of Record should stay in-house in the private cloud, which should be moved to the public cloud (an expensive transition), and which should be replaced by software-as-a-service offerings. What systems can remain on slow-moving vertically integrated stacks, and where can the agility of the modern micro-service structure provide significant business advantages?

Cloud computing is having increasing impacts on both IT organizations and vendors. CIOs can no longer watch the chessboard evolve, Gracely writes. They need to actively drive a vision, strategy and execution for their business, managing hybrid application portfolios and defining where Systems of Intelligence and Engagement can have the greatest positive impact on their business. Companies face a complex evolution that requires guidance from experts with practical experience in reducing the learning curve for these transitions, Gracely concludes.

photo credit: peasap via photopin cc

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