With half the year gone, Gartner just revised its 2017 worldwide IT spending projection up 1 percent to 2.4 percent. That may not sound like a lot, but last year’s IT spending growth was effectively flat at 0.3 percent. It isn’t just the uptick in the overall spending level that’s interesting, it’s how Gartner predicts the money is being spent. It sees the move to digital business and the related adoption of new technologies such as internet of things (IoT), blockchain and smart machines as a growth engine that’s creating new potential reasons for spending.
“Digital business is having a profound effect on the way business is done,” said John-David Lovelock, vice president and analyst at Gartner. “The impact of digital business is giving rise to new categories; for example, the convergence of ‘software plus services plus intellectual property.’ These next-generation offerings are fueled by business and technology platforms that will be the driver for new categories of spending. Industry-specific disruptive technologies include the internet of things in manufacturing, blockchain in financial services (and other industries), and smart machines in retail. The focus is on how technology is disrupting and enabling business.”
Worldwide, Gartner is forecasting that the enterprise software market will be the highest growth segment of IT spending—7.6 percent growth in 2017 from 5.3 percent in 2016. (Device spending is also up markedly in the report.) Enterprise software will be one of the keys to driving and controlling revenues derived from digital business advances.
Takeaways for senior IT leaders: Digital disruption is the probable stick slowly driving the adoption of digital business. The carrot is innovation. This is putting it too simply, but it’s true: Disrupt or be disrupted. And just because many of the high-profile digital disruptions have been business-to-consumer, don’t think you’re safe in the business-to-business sector, either. As this plays out, probably over the next five to 10 years, a lot more companies are going to be burned and a lot more companies are going to be made. You can no longer laugh this off as a buzzword.
It starts with analytics, preferably sifting through meaningful big data. Digital business is rewriting business process and the way data is collected, interpreted, moved and consumed in profound ways. That could make your analytics easier to implement and analyze. But if you don’t have a major business analytics upgrade just rolling out, you’re flying blind.
Ride the wave, but as you adopt new cloud-based services and enterprises apps, there’s a potential for management complexity to trip you up.
“With the increased adoption of SaaS-based enterprise applications, there also comes an increase in acceptance of IT operations management tools that are also delivered from the cloud,” said Lovelock. “These cloud-based tools allow infrastructure and operations organizations to more rapidly add functionality and adopt newer technologies to help them manage faster application release cycles. If the I&O (infrastructure and operations) team does not monitor and track the rapidly changing environment, it risks infrastructure and application service degradation, which ultimately impacts the end-user experience and can have financial as well as brand repercussions.”