Mike Sheldon
President and CEO

Transforming IT in 2015 and Beyond

Transforming IT

This year will hold several opportunities for IT organizations to both elevate their roles and transform the bottom line. Here are my top three insights to help IT organizations this year:

  1. Shake the status quo—pioneer a new angle in the world of buzzphrases like “Internet of Things” and “software-defined anything.”
  2. Differentiate your strategies and spending—invest in innovation while cutting Capex and Opex wherever possible.
  3. Make security a bigger priority—don’t become the next hack headline.

1.  Shake the status quo

At the recent Gartner Data Center, Infrastructure and Operations Management conference, we spoke about our market outlook with CIOs and analysts, and there was a lot of discussion around “big market movers,” like web-scale IT, cloud, mobility, and BYOD. Companies need to strategize how they will adapt to these changes or risk becoming stagnant, or worse, irrelevant.

As of now, the status quo in IT departments is significant vendor lock-in, and with this lock-in comes scare tactics like frequent, forced upgrades, the inability to switch vendors for a hybrid solution, and fear of losing support. We’re seeing companies like Arista and VMware challenging this status quo by refuting the idea that all equipment should be treated the same. Arista is developing their SDN platform that can be used on different brands hardware without a stagnant vendor.

As companies adapt to the rollout of new digital technologies they’re going to have to challenge the vendor lock-in by demanding more flexibility from their equipment vendors. It’s going to be crucial to develop an IT roadmap based on this idea: save your efforts for mission-critical, core innovation, and sweat your assets on edge equipment.  The tech innovators who are developing open solutions that seamlessly integrate with existing platforms are the ones that will erode the market share from stagnant OEM’s.

2. Differentiate strategies and spending

This year, IT budgets will remain under constant pressure, and it will become imperative to differentiate between what drives innovation vs. simply keeping the lights on. When it comes to budgeting for innovation, the most effective question to ask is: Where can we actually, noticeably benefit from making huge changes to the network?

We are entering an era of differentiated IT spending, and to accommodate these changes, businesses need to save money on hardware that is non-essential, and invest in only what will move the ball forward. Gartner refers to this as “Bimodal IT,” which they believe is the key to success in meeting new digital challenges. According to the 2015 Gartner CIO Agenda Report, 45% of CIOs state they currently have a second, fast mode of operation. Gartner believes that by 2017 75% of organizations will have bimodal capability.

If you can’t tie a business benefit to an investment/upgrade, then it’s not a strategic investment. A decade ago, we could build a strong business case for upgrading from a 56K modem to an Ethernet or Fast Ethernet switch. Now, what argument do you have to move from one GigE switch to another if the first one is operationally sound? If you extend the life of the equipment or “sweat your assets,” as we say, capital costs can be reduced dramatically.

Additionally, with the growth in digital technologies, companies will have to worry about increasing complications—having an IT person at each location to manage and maintain new tech. However, in the rest of 2015, we’ll start to see more companies realize that there are major Opex cost savings and better business outcomes by outsourcing this requirement.

3.  Make security a bigger priority

CIOs will need to focus more on security this year.  As Businessweek reported on the lessons from the Sony hack, we are grappling with the state of digital insecurity. While Sony’s is the most recent, the list of security breaches this past year is filled with household names, including Target, Home Depot and JP Morgan Chase, the nation’s largest bank. Having worked in an investment bank, I can only imagine the ripple effect the Chase security breach caused throughout the organization.

Anyone who thinks having a firewall is sufficient will likely join their colleagues from the aforementioned companies in their quest for new jobs. Security is a pervasive problem that needs a lot more attention across IT and business levels. There’s simply too much at stake.

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