Research house International Data Corporation (IDC) has just announced its top 10 IT industry predictions for 2017 and beyond—and we couldn’t agree more with the list’s laser focus on digital transformation.
In the press release, Frank Gens, senior vice president and chief analyst at IDC, notes that “We are at an inflection point as digital transformation (DX) efforts shift from ‘project’ or ‘initiative’ status to strategic business imperative. Every (growing) enterprise, regardless of age or industry, must become ‘digital native’ in the way its executives and employees think, what they produce, and how they operate.”
As we like to say at New Relic, every company is a software company. Or as U.C. Irvine professor and founding director of the Center for Digital Transformation Vijay Gurbaxani wrote in the Harvard Business Review earlier this year, “The current business environment requires all leaders to view their companies as software businesses—and think like software executives.”
Top of the top 10
So we decided to highlight four of IDCs predictions that particularly resonated with us:
IDC Prediction #1: By 2020, 50% of the Global 2000 will see the majority of their business depend on their ability to create digitally enhanced products, services, and experiences.
Agreed! As we note in our recent ebook, The Digital Business Breakthrough, digital experiences are increasingly how companies engage with their customers. And we’re not talking just about digital-only brands, but all kinds of companies, from banks to retailers, donut shops to automotive manufacturers. Even traditional business-to-business industries such as suppliers of construction materials are transforming the buyer’s journey into a digital path.
IDC Prediction #3. By 2020, 67% of all enterprise IT infrastructure and software spending will be for cloud-based offerings.
As our Principal Cloud Architect Lee Atchison notes, “Over the next few years, as companies provide more digitally enhanced products delivered via the cloud, enterprises will shift from the cloud being simply part of their IT infrastructure to the cloud being core to that infrastructure, and thus to their business operations and business success.” Leveraging the cloud makes it vastly easier to scale your infrastructure to deal with peak demands, but to make your cloud efforts successful, you need full-stack visibility into your IT infrastructure, whether it’s in the cloud or on premise.
IDC Prediction #7. By the end of 2017, over 70% of the Global 500 will have dedicated digital transformation/innovation teams.
At New Relic, we know that creating great digital experiences is a team sport. To deliver a first-class digital customer experience you need more than brilliant software developers. You need attention and expertise from multiple disciplines across the entire company—marketing, sales, application owners, product managers, developers, operations, designers, customer care, and executives. Devs need to know about errors and bottlenecks, for example, while ops wants to track whether app updates break essential processes. Similarly, product managers care about which features are being used most, while sales and marketing obsess over conversion rates. To make sure everyone is on the same page, they all need to be looking at the same data.
IDC Prediction #9. By 2020, all enterprises’ performance will be measured by a demanding new set of DX-driven benchmarks, requiring 20-100% or better business performance.
Measurement of the digital experience is where the rubber meets the road. As James Nguyen, New Relic Senior Product Marketing Manager points out, “This brave new world of digital transformation is bringing a lot of uncertainty to a lot of companies. You have to track where you are and where you’re going, or else you may end up lost along the way. How we’ve seen companies do this successfully is by gathering and sharing clear, consistent data, across a variety of different dimensions—application errors, performance, users, engagement, conversion, revenue … everything. The ability to do that will help separate the companies that perform like digital-native winners from the disrupted losers.”
To see all of IDC’s worldwide IT industry predictions, check out the firm’s press release, or get full the report, IDC FutureScape: Dawn of the DX Economy and the Digital-Native Enterprise. You can also watch a replay of IDC’s Worldwide IT Industry Predictions web conference at http://www.idc.com/events/futurescapes.