This is a two part blog article. The first part, published earlier, reviewed the predictions we made for 2015 and the second part, below, focuses on outlook for 2016 and for the longer term (2017 - 2020).
Top 10 Predictions for Year 2016
1. 2016 will see even more intense emphasis on “CIA-Plus”
IT Suppliers will begin to align their offerings with Cloud, IoT, and/or Analytics; products that do not address end-user needs in these areas will be positioned as infrastructure and integration services needed to capitalize on these technologies. This trend, like hybrid IT, will continue into 2017. In 2016, Cloud and Analytics will remain among the top five IT priorities of SMBs and midmarket businesses. IoT will inch its way up into the priority list, though adoption will remain limited.
2. Rise of IoT will be constrained by a lack of real-world examples
From a buy-side perspective, the rise of IoT will need to be fueled by real-world examples showing the benefits of automating tasks and processes within IT and in other sectors. Within the SMB community, we expect sporadic implementation and a lack of concerted effort towards creation of IoT strategy, even though IT suppliers will continue to push forward their solutions hoping to remain top-of-mind in order to claim leadership in this emerging space. Each IT supplier will create its own solution set causing decision and adoption inertia, despite the wave of innovation that we expect to see emerge from the smaller & more agile IoT providers that are able to more easily align IT expertise with real life solutions. Experienced consultants and system integrators in particular will hold sway in matching SMB adopters with suppliers.
3. IoT supplier success will be determined by ecosystem management
On the sell side, the rise of IoT will be accompanied by an intense wave of interest in ecosystem management. It is difficult to buy or sell a “box of IoT”, though providers will claim to provide complete solutions. Parenthetically, this constraint is not limited to IoT. While it is possible to sell a “box of cloud” under the right circumstances, only AWS really manages to do so. And while one can sell a “box of analytics”, the boxes themselves come in a lot of different shapes and sizes. To meet SMB and enterprise buy-side demand for IoT, sellers will assemble coalitions that provide the many products and services that comprise an IoT solution. This will make alliance management a key success factor in the marketplace. The last time alliances determined market leadership; SAP became the global standard in ERP. Niche value added reseller may find a new source of success in IoT.
4. Business transformation will continue to elude analytics users
Analytics users will find that they are not achieving the expected benefits, prompting divergent responses. Some SMBs will find that analytics has not been transformative, and will blame the technology; others will look to move past descriptive and diagnostic views, piloting predictive or prescriptive initiatives. One of these responses is clearly more sensible than the other, but that does not mean it will be universal, at least in 2016. Focus on visualization will increase (mine is better than yours), on how the technology can solve business issues and challenges for SMBs and midmarket customers. Simplified implementation of customer and social analytics will be key drivers of adoption.
5. “Hybrid” will be used more often in conjunction with “IT” than “cloud”
User organizations will accept the notion that their focus on cloud needs to evolve into a focus on hybrid IT, as firms realize that their platforms and management scope must encompass on and off-premise systems. Truthfully, there is still a lot of work to do in cloud adoption. But the nature of the discussion has changed from “what and how do we move to the cloud?” to “what do we do to build an integrated, manageable infrastructure?” In 2016, there will likely no longer be an infrastructure debate about use of cloud, but there will be an important emerging discussion around managing hybrid IT.
6. Collaboration will drive “silo” to the realm of four-letter words
Anywhere, anytime also means any type of collaboration. SMB & midmarket businesses will look for unified shared workspaces that allow employees to enter into the workspace from any entry point to work together, collaborate and interact. Collaboration solutions cannot be deployed on stand-alone platforms – they need to be viewed as a framework for integrating multiple capabilities, native to multiple applications.
7. Integrated security will be recognized as important to business competitiveness
In 2015, we (correctly) saw security solutions connecting and overlapping in ways that do not leave vulnerabilities. In 2016, we expect to see security viewed increasingly as a business enablement platform, rather than strictly as a technology solution. Security needs to be a core consideration in application deployment, designed to prevent exploits from outside or inside the organization. In particular, data that is tagged as high-priority will be encrypted to protect against network intrusion and against risk associated with poorly-secured endpoint devices on one hand and from employee mistakes or malfeasance on the other.
8. Enablement will become the key constraint in the SMB channel
Migration to advanced technologies such as cloud and analytics, which require sophisticated deployment capabilities and often new recurring-revenue-based sales models, has left the traditional channel behind. Vendors are “helping” partners to build the capabilities needed to participate in the growth segments of the IT industry, but their methods are unsurprisingly designed to align the channel with a particular product set. This has the net effect of converting resellers/integrators/consultants into sales agents – which erodes the channel’s basic position as a trusted advisor. There is not a lot of current appetite for vendor-neutral enablement, but there is a great deal of need for it. Will we see it in 2016? Perhaps not, but we may see some initial activity in areas like IoT that are heavily dependent on the creation of multi-vendor solutions.
9. Digital business will be the goal, but goalposts will keep moving
SMBs and midmarket businesses will accelerate movement towards true digitization and will be more nimble in their trajectory than enterprises; however, they will suffer from lack of direction, skills and investments from senior management rather than lack of IT enthusiasm. In a hyper-competitive world, SMBs will finally realize the value of omni-channel customer and will focus on customer service using automated solutions in a multi-channel setting.
10. Cognitive computing will challenge the developer community
2016 will be the year that the developer community takes a serious and advanced look at cognitive computing by combining the process and data from cloud, IoT and analytics “the CIA-plus”. To be fair, we can also foresee that when we review our predictions at the end of 2016, cognitive computing itself will land in the “in progress, not complete” variety. But the prediction here isn’t that the developer community will master cognitive computing, but rather, that it will begin to seriously address the issues that it raises.
Things we will not see in 2016, but wish we would
IT migration from managing “stuff” to managing relationships
Why do we want it? Since outcomes are more important than the components used to build systems that support them, we would like to see better alignment between IT attention and business benefit. Why won’t we get it now? Human inertia, fear of the unknown and a lack of management skills will delay a needed transition.
Reconnection of IT and business systems
Why is it important? Greater awareness of the interdependence of IT infrastructure and business applications is needed to enhance productivity of the SMB user organization as a whole. Why isn’t it going to happen immediately? Credit card cloud procurement, combined with business impatience for instant-on resources are likely to continue to be at odds with IT priorities, namely security and control.
A refocus on improving the data center’s environmental specs
Despite years of education provided by industry groups such as the Green Grid and the development of products designed to improve energy performance, efficiency is still viewed largely as the enemy of uptime. Focus on drawing these two measures together, and on transition to sourcing data center energy from renewable resources is a desirable goal that remains in the hands of the hyperscale facilities, rather than a broad adoption trend. Discovery of cheap, less carbon intense natural gas repositories is likely to disincent facilities operators from introducing change in the near term.
The longer-term outlook
Now that we have covered what will and will not happen in 2016, what are the key longer-term planning assumptions? Here are some that you can use to help guide strategic initiatives:
2017: A new attitude and culture that values and uses data visualization as the quickest way to gauge overall performance and specific areas of interest at a glance will become prevalent.
2018: Graphene becomes the word of the day, as manufacturers of portable and especially wearable devices look for ways to build devices with entirely new characteristics and profiles.
2017-2018: The growing reliance on industry evolution through IT will continue apace, with the automotive sector building “connected car” systems rather than discrete vehicles, and digitization of sectors such as healthcare, resource extraction and retail leading the way.
2019: Overall B2B spending on XaaS will surpass overall spending on physical IT goods in the US.
2020: Key Performance Indicators (KPIs) will be a standard part of application architectures as will a meta-directory of KPIs that all applications can access. It will be possible to measure and optimize for elusive objectives like Return on Marketing Investment, Optimal Pricing, Cost of Acquisition and Lifetime Customer Value
2020: Data will be collected from all applications and broken into several areas: for people, productivity will be monitored through activity and results (as it already is in the new generation of SaaS applications), and effectiveness of software and equipment will be measured through algorithms that follow click paths, analyze application usage, optimize the process flow and usability of the systems.
2020: Robotics will begin its migration from the plant floor in sophisticated manufacturing applications into new process areas through experimentation with broader development of smaller, simpler, purpose-built devices.
2020: Advances in 3D printing technologies that allow use of a broader range of printing materials will launch the beginning of a shift of 3D from hobbyist or niche applications such as engineering and architecture to digital disintermediation of logistics and physical manufacturing at scale.