DIGITAL DYNAMICS - Opportunities, Alignments and The Way Forward

DIGITAL DYNAMICS OPPORTUNITIES, ALIGNMENTS AND T H E W AY F O R W A R D

The digital landscape is fast evolving. Enterprises are experimenting and innovating, new players are entering the fray and existing players are creating new products and services.

Amid such dynamism, it is essential to map the landscape holistically, from both demand and supply sides. This shall enable the enterprise users to prepare their future digital strategies and the IT players to align their marketing focus.

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DIGITAL DYNAMICS OPPORTUNITIES, ALIGNMENTS AND THE WAY FORWARD

DIGITAL DYNAMICS A RESEARCH BASED STRATEGY GUIDE FOR BUILDING A DIGITAL ENTERPRISE PUBLISHED: JUNE 2015

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DIGITAL DYNAMICS

FOREWORD

KAPIL DEV SINGH FOUNDER, COEUS AGE & PRINCIPAL ANALYST, CORE QUADRANT

D

igital Enterprise is an idea, which is fast taking wings. It is made relevant by the need for agility amid the contemporary business challenges and enabled by the advent of a plethora of digital technologies. The journey of enterprises to embrace

digital demands an all rounded focus on the competitive landscape, strategic choices, leadership competencies, process capabilities, enterprise culture and the technology platform. We believe that new research insights and management thoughts are required to successfully accomplish this all-rounded focus.

Core Quadrant, a partnership between Grey Head Media and Coeus Age, has born out of the endeavour to create the new research insights and management thoughts on digital. It started as a research study in 2013, which culminated over time into a digital enterprise framework.

The framework is now at the centre of many of our CXO interactions and a foundation for our research initiatives. Core Quadrant is today engaged in research on a wide variety of aspects related to digital landscape, both from supply and demand sides.

I am personally very delighted to see this special publication becoming a reality, which is a reflection on the depth and breadth of our understanding of the digital space. We intend to explore further with many interesting aspects of digital being researched in-depth and presented to business and technology decision makers.

I thank you for the continued support and encouragement and look forward to many insightful interactions in the future.

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DIGITAL DYNAMICS A RESEARCH BASED STRATEGY GUIDE FOR BUILDING A DIGITAL ENTERPRISE

GREY HEAD MEDIA PRIVATE LIMITED

1509 & 1510, 15th Floor, Devika Tower, Nehru Place, New Delhi- 110 019 | www.greyhead.in Editor

Rahul Neel Mani

Principal Analyst

Kapil Dev Singh

Executive Editor

Shipra Malhotra

Art & Design Printed at

Shyni G Thomson Press India Ltd. B-315, Okhla Industrial Area, Phase 1, New Delhi - 110020

CORE QUADRANT QUARTERLY Š Copyright 2015 Grey Head Media Private Limited.

All rights reserved. Reproduction in whole or in part in any form or medium without written permisison in prohibited

PAGE NUMBER

02

06

FOREWORD

KAPIL DEV SINGH FOUNDER, COEUS AGE AND PRINCIPAL ANALYST, CORE QUADRANT

PREFACE

RAHUL NEEL MANI CO-FOUNDER & EDITOR, GREY HEAD MEDIA

10 DIGITAL LANDSCAPE 2015 RESEARCH FINDINGS

12

48 51 56 60

TACKLING THE GROWTH CHALLENGE

INC: 26 INDIA WHERE ARE

THE BIG BUCKS GOING

34

FUTURE PERFECT: NEED FOR A NEW ENTERPRISE DIGITAL PLATFORM

EXPERT VIEWPOINT

THE DIGITAL ENTERPRISE: A CONTRARIAN VIEW ARUN GUPTA

EXPERT VIEWPOINT

CREATING DIGITAL BUSINESS: CHANGE MINDSET BEFORE ANYTHING HARVEY KOEPPEL

EXCLUSIVE INTERVIEW

DIGITAL DISRUPTION: CIOs CAN OUTSOURCE THE FUNDAMENTALS OF SUCCESS SUSAN CRAMM

EXPERT VIEWPOINT

CIO REVISITED: WELCOME THE NEW CIO ERIC D. BROWN

6

PREFACE

RAHUL NEEL MANI CO-FOUNDER & EDITOR, GREY HEAD MEDIA

DOING BUSINESS DIGITALLY

W

hile in the past 18 months or so, most of my conversations (with CXOs) have been very “Digital” centric, and while it is true that phrases like ‘Digital Business’, ‘Digital

Enterprise’, ‘Digital Transformation’, ‘SMAC’, etc. have caught the attention of almost every corporate executive; it is also manifested that not many have clarity on what it really takes to be digital? Some confuse it with Social Media, some with Cloud, some with Mobility or Analytics (SMAC), and the rest with a mix of everything. This proves that most of the Indian organizations are still grappling with the complexities of how to understand and make use of Digital.

By the year 2020, which is just 5 years from now, over 100 billion computing devices will connect to the Web. Businesses will have to manage 50 times the data they manage at present. Hence, SMAC (Social, Mobile, Analytics and Cloud) will have a multiplying effect on businesses and increase productivity across the organization. That’s true!

PREFACE

But, is that what we call “Being Digital”? Will it be justifiable to call an organization ‘digital-ready’ if it has one of these or a combination of these technologies deployed?

The dichotomy of prevailing thoughts, theories and opinions and counter-opinions gave birth to the idea of this book - “Digital Dynamics.” Before you read on, I want to clarify that this is a benign beginning of a very exciting journey that we’ve decided to travel – the journey to uncover every possible facet of this paradigm shift in computing that we know as ‘Digital’.

“By the year 2020 over 100 billion computing devices will connect to the Web. Businesses will have to manage 50 times the data they manage at present.”

Our tryst with the “Digital Business” or “Digital Enterprise” began when Kapil Dev Singh, the architect of this initiative, and I were brainstorming the theme for CIO Productivity Conclave – our flagship CIO summit - last year. After having explored almost all possible themes, we chose to go with Digital. The idea was not to just scratch the surface but to do deep exploration and demystify all myths, try to answer all curious questions, research all possible scenarios, understand the problems, make an attempt to create usable frameworks, and finally help the CIOs with real, actionable stuff.

In essence, this book is to assist Indian enterprises in understanding the digital conundrum and make informed choices both in terms of their strategy, and aligning with the vendors who can help them erect a robust digital enterprise.

This book is a combination of four things: • Research done with CIOs and the analysis of its massive data.

• A nalysis of vendor landscape, their platform strategies and how they are realigning themselves to tackle the growth challenges of businesses through a digital push.

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PREFACE

• Recommendations from Core Quadrant on what CIOs should do to create digital platforms.

• E xpert opinions on Digital and how the New CIO should be taking shape.

I am extremely hopeful that this research-led approach of dynamicCIO.com, facilitated by Core Quadrant, will help CIOs and their teams in understanding various facets of the Digital Enterprise/ Business. Our endeavor is not to end this exercise here. As I stated in the beginning, we are just warming up. In future, you should expect more granular, in-depth, micro-level, and comprehensive research that will take care of most of your concerns for Digital Business.

“This book is to assist Indian enterprises in understanding the digital conundrum and make informed choices both in terms of their strategy, and aligning with the vendors.”

I am privileged to have Kapil Dev Singh - the guiding force and the key resource to complete the mammoth research exercise – as the anchor of this book. His ability to look beyond the obvious has supplemented the usefulness of the contents here. My very special thanks goes out to all the CIO friends who gave us their valuable time to accomplish this mammoth task.

I am also extremely thankful to Arun Gupta, Harvey Koeppel, Susan Cramm and Eric D. Brown – doyens in their respective domains – for contributing generously for this edition.

In the end, I appeal to you to connect with us and help us make this initiative more participatory, meaningful and focused.

10

THE DIGITAL LANDSCAPE 2015 & BEYOND

THE DIGITAL LANDSCAPE 2015 & BEYOND KAPIL DEV SINGH

THE DIGITAL LANDSCAPE 2015 & BEYOND

THE PRELUDE

A

t Core Quadrant, a research initiative of Grey Head Media & Coeus Age, we understand the growing importance and relevance of digital for the businesses. We continually strive towards producing the finest original research and presenting a deep understanding on the topic of digital. The Digital Landscape2015 & Beyond is our most recent offering to help CXOs understand this fast emerging phenomenon, both from the supply and demand side perspectives of the market place.

We believe that a new market is emerging; a market that is driven by consumer empowerment, emerging

needs of enterprises to grow amid VUCA (volatility, uncertainty, complexity and ambiguity) and a tectonic shift in technology represented by the digital wave.

Based on our conversations and deliberations with industry leaders, we also believe that the pressure is equal on both the enterprise users and the producers of technology.

This special research perspective is based upon our continual research on the enterprise and the IT vendor side of the digital market. We’re delighted to present to you the findings of this research and our perspective in the following three broad sections:

1. GROWTH CHALLENGE AND THE PLATFORM AS A STRATEGY (the supply side perspective)

2. AVENUES OF INVESTMENT BY THE INDIAN ENTERPRISES (the demand side perspective)

3. GUIDELINE FOR ENTERPRISES ON BUILDING THEIR DIGITAL PLATFORMS (a recommendatory perspective)

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THE DIGITAL LANDSCAPE 2015 & BEYOND

TACKLING THE GROWTH CHALLENGE DOMESTIC IT MARKET (2011-2020)

T

he IT spend in India witnessed a

In May 2014, when the new government,

double dip in 2013 (the first being

with clear majority, took charge under

in 2009 after the global economic

the leadership of Mr. Narendra Modi, the

meltdown). The ebb in general economic

sentiment started getting more positive.

activities, due to a difficult economic and

There was euphoria that after a long

political environment in the country, resulted

period of uncertainty and instability,

in 8% growth in IT spend in 2013, the lowest

there will be stabilization, finally. Policy

since 2002. The spending by government

paralysis - more specifically with respect

was put on hold due to the general elections in

to economic policy - a key by-product of

2014, telecom industry was turbulent due to

political uncertainty - had resulted into

the 2G spectrum muddle, manufacturing was

low investor confidence and hesitation by

reeling under a tremendous slide in demand,

India Inc. in charting out any significant

insurance sector was short on funds to grow,

growth plans.

banking sector was finding it difficult to grow,

This inadvertently affected the enterprise

and retail was facing the three-pronged threat

spend, especially that on Information

- lack of funds, low consumer spending and

Technology. As the improved sentiment

the mushrooming growth of e-tailers. All of

has been demonstrated in the bolder and

it collectively led to the build up that resulted

development-oriented policy moves, the

into a grim scenario in 2013.

mood within India Inc. has also started

THE DIGITAL LANDSCAPE 2015 & BEYOND showing visible improvement. From

move towards ‘IT for growth’ in 2015, as

being ‘overtly cautious’ and ‘closed to

opposed to ‘IT to sustain’.

opportunities’, the industry is now slowly

‘IT for growth’ means increase in

gearing up for growth plans. In other

enterprise IT budgets and fresh impetus in

words, while companies began opening up

digital growth for most Indian enterprises.

their coffers to spend on IT, the decisions

By this logic, we predict 2015 to be a critical

were still marked by a degree of caution. It

year for India Inc. It is, perhaps, a turning

turned out to be a blessing in disguise with

point in their journey towards embracing

greater thrust on strategic pieces with clear

‘digital for growth’. While the journey began

business objectives and long-term growth

in 2014 when organizations started building

in perspective, instead of just spending on

the foundation for their SMAC+ stack, it

silos and being too tactical.

is now that the true preparedness of the

This has led to greater expectations from

enterprises for digital will be tested.

2015, which is reflected in the results of our

Core Quadrant pegs the growth in

survey, with over a hundred CIOs, on their

overall domestic IT spends at 12.3% in

business priorities and IT plans. Though

2015, up from 9.7% in 2014. We expect

businesses continue to focus on enhancing

the growth to continue in 2016 and 2017.

efficiency and productivity, which assumed

The Compounded Annual Growth Rate

even greater importance during the

for 2015-2020 is expected to be 11.7%

aforesaid period, there is an even bolder

(see figure 1).

India IT Spend, 2011-2020 (INR Crores)

FIGURE 1

115000

127996

138376

151786

170540 192802

217570

243548 270277

296529 9.7%

11.0%

YoY Growth 12.8%

15.4%

2011

11.3%

8.1%

2012

2013

CAGR 10.4%

9.7%

12.4%

2014

2015

11.9%

13.1%

2016

2017

2018

2019

2020

CAGR 11.7% Source: Core Quadrant, 2015

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14

THE DIGITAL LANDSCAPE 2015 & BEYOND But when we compare it with the

other, the emergence of niche players with

technology spending figures during the

super innovative point solutions, is quite

previous decade, especially between

a strongly visible trend. At the same time,

2003 and 2009, the story doesn’t appear

they are both competing and collaborating

very encouraging. The CAGR for the

for providing a holistic digital (technology)

period mentioned was 22-25% with

platform for the enterprises.

sectors like BFSI and Telecom accounting

These platforms correspond with

for the majority of it. This growth was

both infrastructure and applications (or

also accompanied by moderate-to-low

the process) layers. E.g. Cisco, Oracle,

inflation in the economy, in general, and

Microsoft, IBM, HP, Dell, Citrix, VMware,

continually falling prices of travel and

CA, EMC, etc. cater to the infrastructure

communications. Overall, it was a great

layer with a unified compute, network

time for the businesses to post healthy

and storage platform, whereas MS,

profits, which reflected in their high

Oracle, IBM, Adobe, SAP, Salesforce.com,

spending on IT.

etc. cater to the applications (or process)

However, the situation in the current

layer. The “Platform Strategy” is oriented

decade is very different. The revenue

towards tapping the surge in spend by the

growth is moderating but inflation is high,

enterprises for building digital capabilities.

and the pressure on margins is felt across

A platform (or architecture or suite or

industries, let alone IT. The business focus

cloud) finds place for not only the vendors’

is on containing costs and enhancing

key products and unifying framework

revenue growth. The situation in the global

but also for the point products from niche

economy, especially the developed block, is

players (as collaborators). The niche

grimmer. The key issue for the IT vendors

players offer an innovative approach to

today is to find ways to grow business.

address an existing problem for which

The subsequent paragraphs shall

some solution exists, or they innovate for

provide an analysis of a new market

a completely unaddressed problem area.

landscape, shaping up in response to the

Eventually, many of the niche players

growth challenge.

may get acquired by the large vendors and

The Growth Challenge & Converged Platform as the Stratergy

become a part of their unified frameworks.

The commoditization of hardware, their falling prices, acceptance of the open source, emergence of cloud computing, pressure on time-to-market, increasing

In response to the changing business

competition from the technology startups

dynamics, the vendor landscape is evolving

and shrinking IT budgets put large

faster. On one hand, the large vendors are

vendors in a quandary as far as growth

figuring out ways to sustain growth, on the

is concerned. In order to deal with it, the

THE DIGITAL LANDSCAPE 2015 & BEYOND response of the large vendors is to build

and retain the customers, and hence

platform strategies, which allows them to

control on revenue), complementary

capitalize on their strengths of being end-

technology vendors form a consortium

to-end and one-stop-shops.

and new go-to-market partnerships are

The platform strategy envisages that

identified and nurtured. The success in

smaller players align with the larger

this new paradigm of platforms shall

players (who have the might to manage

depend on partnerships, ecosystem

DEFINING ‘PLATFORM’

T

he (technology) platform definition has evolved over time. What was once referred to denote the core

operating system (Linux versus Windows platform), evolved

infrastructure, smart applications and smart processes.

The SMAC+ layer plays a big role in creating the digital platform.

over time to include other aspects of the core systems

A vendor (digital) platform is defined as a

(hardware and applications) and catalyst technologies

converged play of these three stacks to provide a

(middleware, virtualization, SOA, web services, etc). The

specific infrastructure, applications or catalyst

latest extension has been in terms of the SMAC+ stack

functionality in an automated, managed and optimized

of technologies and the emerging infrastructure related

manner. The stacks and the related technologies can

choices of data centre design, public versus private cloud,

come from one or multiple vendors.

IT automation, software driven everything, analytics driven

The enterprise (digital) platform, on the other

IT processes, etc. In short, the technology platform has

hand, offers a broader play of the three technology

continually evolved in terms of its scope and functions.

stacks built by using multiple vendor platforms and

Core Quadrant classifies technology into three

individual technology pieces, which may belong to

stacks - core, catalyst and SMAC+ . These stacks

multiple vendors and generations. An enterprise

mesh up together to create a digital platform.

platform is an evolutionary phenomenon, and ideally,

1

A common misconception is that SMAC+ technologies sit on top of the core and catalyst layers.

Some refer to them as the ‘third platform’.

We feel that in some cases it may be true. But,the larger play for SMAC+ is to mesh up with the core and the catalyst technologies and help build smart

never in a perfect state of existence.

Throughout this report, we shall be using the terms ‘vendor platform’ and ‘enterprise platform’, which are different in their definition and scope.

The seven key defining aspects of a digital platform are applicable to both vendor and enterprise versions 2 .

Core- Servers, Storage, Network, Unified Communications, Enterprise Applications, Database, Security, BCDR etc.; Catalyst- Virtualization, Software-Defined Layers, Infrastructure Management Software, Network Optimizer, BPM, Data Management Platform, Service-Oriented Architecture, Middleware, Web Services, APIs etc.; SMAC+- Social, Mobile Apps, Cloud Orchestration/ Broker Solution, Mobile Devices Management, Analytics/ BI/ Big Data, Mobile Middleware Platform etc.

2 A holistic definition of an enterprise digital platform is discussed in a subsequent section 1

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THE DIGITAL LANDSCAPE 2015 & BEYOND

1. Automation of the underlying IT service processes 2. Enhanced communication between machines, people, process and data through integration 3. Embedded play of analytics and big data capabilities for smart infrastructure and applications management 4. Availability of IT management dashboards on multiple devices 5. Elasticity and geographical spread to computing, networking, storage, middleware, applications and the development environment 6. Openness to integrate other platforms or services 7. Security & governance at multiple levels of infrastructure, applications and data

(The above seven aspects of a platform provide efficiency in IT management, optimized provisioning of resources and agility to respond to business needs.)

management, value chain effectiveness,

large legacy footprint. It is a continual

delivery channels innovation, marketing

interaction of new technologies at the

and customer acquisitions (management

periphery and the legacy at the core,

and retention). Mere technological

and the speed and manner in which

superiority is not enough to succeed in the

the new technologies impact and shape

changed order.

the core. The contemporary enterprise

The platform strategy also puts

platform must support the growing

innovation at the centre of the partnership

demand of anywhere, anytime and any

rather than restricting it within the

device access by anyone (employees,

organizational boundaries. The potential

customers, suppliers and partners). How

winning technologies, products and

do the vendor platforms get adopted by

services shall be increasingly created in

the enterprises to build (or evolve) their

the larger ecosystem, often by smaller

individual platforms shall determine the

players (or start ups), supported and made

success of the latter’s strategy.

mainstream by the bigger vendors.

The term platform can also be seen from a user point of view. It is not necessarily the same as a vendor’s view. The enterprise

A New Growth Ecosystem*

platform is an ongoing phenomenon,

Slowly but surely, there’s a surge in the

defined by the contemporary technologies

tech-driven business and more so in the

and how they are integrated amid a

adoption of digital technology. As a result

THE DIGITAL LANDSCAPE 2015 & BEYOND of this, a new growth ecosystem is taking

A fair share of the new growth is

shape. It consists of a variety of vendors.

currently being cornered by the new and

This ecosystem is emerging against a

niche players. The larger vendors are

backdrop of ‘the commoditization’ of the

trying to place themselves more suitably

traditional IT. The new growth is expected

in the new growth ecosystem. Let’s

to come from the enterprise spending on

briefly discuss the five types of players

creating an enterprise (digital) platform to

relevant in the new growth ecosystem

support their digital business initiatives.

(see figure 2).

(*For the first time, Core Quadrant aims at conveying information on technology providers/vendors. We have tried to be as vendor agnostic as possible, apart from being fair and unbiased. But we don’t want to be vendor oblivious when it comes to conveying information on digital technology services and products. In fact, the ecosystem of technology vendors is actually something that merits a story all its own.)

The New Growth Ecosystem

The Commodity Market

Partners

Niche Vendors

The Platform Builders

The Platform Integrators

FIGURE 2

Consultants

The Enterprise Platform

The Platform Strategists New Vendors

Large Vendors The Platform Providers

The Platform Challengers/ Supporters

Source: Core Quadrant, 2015

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THE DIGITAL LANDSCAPE 2015 & BEYOND (i) Converged Platforms from Large

or complimentary niche vendors to create

Infra and App Players: Large technology

converged platforms for comprehensive

players like Microsoft, Google, Cisco, IBM,

service/solution offering, rather than

HP, Oracle, SAP, Dell, etc. are creating

competing separately.

a unified and converged infrastructure and applications platform. The platform

(iii) New Products Vendors or Startups:

is being built upon the existing products

New products and services, often seen

(hardware and/or software) and services,

as addressing the gaps in the existing

new products and services acquired over

platform ecosystem, are being developed

time and partner products and services.

by new vendors or startups. They address

These large vendors are the ones facing

very specific aspects of the infrastructure,

the growth conundrum. New, niche

middleware or the applications. E.g. domain

and startup vendors have been smartly

specific process application providers,

cornering a fair share of the growth in a

messaging applications for automated

low-to-moderate growth market.

infrastructure management, mobile devices

There has been an increasing pressure

management middleware, etc.

on the larger vendors to act beyond their commodity playto satisfy their investors.

(iv) Platform Strategists: The

These vendors are finding ways to evolve

management and technology consultants

to place themselves more suitably in the

(including many of the large vendors

new growth ecosystem.

listed under category 1) help an enterprise design their platform blueprint, which

(ii) Niche Vendors and Their Converged

can be built in-house or with the help of

Portfolio: The challenges before the

a third party. As enterprises’ focus on

niche or mid-sized vendors such as

building their digital platform is gaining

VMware, EMC, NetApps, CA, Citrix,

momentum, the platform strategists also

Adobe, Salesforce.com, etc. are not

have an opportunity to grow.

very different from the larger vendors.

The niche vendors play in specified

(v) Platform Builders: These are the

domains of infrastructure (computing,

erstwhile systems and network integrators,

storage, network and management),

who have now forayed into third party

middleware or applications layer, and

smart infrastructure and application

have been busy creating a converged

providers. They generally collaborate with

version of their technology stacks to

the first three (category of vendors) to build

offer an integrated platform. These niche

a mesh of technologies for enterprise users

players are collaborating with other

to access their products and services. They,

large vendors (e.g. the VCE converged

in a way, are the new Systems/Network

product from VMWare, Cisco and EMC)

integrators or distribution (channel)

THE DIGITAL LANDSCAPE 2015 & BEYOND partners, who can place themselves

In figure 3, Core Quadrant’s position

between the first three (category of

on the two phases of transition is

vendors) and the enterprise users.

depicted. The first phase of transition is from traditional IT to digital embrace

Old Versus New Growth Ecosystem: The Big Transition

and second phase is from digital embrace to full digital play. (see figure 3) In the traditional phase, IT was deployed and consumed onsite as distinct products

In order to understand the ‘platform’ story

and services. Though technologies like

of the incumbents (big, niche, strategists

virtualization, integration, middleware,

and builders) as a strategy to deal with

SOA and services paradigms like managed

the growth challenge, we need to first

services and outsourcing emerged to

declutter the deeper and bigger transition

create a feel of a converged platform, the

underway. We all are witness to the

vendors approached markets largely from

decisive shift from the traditional IT to a

distinct products and services perspective.

FIGURE 3

The Big Transition Traditional IT

Digital Embrace

Full Digital Play

Onsite:

Hybrid:

Distinct Products and related Services

Mix of Onsite and from the Cloud

Infrastructure, Development & Application Platforms

Technology Specific Competition

Blurring Competitive Boundaries

Platform Specific Competition Source: Core Quadrant, 2015

stronger, digital play. But, how easy will

Their customer engagements and channel

it be for the incumbents to transit? What

strategies were driven by individual

stage of transition are they in today, and

products and services.

how far can they really go?

Core Quadrant believes this transition

Digital embrace involves an incremental play- newer product/

to take place in two phases and many

service conceptualizations, newer ways

incumbents may find it difficult to cross

of customer engagements, newer ways

both the levels of transition. These

to deliver them and online channels

transitions are not about some start

to distribute them. Most of the large

and end points, but about continuous

technology providers (IBM, HP, Dell,

evolution. The two phases are merely

Microsoft, Cisco, SAP, Oracle, etc.), niche

conceptual in nature.

technology providers (VMware, CA,

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THE DIGITAL LANDSCAPE 2015 & BEYOND EMC, Citrix, etc.) and technology builders

The transition to full digital play is

(Wipro, TCS, Accenture, etc.) are in the

extremely risky, uncertain and requires

first stage of transition.

clarity of vision. To let go the huge revenue

If digital embrace can be termed as ‘service first’, then full digital play is a ‘services only’ paradigm. Even products are available as services, delivered and distributed virtually. In short, digital embrace is an incremental approach where traditional and new exist together, but full

base, which has been managed in traditional ways, is not easy.

The Five Platform Strategies of The New Growth Ecosystem

digital play is a distinctly new approach.

The new age players and incumbent vendors

Internet players (like Google, AWS,

(transitioning from traditional to digital

Salesforce.com, etc.) and new startups are

embrace and full digital play stages) shall

at this stage because of no legacy. However,

make their digital foray, or alignment with

Adobe is an exception, which has evolved

the market opportunities, in three ways:

beyond the first level of transition and is

(see figure 4)

well ahead of other traditional players in its second level of transition.

The first transition is relatively simple as

(i) Creating products for digital: Building a digital platform requires next generation

it represents moving to a middle level, where

products, e.g. next-gen networking

the new platform play works along with the

products, endpoint devices, infrastructure

traditional. It requires some adjustments

management tools, broker platforms,

in products/services design and delivery

middleware, APIs, traffic management

(onsite versus over the cloud), involves

tools, virtualization products, optimization

new channels of distribution (physical to

products, development tools, etc.

online) and new ways to engage with the partners and customers (social). But this

(ii) Providing products and services as

adjustment doesn’t go the whole hog. It is

digital services: The second digital foray is

just incremental, retaining the traditional,

about moving towards providing products

which accounts for the volume baseline

and services online (as a service). This may

revenue (if not growth).

vary from simple functionality (e.g. server

The second transition is extremely

power, storage space or email service)

difficult, if not completely impossible. The

to a very complex solution (e.g. unified

success in carrying out the transitions shall

communications, marketing applications,

determine the readiness to grow. Over time,

development environment).

both the transitions will be required, though majority of incumbents are today managing

(iii) Services for building digital platforms

to stay in the middle ground.

for the enterprises: If the first two forays

THE DIGITAL LANDSCAPE 2015 & BEYOND

FIGURE 4

The Three Digital Forays Products for Digital Next-gen networks, end point devices, broker solutions, middleware, APIs etc. are all products, which enable digital play.

Providing Digital Providing products (as service) and services from the could. E.g.

Azure of Microsoft, HANA by SAP, Marketing Platform of Oracle and Watson Analytics by IBM.

Building Digital The platform builders, who take the products, third party platforms and their own platforms to build digital platform for the enterprises.

IBM, Dell, HP Microsoft, Oracle, CISCO, SAP, CA, Citrix, VMware

Wipro, TCS, Dimension Data, Data Centre Players

Adobe, Salesforce.com, Google, AWS New Players, Start-ups Source: Core Quadrant, 2015

provide the products and services to

see the classification using an analogy

envision an enterprise digital platform, the

of car manufacturing 3 . Building a car

third foray is about building it. This is the

requires individual components (the nuts

domain of platform builders and integrators,

and bolts, chassis, engine, etc.), component

who use products and services of diverse

assemblies (transmission drive assembly,

type and vendors to create a custom platform

engine assembly, electronics platform, etc.),

for their clients.

assembly platform (the line or the raising

These three types of forays are sort of pure plays, and larger vendors play across

platform or the paint platform), and special products and fittings. (see figure 5)

these forays with complex and multiple go-to-market approaches. The Figure 4 gives

There are five platform strategies vendors

a mapping of how the prominent vendors

are adopting today:

(or vendor groups) span across these three

(i) Converged infrastructure platform:

forays or market alignment approaches.

A converged infrastructure is an

After defining the new growth ecosystem

integrated mesh of hardware (computing,

and the three types of forays, it is now time

networking, storage), software-defined

to understand what are the various platform

layer, infrastructure management software,

strategies adopted. These platform strategies

virtualization, security and the SMAC+

are more concrete steps in which the vendors

components. These converged platforms

go to market and position themselves. Let’s

propose to provide most of (if not all) the

3 Though the digital & converged platforms’ world is certainly more complex than the analogy we have discussed here, the purpose of the analogy is to make the concept clear and lucid.

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22

THE DIGITAL LANDSCAPE 2015 & BEYOND

FIGURE 5

The Five Platform Strategies

1 Converged Infrastructure Platform

2 Unified Management Platform

3

4

Integrated Applications Cloud Platform

5

Data Centre and Cloud Platform

Niche Service Cloud Platform Source: Core Quadrant, 2015

infrastructure capabilities in a single

as data de-duplication and other efficiency

package. The emergence of such concepts is

gaining technologies.

a direct result of ambitious plans of the large

From the analogy of car manufacturing,

vendors. Not content with their respective

the converged platform is like the pre-fitted

domains, each one of them has been moving

engine, chassis and transmission drive

towards the centre by bringing in other

loaded with functionalities to manage their

pieces of infrastructure. It is their strategic

interactions and optimize the same. A car

response to dealing with the growth

manufacturer can procure these pre-fitted

challenge. They build these platforms in-

assembly of individual products and build

house, through acquisition or by partnering

on top of it to produce a car.

with other vendors. These converged infrastructure platforms can be used both

(ii) Unified management platform:

‘on-premise’ or ‘in-the-cloud’ model (or even

Unified management platforms are built

a hybrid model).

upon similar fundamentals as converged

Cisco, IBM, HP, Dell, EMC, VMware,

platforms, but there is one key differentiator.

Oracle are the prominent players who have

They are beyond the core infrastructure play

created such converged infrastructure

and address a specific functional, service

offerings. We see the emergence of a new

management, application or process aspect.

sub-category called hyper-converged

They are built using a unifying framework,

platforms. HCPs have emerged from

putting together a variety of hardware and

companies like Simplivity, Nutanix and

software products, and delivered both on-

Maxta. Unlike a converged platform, where

premise and in-cloud.

the components are from multiple vendors

Examples of this include unified

but architected together, a hyper-converged

communications, security, mobility,

platform is typically an appliance that

cloud management, data management, IT

combines higher-density compute cores,

infrastructure management, IT service

all-flash storage arrays and all software-

management, applications development,

based networking from a single vendor, or

applications lifecycle management or

from an array of partnering vendors. Some

business process management platforms.

of these appliances come with features such

The vendors active in this area include

THE DIGITAL LANDSCAPE 2015 & BEYOND Cisco, Microsoft, Oracle, HP, Dell, CA,

(iv) Data centre and cloud platform: The

IBM, SAP, etc.

data centres and cloud platforms help

In our analogy of car manufacturing,

enterprises, developers and builders leverage

this includes special assemblies like the

the power of the first three as a service. Large

integrated electronic system covering

technology providers, erstwhile system

the engine management, audio, video,

and network integrators, and new breed of

communication, navigation systems and

services players are building such platforms

the dashboards.

for others (large application vendors, niche players, new startups) to host their services

(iii) Integrated applications in the cloud

or for use directly by the enterprises. The

platform: Integrated applications are not

data centre and cloud platform also leverage

novel. Integrated suite of applications

the strength of the first three platforms

from the application vendors have been

discussed here - converged infrastructure,

there for some time now. But these

unified management and integrated

models are mostly on-premise. What’s

applications in the cloud.

new is a set of ‘functional’ applications

Azure is one such platform from

available in the cloud. These are

Microsoft, which has extended its play

function-oriented (like marketing, supply

beyond software into the broader realm

chain and HR) or industry-oriented

of IT services. IBM, Google, Amazon Web

(like core healthcare or core insurance)

Services, HP, Dell, EMC, VMware and

and can be accessed through a SaaS

other large and niche players have offerings

(Software-as-a-Service) model.

around cloud development and management,

Most such platforms have the ability to integrate offline services (like product purchase in case of marketing or material

offered both as discrete functionalities and as integrated platforms.

From the analogy of car manufacturing,

supply in the case of supply chain) with

it includes the platforms and specific

online services (like content consumption

frameworks and tools to manufacture

or level of engagement). Loaded with

a car. The assembly line is one such

analytics and big data capabilities, these

example(unfortunately that cannot be

platforms integrate a wide variety of

accessed online).

digital (and physical) services and help create functional capabilities for the Line of

(v) Niche cloud platform: Niche cloud

Business(LOB) managers.

platforms offer specialised services,

The software which controls the

which can be accessed by enterprises,

electronics system functioning, when

developers and builders in the cloud. For

accessed directly from the cloud is the

example, Google Analytics, IBM Watson,

equivalent of integrated application in the

SAP HANA or Hadoop (an open source

cloud in our analogy.

platform). These are analytics and big

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24

THE DIGITAL LANDSCAPE 2015 & BEYOND data platforms, which can be accessed as a

The discussion regarding a new

service. Similarly, Cloud Managed DevOps

ecosystem of growth, the big transition,

by IBM is an example of a development

emerging pure play forays and the five

platform using DevOps methodology.

platform strategies is summarized in

Special platforms to develop

figure 3. It summarizes the market

customization of the car exteriors (like

realignment activities of large and niche

the famous Dilip Chabria or DC brand)

vendors in response to the big transition

are the niche products and services in our

in the market and the deepening growth

analogy of car manufacturing.

challenge. (see figure 6)

The Digital Landscape Traditional IT

Digital Embrace

Full Digital Play

Onsite:

Hybrid:

Distinct Products and related Services

Mix of Onsite and from the Cloud

Infrastructure, Development & Application Platforms

Technology Specific Competition

Blurring Competitive Boundaries

Platform Specific Competition

DIGITAL FORAYS

Providing Digital Providing products (as service) and services from the could. E.g.

Azure of Microsoft, HANA by SAP, Marketing Platform of Oracle and Watson Analytics by IBM.

Building Digital The platform builders, who take the products, third party platforms and their own platforms to build digital platform for the enterprises.

3

IBM, Dell, HP Microsoft, Oracle, CISCO, SAP, CA, Citrix, VMware

Wipro, TCS, Dimension Data, Data Centre Players

Adobe, Salesforce.com, Google, AWS

PLATFORM STRATEGIES

New Players, Start-ups

5

FIGURE 6

Products for Digital Next-gen networks, end point devices, broker solutions, middleware, APIs etc. are all products, which enable digital play.

1

2

Converged Unified Infrastructure Management Platform Platform

3 Integrated

Applications Cloud Platform

4

5

Data Centre and Cloud Platform

Niche Service Cloud Platform

Source: Core Quadrant, 2015

26

THE DIGITAL LANDSCAPE 2015 & BEYOND

INDIA INC: WHERE ARE THE BIG BUCKS GOING

W

hen it comes to investments,

billion) in 2020, up from INR 19629

Indian corporations are very

Crores in 2015 (approx. US$3.3 billion).

unique and sensitive to many

During the period 2015-20 it represents

things like price, product life-cycle, etc.

a combined spending of US$37 billion by

Unlike their western counterparts, Indian

the enterprise and government segments.

corporations are cautious spenders. IT is no

(Source: SMAC+: Indian Enterprises’ Plans

exception. The boost in the pace of economic

Report, Core Quadrant 2015)

growth in India has brought the role of IT

According to Core Quadrant estimates,

into sharp focus among enterprises looking

the SMAC+ spending will grow at a CAGR

for horizontal and vertical growths. This

of 24.6% between 2015 and 2020, as

reflects in the data we collected from the CIOs

against the overall IT expenditure growth

across the country. The India Inc. is ready to

of 11.7%. This includes spending on all IT

bet on new technologies to give push to the

components, i.e. hardware, software and

growth (see figure 7).

services, and spending on third party

The spending on new technologies,

products and services as well.

represented by SMAC+ layer, shall reach

Year 2015 is going to be crucial in

INR 59000 Crores (approx. US$10

enterprise digital journey. This is the

THE DIGITAL LANDSCAPE 2015 & BEYOND

India SMAC+ Spending, 2015-2020 INR Crores

58919

CAGR 24.6% 49216

FIGURE 7

40021 32305 25471 19629

2015

2016

2017

2018

2019

2020

30.5%

26.6%

23.7%

20.4%

18.6%

17.2%

YoY Growth in SMAC+Spending Source: Core Quadrant, 2015

time when the SMAC+ moves from

In fact businesses, for the past

‘casual flirting’ to ‘deeper building’ of

couple of years, waited for these new

individual pillars as more enterprises

technologies to mature and demonstrate

recognise digital as the tool for

quantifiable results. The organizations

innovation and growth in the future.

natively undertook small pilots, POCs and

The estimates and expenditure do not include staff expenses or real estate costs. It also does not include the spending on digital marketing, which will be part of CMO’s budget and not the CIO’s IT budget.

The spending of US$ 10 billion in

experiments (few and far between) to test waters and begin.

Reality of 2015: Emphasis on the Core Overhaul, Piecemeal SMAC+ (on the periphery)

2020 suggests that out of every US$ 4 spent on IT by the Indian enterprise

When we went a little further in

and government segment, US$ 1 will

our quest to find whether Indian

go towards SMAC+. The software and

enterprises are really spending on

services component of SMAC+ will

SMAC+, the response wasn’t extremely

grow the fastest.

encouraging. The data from Core

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THE DIGITAL LANDSCAPE 2015 & BEYOND Quadrant’s latest survey, conducted

other isolated initiatives using SMAC+.

in Apr-May 2015 with over 300 CIOs,

These are placed mostly on the periphery

reveals an interesting story.

of an organization or the IT function

The Core Quadrant research revealed

(e.g. adopting cloud infrastructure for

that 3 out of 5 CIOs have focused on

development stuff or selectively putting

infrastructure and applications overhaul

non-mission critical apps on the cloud).

in the last 2 years, whereas 2 out of 3 were busy investing on enterprise mobility.

Overhaul of the underlying infrastructure

Nearly 50% CIOs have adopted cloud,

and applications: Overhauling the

analytics and social media in some form,

infrastructure and applications includes

whereas BYOD and middleware ranked

migrating to the new enterprise

low on adoption (and perhaps priority

architecture, consolidating data centres,

too). Actually, cloud and middleware

large-scale technology refresh, application

won’t be as low as it appears because

upgrade, application modernization,

some of them become part of the infra

applications portfolio rationalization, and

overhaul exercises, and hence do not get

also large-scale integration. Some of these

reported as standalone projects.

are part of the usual IT lifecycle, but some

There are two broad areas in which

are also driven (and will increasingly be)

the enterprises are focussing today. It

by the need for smarter infrastructure and

is to be seen, how the investments into

agile applications by meshing the SMAC+

these two areas sync up. These two areas,

with the core and the catalyst technologies.

though approached separately, are related.

The pressure for such smartness and agility

Without a proper alignment between

will mainly come from Line of Business

the two, the benefits of digital initiatives

(LOB) demands for newer processes and

cannot be fully reaped.

digital capabilities. (see figure 8) According to an earlier Core Quadrant

New SMAC+ initiatives: Though

research conducted in 2014 with 116

mobility seems to be CIO’s favourite

enterprises, 45% confessed they were merely

play, enterprises are also building ‘on

flirting with SMAC +. Another 37% said

the top’ SMAC+ applications, aimed at

they are building one of the few pillars,

enabling new customer touch points,

but in an isolated manner. 14% CIOs said

marketing, supply chain and enterprise

they are converging the SMAC+ pillars

processes. However, many of these

together with the aim to create a truly

initiatives will still be categorised as

end-to-end digital infrastructure. Among

‘flirting’ with the possibilities of SMAC+

the respondents a miniscule 3% claimed

in a limited manner. Flirting means

that SMAC+ is fully meshed up with

basic Facebook and Twitter presence,

their digital technology platform, and is

social listening, digital advertising, and

performing. (see figure 9)

THE DIGITAL LANDSCAPE 2015 & BEYOND

FIGURE 8

Significant Projects Undertaken in the Last 2 Years -CIO IOT

24%

BYOD

25%

Middleware

27%

eCommerce

36%

Social Media

40%

Analytics

49%

Cloud

55%

Applications Overhaul

61%

Infrastructure Overhaul

62%

Mobility

67%

Base –295 CIOs Source: Core Quadrant, 2015

If we superimpose these findings

Do they prefer to work with limited vendors or

upon the data in Figure 8, it is quite

a multitude of vendors?

evident that the SMAC+ play is still

Is there a difference between high digital and

very peripheral, and its benefits just

low digital score companies?

partially reaped.

The Platform Paradox: Converged Vs. Best of Breed

Let’s, first do a reality check from the infrastructure point of view.

Despite knowing that consolidation can be critical to support future growth plans, including digitization, CIOs aren’t readily adopting it. According to a Core

To get the bigger picture, it is vital

Quadrant research in late 2014 1 , while

to understand how enterprises are

79.3% enterprises considered vendors’

responding to and adopting the

offerings for consolidated, converged

platforms proposed in the marketplace

and optimized IT Infrastructure/data

by the technology providers.

centre solutions, just 15.5% actually

Are they really buying it?

implemented them.

1 Based upon a study of 116 Enterprises, Core Quadrant categorized them as High Digital, Medium Digital and Low Digital Score Enterprises. The Digital Score reflects the digital readiness of the enterprise and is measured using seven aspects of a digital enterprise - response to the external environment, strategy, leadership, structures, process capabilities, culture and technology platform.

29

30

THE DIGITAL LANDSCAPE 2015 & BEYOND The study also suggests that

23.7% actively considering it. On the other

organizations with a high digital score

hand, a mere 4.8% of the 21 organizations

tend to adopt converged infrastructure

with a low digital score have gone for

more than those with lower scores. For

converged infrastructure. It validates

instance, 22.2% of the 36 organizations

our claim that the adoption of converged

with high digital score have already

infrastructure is related to the digital score

adopted converged infrastructure and

of an enterprise

another 30.6% are on course to adopt it.

(Refer to Figure 10).

Similarly, 15.3% of the 59 organizations

As enterprises begin their tryst with

with a medium digital score have adopted

digital, the pressure to rethink and

converged infrastrcuture with another

reorganize their IT infrastructure is visible

The SMAC+ Progression FIGURE 9

Enterprise (Digital) Technology Platform Building 37%

First experience with SMAC+ by adopting on a piece-meal basis. Mostly at the periphery, these are low hanging fruits and isolated initiatives. The exuberance, however, is high.

Flirting 45%

The flirting with individual pillars of SMAC+ and the resulting experience and learning often evolves into focused build up around one or more pillars.

However, the build up remains largely separate and isolated.

The maturity in more than one pillar of SMAC+ and the resulting learning prompts enterprises to look at converging them together and with the underlying infrastructure and applications.

E.g. how mobility and social CRM, or cloud and analytics converge.

Converging 14%

Transforming 03% A highly converged enterprise (digital) technology platform also means that the underlying IT also has evolved to support it. A new enterprise architecture, a matured IT base, leadership vision, strategy, culture and skills sets are natural allies for it to give performance benefits.

116 Enterprises

Source: Core Quadrant, 2014

THE DIGITAL LANDSCAPE 2015 & BEYOND

Considered the Offerings of Vendors for Consolidated, Converged and Optimized IT Infrastructure/ Data Centre Solution

FIGURE 10

45

40.7

40 33.3

35 30

33.3 30.6

30.6

28.6

23.7

25 20

22.2

20.3 16.7

15.3

15 10 4.8

5 0

We have never considered

We have considered but did not adopt

Digital Score

Low

We have considered and planning to adopt Medium

We have considered and already adopted

High Source: Core Quadrant, 2015

because the traditional infrastructure isn’t

So that’s about the underlying compute,

sufficient to keep up with the escalating

network and storage infrastructure.

business demands for acceleration.

(see figure 10)

A digital transformation exercise,

However, when it comes to the pieces

including enabling and delivering SMAC+

beyond the infrastructure - solutions,

technologies, requires an agile, scalable,

applications, middleware and other

manageable and secure backend. For

components as part of the plumbing - one

IT, this means a change in the approach

of the most classic challenges CIOs face

towards IT infrastructure away from the

in their digital plans is the difficulty in

separate components/solutions for compute,

finding the right technology and the right

storage and the networks. The data centre

service provider to help them in achieving

needs to move away from a siloed approach

their business goals. Moreover, the new

and embrace new models that not only give

choices have added to the clutter, noise

cost and agility advantages but also ensure

and subsequently to the confusion.

enabling the underlying platform on which

According to the Core Quadrant survey

the digital technologies can work optimally.

of 116 Indian enterprises, conducted

The practical alternative to it is “Converged

during Dec 2014-Jan 2015, 45.7%

Infrastructure Platforms”.

respondents agreed they look at multitude

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32

THE DIGITAL LANDSCAPE 2015 & BEYOND of vendors (based on their speciality) to

Digitization has led to an accelerated

meet specific business needs. Only 12.1%

technology-driven startup environment

respondents said they look for one or fewer

being created across the globe.

vendors for their IT needs. The survey

(see figure 11)

also revealed that 34.5% enterprises are

While the confusion is but natural

looking at niche players to meet their

because of the way the market and vendor

digital needs.

dynamics are at play and fast evolving,

The survey suggests that out of 36 (of the

enterprises cannot afford to let this

116 respondents with a high digital score),

confusion translate into a limbo. For the

52.8% are looking at multiple (specialist)

CIO time is of the essence here, considering

vendors. The CIOs of these companies are

the pace of change, and so is taking an

aware of the digital trends on the horizon

appropriate decision on the right platform

and are ready to participate in digital

approach as that ultimately will have a far-

experiments and innovations. These CIOs

reaching impact on their digital journey.

are examining the diverse landscape of

At the infrastructure layer, Core Quadrant

new digital technologies and exploring

views the Converged Platform approach as a

opportunities that can bring in disruption

better option and as the way forward for the

and innovation, to help increase the

enterprises in the long run. And, the reason

stakeholder value.

we are more positive about it in the long

It’s a scenario that is being played out in myriad corners of enterprise computing.

term as opposed to short and medium term is because the value proposition currently offered by the Converged Platform vendors

What’s better? An integrated, ‘all-in-one’

hasn’t matured to the desired levels and it

product suite from a single vendor (or a

may take some time before it becomes clearer

consortium of many vendors) or a ‘best-

to the enterprises.

of-breed’ environment that incorporates multiple point solutions.

The confusion has escalated because the

From an enterprise perspective, the possible dampeners in the way of adoption of the converged infrastructure play

vendor landscape has undergone a drastic

would be the legacy and protecting the

shift with the digital sprawl. Companies

investments already sunk into the existing

that were, in the past, leading their

IT infrastructure.

respective segments, are today struggling

However, the story takes a

to maintain the equilibrium. Their channel

different turn when going beyond the

strategy, sales force and partner ecosystem

infrastructure layer. Here, paradoxically,

is challenged by competitors (like cloud

the enterprises are more likely to see a

and mobile startups fulfilling new business

preference for niche players and stand

technology needs), new buying centres

alone point products, specializing in

and changed customer business models.

certain areas and domains and with

THE DIGITAL LANDSCAPE 2015 & BEYOND

Single, Few or Multiple Vendors for Building the Enterprise Digital Platform FIGURE 11

60.0 50.0 40.0 30.0 20.0 10.0 0.0

We generally look for single or few vendors

We have one or few main vendors but we look at niche vendors too

Digital Score

Low

We look at multiple vendors, each one according to their specialization Medium

We do it all ourselves, we use multiple vendors for specific tasks

High Source: Core Quadrant, 2015

flexibility for greater innovation and

proposition that’s built on the innovation

customization. In the journey towards

piece. Opening up vistas for new

digitization, the pieces that are part of

innovation will hold the key to building

the ‘beyond infrastructure’ layer are

discrete functionalities into the platform

constantly evolving in tandem with the

and upstage a converged play that clearly

enterprise’s evolving digital play. Thus,

conveys that the ‘whole’ has more value

requiring a more strategic, specialized

than ‘sum’ of the parts. Furthermore, the

and open innovation approach, an

fear of being locked in to a platform and

expertise that niche and ‘best-of-breed’

having no choice going forward, would

players are better placed to offer with

be another aspect concerning the CIOs.

their point offerings.

Here, Core Quadrant recommends

Enterprises will clearly seek addressal of these issues before

converged platform vendors to base

making a significant move in the

their strategy around identifying and

converged direction even for the beyond

conveying a distinct business value

infrastructure pieces.

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34

THE DIGITAL LANDSCAPE 2015 & BEYOND

FUTURE PERFECT: NEED FOR A NEW ENTERPRISE DIGITAL PLATFORM

A

cross every industry and almost

media, connectivity, security, wearables

every organization, we see

and the paradigm of cloud computing. The

technology driving massive

possibility of new and innovative services

amount of change. The workforce entering

for the entire spectrum of stakeholders

in today’s business landscape has very

(consumers, partners, suppliers, institutions,

different expectations from technology.

employees) across multiple devices and

Businesses,too, are grappling with a peculiar

geographies is behind the need for a new

situation wherein they need to keep pace

enterprise digital platform. (see figure 12).

with the new form of globalization. With

The emergence of the new enterprise

the emergence of new-age companies on the

digital platform is a sort of transition

horizon, majority of organizations today are

from one paradigm to another. It is

looking at reorganizing themselves to stay

a journey, and hence, continuously

competitive, and therefore, a new enterprise

evolving. It may retain elements of the old

digital platform is emerging dominantly.

paradigms, though the proportion will

This emergence also traces its origin in the

change with time. Later on, we shall be

latest technological developments in the

discussing the three paths, which can be

client devices, mobility, analytics, social

adopted for this journey.

THE DIGITAL LANDSCAPE 2015 & BEYOND Firstly, we discuss the bigger shifts,

IT platform can be aptly termed as the

which characterize the journey towards

Enterprise Digital Platform. A functional

the emergence of a new enterprise

enterprise digital platform is critical. An

digital platform.

enterprise digital platform is a collection

A Comprehensive Definition

of myriad technologies from multiple vendors, assembled over a period, (ideally)

Enabled by digital technologies at the core

using the framework of an enterprise

and aimed at supporting digital initiatives

architecture

at the periphery, the emerging enterprise

(see figure 13).

FIGURE 12

Need for a New Enterprise Digital Platform

Cloud Services Partners/ Suppliers

Customers Cloud Services

Cloud Services

Enterprise IT (in premise)

Cloud Services

Cloud Services

Cloud Services

Developers

Employees

Institutions

Source: Core Quadrant, 2014

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36

THE DIGITAL LANDSCAPE 2015 & BEYOND

FIGURE 13

Enterprise Digital Platform

1

2

User experience with aesthetics, personalization, information relevance, security, multi device access, and speed

Digitized, secured and dynamically retrievable documents

3

4

5

Automated, agile, managed, connected, secured and contextualized business processes

Integrated, open, managed, optimized, orchestrated and secured business applications

6

Secured, quality & rationalized data, and smooth data flow in and out of the enterprise

Agile, governed & secure IT infrastruture

6 Functional Imperatives of an Enterprise Digital Platform

Digital

Catalyst Core

7 Technology Imperatives of an Enterprise Digital Platform

1 Automation of the IT processes by software defined everything

2 Communication between machines, people, processes and data

3 Embedded play of analytics and big data capabilities

4 IT management through dashboards on multiple devices

5 Elasticity and geographical spread through virtualization & cloud play

6

7

Openness to integrate with other platforms or services

Security & governance at multiple levels of infrastructure, applications and data

Source: Core Quadrant, 2014

THE DIGITAL LANDSCAPE 2015 & BEYOND The architecture is designed keeping in mind the operational and strategic reality of an enterprise. The platform serves the enterprise processes, which are

2. Enhanced Communication between machines, people, processes and data through integration 3. Embedded play of Analytics and

automated and managed through IT, e.g.

Big Data capabilities for smart

communications, finance, sales, marketing,

infrastructure and applications

operations etc. Any change in the way processes are required to behave (a function

management 4. Availability of IT Management

of the external competitive situation and

Dashboards on multiple devices

the internal strategic choices) warrants a

5.

Elasticity and Geographical Spread

change in the way they are served by an

to computing, networking, storage,

underlying platform. In the broader realm

middleware, applications and the

of digital adoption, the demand is for agile

development environment

and dynamic processes, which in turn, requires a more agile and dynamic platform.

Enterprise Digital Platform takes form using digital technologies (referred to as SMAC+) in such a way that they mesh with

6. Openness to integrate other platforms or services and 7. Security & governance at multiple levels of infrastructure, applications and data These seven aspects of a platform provide

the other two technology domains the core

efficiency in IT management, optimized

(computing, networking, storage hardware,

provisioning of resources and agility to

business applications, security, BCDR and

respond to business needs. These 7 aspects

databases) and the catalyst (middleware,

also apply to the platforms by the IT

virtualization, infrastructure management

vendors, which are converged a platform of

software, web services, APIs, WAN

technologies from various vendors, to create

optimizer) technologies.

specific functionalities for the enterprise

This mesh of three domains, namely core,

digital platform.

catalyst and the digital technologies shall address 7 aspects or technology imperatives

However, an enterprise digital platform

and create 6 functional imperatives.

is a much broader entity, and one or

The former can be seen as an input or

many vendor platforms may become

constituting imperatives and the latter as

part of it along with the best of breed and

output or effect imperatives.

individual pieces of technologies.

The seven key defining technology

The technology input aspects enable the

(input or constituting) imperatives of a

core, catalyst and the digital mesh-up to create

platform are:

6 functional (output or effect) imperatives:

1. Automation of the underlying IT

1. Matching expectations of user

service processes

experience (UX): Consumerization

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38

THE DIGITAL LANDSCAPE 2015 & BEYOND of IT has raised the user expectations.

5. Secured, quality and rationalized

The customers, employees, partners

data, and smooth data flow: Multiple

and other users are not willing to accept

versions of data, poor quality of data,

anything which is shabby, slow and does

congestion free paths for the data to travel

not meet their needs. Mere availability

in and out of the enterprise boundaries, and

of IT services is not enough. Access to

lack of security while it travels are the key

relevant information, aesthetics, seamless

roadblocks in creating an enterprise digital

availability across multiple devices, security

platform. Unless these issues are resolved,

and speed are also important.

the digital platform functionalities may remain incomplete.

2. Digitized, secured and dynamically retrievable documents: Documents are an

6. Agile, governed & secure IT

integral part of a business and its processes.

infrastructure: A fully automated IT

Though a completely paperless office is a

infrastructure, which can be contextually

difficult aim, the more they are digitized and

managed and provided in the right

secured and can be dynamically retrieved as

measure, is important. A major part

needed, the more they enable digitization of

of IT spend goes into the baseline IT

processes and organizational boundaries.

infrastructure and the applications over it. Hence, their consolidation and

3. Automated, agile, managed, connected,

optimization are important for both

secured and contextualized business

efficiency and effectiveness.

processes: The traditional view of IT gives a

The 7 technology (input or constituting)

rigid picture of systems, which is almost cast

imperatives define where the CIOs should

in stone. The digital view promises agility

focus upon and invest while designing

and dynamism, personalized or context-

and building their enterprise digital

specific rendering play and a seamless flow.

platform, whereas the 6 functional (output or effect) imperatives define

4. Integrated, open, managed,

the functionalities expected out of an

optimized, orchestrated and secured

enterprise digital platform. These 6

business applications: Many enterprises

outcome imperatives can also be used to

develop applications as islands of

gauge the effectiveness of the enterprise

automation, which later require to be

digital platform.

bridged. They need these applications

CIOs and other technology leaders must ask

to remain open for further integration,

themselves:

especially with external services, optimized

• What is the current state on the 6

and well orchestrated for a seamless play.

The ease of access and information are important elements of user experience.

outcome or effect imperatives? • Where are the current bottlenecks and problems?

THE DIGITAL LANDSCAPE 2015 & BEYOND

TABLE 1

OLD & NEW PARADIGMS OF ENTERPRISE IT PLATFORM OLD PARADIGM On-premise IT infrastructure and applications, most of the users within the enterprise.

NEW PARADIGM A hybrid infra (on-premise and public or private cloud based IT infrastructure and application), growing number of users based outside the enterprise.

Development and change needs arise

Development and change needs arise at the

internally.

edge of the digital platform.

Monolithic infrastructure based on

Flexible infrastructure based on virtualized

dedicated computer network and storage

and software-driven computer, network and

hardware, convoluted with point-to-point

storage hardware, secured public network

networking.

for optimized connectivity.

Applications developed using traditional methods like Waterfall model with long cycles.

Application development using modern methods like DevOps with short cycles.

Stability-oriented and slow in responding to

Change-oriented and agile in responding to

the business needs.

the business needs.

Focuses on stability, availability, perimeter

Focuses on change and agility, user experience,

security and closeness.

data security, governance and openness.

Source: Core Quadrant, 2015

• What is the required level, and where should the focus be?

• Where should the investments go in terms of the 7 technology imperatives to enhance the performance around the 6 outcome imperatives?

The process of creating the 6 functional

The Enterprise Digital Platform: A Tale of Two Competing Worlds The challenge before today’s CIOs is to balance competing priorities. On one hand,

(output or effect) imperatives is a journey

they are expected to create an efficient and

from old paradigm towards the new

effectively run IT platform, manage the

paradigm. Table 1 provides a comparison of

complexity of technologies from a large pool

the old and the new paradigm of enterprise

of vendors that has been put over time, and

IT on the relevant aspects.

build adequate IT security; On the other

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THE DIGITAL LANDSCAPE 2015 & BEYOND hand, they are expected to respond to the

provisioning of the IT infrastructure (and

growing demands of the LOB managers for

applications). What was earlier limited to

speedy implementation of digital initiatives

the demands of a few in a LAN (or, at the

and educate the users to leverage the

most, enterprise WAN) environment has

information for decision making.

now transformed into a bigger, complex and

These two competing demands arise from two different worlds of digital and traditional IT - each one requiring a

erratic load coming from the edges of an ever-expanding network of users.

Developing a responsive and agile IT

different management outlook, leadership

platform seems to be a major priority for the

approach and operating structure. Many

CIOs in 2015. According to a Core Quadrant

paths and options can be adopted to bridge

research on CIO’s IT Priorities, 2015, 25%

this dichotomy. However, an organization

respondents mentioned infrastructure

must be aware of and deliberate upon their

overhaul as their top priority, followed by

fitment before it chooses any one of them.

17% citing applications overhaul, and 14% mentioning consolidation of IT assets as the

Let’s first understand the five competing

top priority. Combined, a whopping 56% of

priorities for the CIOs:

the CIOs see evolution of a future enterprise

(i) Responsive and Agile IT Platform:

platform as their top goal. For many

The scope of IT is no more limited to the

enterprises, the old platforms are failing to

physical premises of an enterprise. It has

meet the demands of digital applications

changed dramatically for two reasons.

using SMAC+.

One, the definition of an enterprise has

The traditional architectures,

undergone dramatic shift with mobile field

development methodologies and old

workforce needing to remain connected

technologies of the legacy platform

and employees wanting to work anywhere

generally do not fit well with the new

and anytime. Two, customers demand

world of speedy application development

access to the enterprise services anywhere,

and operations. The legacy platform is

anytime and anyplace. With the sprawl of

complex as it evolved through a piecemeal

smart phones and better internet services,

approach to development, and attempts

employees, partners and customers are

to integrate the otherwise disconnected

more empowered than in the past.

islands of automation. Beyond a point,

The scope of enterprise IT has changed.

it becomes untenable and limitations

It is no more confined within the physical

of legacy platforms stand in the way of

premises of an enterprise. A part of it has

an enterprise’s digital initiatives. The

moved outside into the cloud and that part

situation is manageable till the digital

is expected to grow further.

initiatives are flirting in nature and

The change in the scope of IT puts a lot of pressure on the availability and

remain at the periphery. But as they evolve for a better penetration into the

THE DIGITAL LANDSCAPE 2015 & BEYOND enterprise IT platform, legacy starts

priority for this year, a massive increase

becoming a bottleneck.

from just 19% last year. It’s an indication that the SMAC+ play is evolving beyond

(ii) Operational Efficiency: The business

the initial flirting phase to the building

environment of moderating growth and

phase and beyond. By the end of 2015, it is

rising costs has its own effects on the IT

expected that more CIOs shall have explored

spend. The budget for IT is not increasing

the possibilities around SMAC+ and, hence,

as seen in the past. Core Quadrant

will face the challenge of evolving the

estimates IT spending in India to grow

mechanism to develop and deploy digital

at a CAGR of 11.6% over the 2015-2020

applications speedily.

period. A constant struggle for the CIOs

It results into the need for a responsive

is to balance the competing needs of new

and agile platform, from both operations

applications development (which may have

and application development points of view.

a direct impact on business) and ensuring

How do CIOs harmonize the traditional

maintenance of the legacy platform. Any

legacy approach at the core and the new agile

money saved in doing the latter will create

approach at the periphery as they evolve

more leeway for the former.

into a digital enterprise platform, is a key

A better utilization of the existing

challenge for the CIOs.

resources, enhanced productivity of the IT workforce and reduction in complexity is

(v) Adequate Security: Lately, security

a clear mandate today. According to a Core

has been quite a concern for not only the

Quadrant research on CIO’s IT priorities,

CIOs but also the top management and

2015, IT Efficiency emerged as the top

the company boards. As the enterprise

priority for 48% of the CIOs.

grows and its boundaries expand, more access points get created, travel of

(iii) Information Leverage: A quarter of the

critical data intensifies and new threats

CIOs see educating IT users, and creating

emerge. Any security preparation seems

structures and practices for leveraging

inadequate in the age of cyber warfare

information residing in the enterprise

where the bad guys seem to be miles

systems as a priority for 2015. An increasing

ahead and companies are merely into

number of leaders are realising the need

catch-up game. In the Core Quadrant

to focus on information as opposed to

research, nearly 25% of CIOs stated that

technology alone.

security is their key priority for 2015.

This need shall further intensify with

(iv) Speedy Digital Applications: Yet

the enterprises’ evolution on SMAC+

another interesting finding of the same

(beyond the flirting phase). As the market-

survey is that 40% of the CIOs said that

facing applications get integrated with

exploring digital technologies is their

the critical enterprise data and access is

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THE DIGITAL LANDSCAPE 2015 & BEYOND

FIGURE 14

Competing CIO Priorities RESPONSIVE AND AGILE IT PLATFORM

OPERATIONAL EFFICIENCY

INFORMATION LEVERAGE

IT PRIORITY FOR 2015

SPEEDY NEW APPLICATIONS

ENHANCED SECURITY

BASE-142 CIOs

%

Enhance IT OPERATIONAL EFFICIENCY

47.6

(through adoption of IT management processes, frameworks and technologies) Explore NEW TECHNOLOGY paradigms

39.5

(like social, mobility, cloud, unified communication, green IT, BYOD, etc.)

Enhance INTERNAL USAGE

25.8

(of IT for business advantage) OVERHAUL architecture

25.0

(to prepare for the infrastructural needs of the future) Enhance IT SECURITY/BCDR

23.4

(& risk management) ADOPT / EXTEND / OVERHAUL enterprise

16.9

applications CONSOLIDATE IT assets

13.7

(for economies of scale and optimization) OTHERS (

5.6

Outsourcing)

Source: Core Quadrant, 2015

given to a multitude of users (consumers,

including access control, perimeter security

mobile workforce, partners, suppliers and

and data security. (see figure 14).

distributors), security challenges will erupt more often. This will mandate the CIOs and CISOs of organizations to stay ahead of the curve, and create a policy-based security architecture to safeguard the

The Dynamic Interplay of the Two Competing Worlds

digital enterprise. The need is for a multi-

Enterprise (digital) platform is an outcome

faceted and dynamic approach to security

of a recursive process of interaction between

THE DIGITAL LANDSCAPE 2015 & BEYOND the two competing worlds- digital initiatives

However, eventually the two need to

(at the periphery) and the core infrastructure

reconcile and sync with each other. Though

and applications (at the centre). The

each enterprise shall evolve in a unique way

technologies in middle (or catalyst) layer

and have unique milestones, we present

establish a dialogue between the two.

three possible pure-play paths.

small patches of technology to complex

Evolution, Co-evolution or Revolution: The Three Paths to Build the Enterprise Digital Platform

adjustments enabled by a significant middle

As said earlier, enterprise (digital) technology

layer and upgradations. But, these changes

platform is an outcome of a recursive process

are piecemeal for specific initiatives.

of dialogue between digital initiatives (at the

There are two aspects to this dialogue: One, the peripheral digital initiatives and the changes (or adjustments) they require in the core architecture. They may range from simple adjustments enabled by

periphery) and the core infrastructure and Two, a big overhaul and upgradation of the core infrastructure and applications

applications (at the centre).

With time, they must intimately mesh

create new possibilities for market facing

together to create an enterprise (digital)

digital initiatives at the periphery. The

platform. This platform continuously

digital elements really seep deep into the

takes shape during its journey. There

core infrastructure and applications, thus

are many ways in which this sync may

creating brand new digital capabilities.

happen, depending on the environmental,

The Figure 15 shows the dynamics of the dialogue between the two competing worlds.

But, why are they competing?

Because, their key characteristics and

strategic, structural, relational, cultural and technological realities of an enterprise.

There are three representative trajectories, which can define the way

demands are different. The peripheral,

the sync between the peripheral digital

market-facing digital initiatives require

initiatives and core infrastructure

speed of development and roll-out across

and applications gets established-

multiple channels. The core infrastructure

(disconnected) evolution, co-evolution

and applications, on the other hand, are

and revolution.

required to address issues of traditional development models, integration, technology

We define each one of them briefly here:

compatibility, regulatory compliance and

(Disconnected) Evolution: The two

security. They represent the legacy (multiple

forces may evolve in a disconnected

platform and technologies) built over time

manner, independent of each other (or

and they trade off robustness with speed.

with minimum interdependence). They

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THE DIGITAL LANDSCAPE 2015 & BEYOND

FIGURE 15

Three IT Layers and Dynamics of the Enterprise Digital Platform Market facing digital initiatives driving innovative processes, multiple channels and new products. These initiatives face ‘time to market’ pressures and require agile development and implementation frameworks. They mostly address the needs specific to LOB functions and mostly driven by the respective functional heads.

The catalyst technologies play an important role both in rolling out the digital initiatives and building the core IT infrastructure and applications.

Digital

Catalyst Core

Core infrastructure and applications represent the baseline (one may also refer to them as backend) IT. It is a legacy, which is built upon traditional development approaches and are slow to respond.

How deep does the peripheral need to go? In other words, what kind of changes or adjustments or upgrades are required in the core IT or the catalyst platform in response to the peripheral digital initiatives?

The upgrade or overhaul of the core enterprise platform is undertaken to make it more digitally enabled. Why are these changes undertaken? Is it a routine thing or a special need? What have been the past patterns? What kind of new possibilities for SMAC+ does it offer? What new functionalities does it bring on table, which can be digitally exploited?

How does this recursive interaction shape up? Is it a designed process or is it left to evolve on its own? Is there a roadmap of the likely evolution (or revolution)? Who initiates the change and manages the road map? How is the change management planned?

Source: Core Quadrant, 2015

may be driven by multiple stakeholders with minimum interaction between

Many enterprises, in the flirting stage of digital evolution, may take this path.

them. It may be a natural choice due to inadequacy of the core IT platform or a

Co-evolution: The two forces co-evolve,

lack of concerted organizational focus on

i.e. evolve in tandem with each other, but

digital, where each one is left to decide

one step at a time. The peripheral digital

on its own. In the latter scenario, the

initiatives drive suitable adjustments

structural or relational readiness to drive

in the core, which is slowly developed

an organization-level digital drive is low.

towards providing new digital capabilities.

But these issues may not even be in the

It is still evolutionary, but with a

awareness of the leadership.

mechanism in the middle to enable them to

THE DIGITAL LANDSCAPE 2015 & BEYOND move together. The various stakeholders

Each CIO and CXO, in an enterprise,

have adequate interactions for the two

must answer the following questions:

aspects to evolve together.

• What is the enterprise reality in terms

An enterprise may evolve through the four stages of the digital evolution (flirting,

of digital vision, leadership support, collaboration between IT and business,

building, converging and performing)

and the structural mechanisms?

taking the co-evolutionary path. It is a

• What types of market facing digital

natural choice when the legacy core is still amenable to adjustments, and cannot be done away with because of financial considerations. As stated earlier, a middle

initiatives are being undertaken in your organization?

• Is the core enterprise IT platform’s ability to support these initiatives an issue? If

structural, relational and technological

yes, what kind of issues are there?

mechanism to drive the sync is essential

• Are you consciously approaching the

for co-evolution.

sync between peripheral and core?

• Which of the three paths are you taking,

Revolution: The sync between the two

and why? Is it working?

forces can be created through a big bang

If you have a vision of how your enterprise

approach, a complete overhaul of the core

digital platform should look, you need to

infrastructure and applications. When the

create an appropriate path to reach there.

peripheral digital initiatives become an important part of the competitive strategy and the legacy core becomes untenable to drive these initiatives, a big bang approach may be necessary. This approach

Vendor Platforms: Superiority versus Suitability

generally surfaces at the converging phase

Vendor platforms are essential components

when it becomes quite urgent to address

of an enterprise digital platform.

the legacy issues.

Though the CIO may want to develop

The revolutionary approach may be a

the enterprise digital platform using

part of a bigger business transformation

various technologies, vendors’ converged

drive (though it may be at the centre of that

platforms are also important. They provide

drive) and generally requires sophisticated

specific functionalities and capabilities in

structural mechanisms and involvement

a packaged form - a wheel which does not

of the C-suite.

need to be reinvented by the CIOs. But the

A comparison of the three evolutionary paths is given in Table 2.

A particular enterprise, based upon the need, may take each of the three approaches at different stages of its evolution.

real question to seek an answer to is: which platform(s) a CIO must adopt and which vendor(s) the CIO must select?

Once decided on platform(s), we recommend that instead of a technology

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THE DIGITAL LANDSCAPE 2015 & BEYOND

THE THREE EVOLUTIONARY PATHS

TABLE 2

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(DISCONNECTED) EVOLUTION

CO-EVOLUTION

REVOLUTION

KEY CHARACTERISTICS

The two forces evolve in their own domains at their own pace.

They evolve in sync with each other, but rather slowly, step by step.

A big bang approach. The core is overhauled in a big way for creating immediate digital capabilities.

LEADERSHIP

Fragmented approach, almost no interaction or synergy between the stakeholders.

Concerted efforts are taken by the functional CXOs and the CIO together.

The transformation is driven by the C-suite with an active participation of the CEO.

STRUCTURAL ORIENTATION

The structural mechanisms to create sync between the two forces is missing.

A minimum structural mechanism to drive sync is in place, even if the approach is one step at a time.

An adequate structural mechanism to drive a big bang change is created during the transformation.

SITUATION FITMENT

When digital initiatives are few and far between, mostly of flirting nature, and there is a low sense of urgency.

When the core can supprt the adjustments required to drive moderately urgent digital initiatives. It may not be feasible to overhaul the core in a big way as there have been big investments sunk in it in the past.

When the legacy core becomes untenable to support piecemeal adjustments required for (very urgent and strategic) digital initiatives.

PROS

It requires no or low investment.

It requires low investment, and still over time, it can drive the required level of digital drive at the periphery.

It can create new and strategic digital capabilities.

CONS

It is not suitable for advancing beyond the flirting or the building phase.

It is not suitable in the situation of urgent need or a low collaboration environment.

It requires high level of investments and very high level of collaboration at the top.

Source: Core Quadrant, 2015

comparison between vendors, enterprises

its own domain. Though their portfolio

must assess their suitability. Each vendor

may appear complete as they may have

approaches the platform strategy from

integrated the acquired pieces and the

their original domain perspective. Hence,

partner products into their platform, it can

a network equipment vendor shall have

still never be ‘apples to apples’ comparison.

strengths in networking, whereas systems’ software player will have strengths in

Moreover, an enterprise platform can never be built using a single vendor

THE DIGITAL LANDSCAPE 2015 & BEYOND

platform. It has to be a mix of platforms from multiple vendors, with one being the key. What’s more important is to assess the suitability and relevance of a vendor’s platform, keeping the reality in mind.

Core Quadrant has identified 11 such

platforms, products or services existing currently in the enterprise?

7. What is the stability of the vendor partnerships (if the platform is an outcome of a consortium’s efforts)?

8. What are the future plans? What

questions to be answered while evaluating

investments may be required in

the ‘suitability’ of a vendor platform for a

the future, and what is the possible

particular need in an enterprise.

evolutionary roadmap of the vendor platform? Will it support

Assessing the Need

long term needs, and what is the

1. What is the current need? Is it tactical

investment required?

or strategic?

2. Is the need at the periphery or at the core of the enterprise digital platform?

3. Where is the need for a vendor

Assessing the Internal Fitment 9. What is the fitment with the current enterprise architecture, and what

platform in the enterprise’s digital

complimentary investments will

platform (process, application,

be required to integrate the vendor

middleware or infrastructure)?

4. What are the alternatives to buying

platform with the existing architecture?

10. What is the enterprise’s past

a converged platform from a

experience of working with that

vendor? Does the enterprise have

vendor? Are there any products or

internal skills to buy best-of-breed

services of the vendor already deployed

technologies separately and create the required functionalities in a cost effective manner?

5. What kind of budget exists? Who all are involved in decision making?

in the enterprise?

11. What is the level of availability of skills around the vendor’s technologies relevant for the platform?

Based on the assessment of the need, the enterprise can decide whether they should

Assessing the Vendor-converged Platforms

really go for a converged platform from an

6. What is the openness of the vendor

the vendor platform and the internal fitment

platform to integrate with other vendor

external vendor or not. The assessment of shall help select the right vendor.

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EXPERT VIEWPOINT

THE DIGITAL ENTERPRISE: A CONTRARIAN VIEW

“

Age is a number,� is what someone remarked when I turned 50 not too long ago from now; but thinking about the technology evolution I feel a few shades younger than a dinosaur!

Imagination is the limit to what can be achieved with technology-enabled solutions offering opportunities for new business cases rather than solving problems of the past.

Conventional business models are seeing massive challenges from the startups while money chases

ARUN GUPTA

differentiated thinking, threatening the old age. It

MANAGING PARTNER & DIRECTOR,

is an exciting world to live in and to contribute to

INGENIUM ADVISORY

the disruptive thinking.

Digital India has captured the imagination of the country; starting late is not a disadvantage, rather it is an opportunity to learn from mistakes that smatter the digital ecosystem of failed projects and passive failures of solutions adding no value to a handful that made it big.

Think tanks and technology experts collectively brainstorming on future-proof architecture have attracted promise of large investments. The citizenry awaits with abated breath the fruits of this labor.

EXPERT VIEWPOINT • What does this imply for enterprises and CIOs who are being challenged with the Digital wave?

• Are you going to be the Chief Digital Officer or another CXO will claim this position?

• Will the CIO be marginalized in this race towards Digital success or survival?

Winners will not be the ones who create the buzz in the short-term, but those who create a sustainable and institutionalized model.

Filtering the noise and loudmouths will be a challenge for companies to address before they embark on the journey. For the enterprise and the individual the answer lies within, in the culture, the leadership and personal goals.

Let’s divide the initiatives into three parts: The first that addresses internal stakeholders, with the second focusing on customers; so where is the third?

“In this confusion, everyone is doing their bit to move a step, hoping that it does take them forward in a direction that matters. CIOs rejoice, you don’t have to clear the fog, as there is no clarity on the other side too.”

I call it nebulous, as the impact is in both camps, though not clearly definable. The third category also generates the most interest with fairytale-like success stories of huge investments and valuations created by 20 something entrepreneurs.

Boardroom discussions attempt to analyze applicability and ruboff, if any, within without the accompanying mindset, skills, or risk ability, deciding to explore some more before taking action.

Dis-intermediated retail stores, taxi operators, telecom companies, leisure/holiday companies - created using a digital foundation create new opportunities for mass participation, thereby, raising the bar higher. 3D printing is frightening manufacturing even in the lab scale, IoT wants to change lifestyles and we are just getting started with driverless cars connecting to traffic systems or the washing

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EXPERT VIEWPOINT

machine deciding which clothes to wash based on your calendar so that you have that favorite party dress ready for Friday night. Is technology controlling your life? Not yet!

• Does social media integration to your customer database, predicting a slew of probable behaviors, make you digital?

• Is addressing customer grievances heard on micro-blogging sites a tick in the right box for digital?

• What about information on fingertips and mobile approvals for busy overworked executives?

• How about enterprise mobility with BYOD and apps for every task?

If no, then what will make my enterprise digital? Where and how do I get started? Unfortunately there is no consensus as yet on what qualifies as a milestone on this journey.

In this confusion, everyone is doing their bit to move a step, hoping that it does take them forward in a direction that is right and that matters.

CIOs rejoice, you don’t have to clear the fog, as there is no clarity on the other side as well. The only advice I can give is don’t sit idle, rather participate, challenge, ideate, contribute to the confusion, take action, which is a lot more than what others are doing inside your enterprise. You will be proclaimed a ‘Digital Leader’ if you ended up hitting a goldmine, else at least, you have failed faster.

About The Author

Mr. Arun Gupta is Managing Partner & Director, Ingenium Advisory. Arun has over 30 years experience in Business Technology, with focus on driving technology and enabling business with improved customer satisfaction while reducing operational IT budgets, and driving change agenda to make organizations globally competitive.

His previous positions include Global CIO of Cipla, Group Chief Technology Officer (CTO) at Shoppers Stop Limited, Director – IT of Philips Electronics India Limited, Senior Director – Business Technology at Pfizer Limited, Vice President – IT for Hughes Telecom, Vice President – IT at DSP Merrill Lynch, as well as leadership roles with DHL and Tata Group Company.

EXPERT VIEWPOINT

CREATING DIGITAL BUSINESS: CHANGE MINDSET BEFORE ANYTHING

I

f I am asked to truly speak my mind in order to demystify the concept of digital enterprise, I would say that it indeed appears to be somewhat mystical,

mainly because the typical way in which the enterprise is described is both: (a) too much about technology and not enough about business value; and (b) often lacks a clear vision or definition of the “digital business” that the “digital enterprise” needs to embrace and nurture.

My definition of the digital business is one that sits at the intersection of Social Media, Mobility (including Geo-spatial), Analytics (including Big Data), Cloud,

HARVEY KOEPPEL

PRESIDENT OF PICTOGRAPHICS INC.

and importantly (and often left out), is happening in ‘real-time’. Digital business is further characterized by one that places the customer in the center of everything, commonly including but not limited to the definition of products and services offered by the enterprise, often developed collaboratively across the ecosystem of customers, partners and stakeholders within which the enterprise lives.

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EXPERT VIEWPOINT Simply stated, we are evolving from a world where we studied product performance history to predict future customer segment buying behavior and made decisions about what to sell to which segments during the next 3 - 6 months, to a world where we look at individual customers (not segments) in real-time and determine what to offer them based upon their individual needs now, not in 3 or 6 months from now.

“The digital enterprise that supports digital business is much flatter and much more driven by facilitated collaboration.”

And we depend upon their relatively instant feedback (both positive and negative) to improve the value of the products and services that we deliver. All of that said, the digital enterprise that supports digital business is much flatter and much more driven by facilitated collaboration as compared to historical enterprise models that have almost entirely been based upon hierarchical command and control structures.

Move Along the C-Suite It is vital that the CIO in a digital enterprise needs to have an equal understanding and appreciation of the marketplace as any of his/her partners across the C-suite. The digital CIO, who is today short on some key skills, must possess strong leadership traits, including the ability to articulate the enterprise vision, and build and motivate the IT team based on creatively leveraging innovative technologies, to enable the enterprise vision.

Certainly, the historical IT drivers of expense management, system performance, reliability, availability, etc. haven’t yet lost their importance.

In fact, they may be more important than ever in today’s time because those objectives form the foundation of superlative customer experience the digital CIO’s mantra.

The big difference is that while earlier the CIOs were focused on those objectives for 90% of their time, they must now hire people who can deliver on the SLAs, KPIs, etc. and free themselves to concentrate on social media strategies, designing better analytics or enhancing the customer experience as a key differentiator for the enterprise.

EXPERT VIEWPOINT In order to break this jinx, the CIOs also need to think like CMOs, which in many enterprises, represents a significant cultural change across the C-suite and throughout the organization. Majority of CIOs until now try to get things done using the influence of either their title, or their authority and/or control on systems. With the changing times, they must now learn to lead and manage horizontally and get things done through influence.

I advise CIOs to take decisions collaboratively than by asserting their authority. Its about time CIOs create an image that is of a trusted leader’s in addition to competent IT managers.

Seven Steps to Glory A typical CIO, ridden with legacy frameworks, working in a not-soprogressive environment, can also strategize a digital enterprise, where one doesn’t already exist, by following the following seven steps: • Hire and train people qualified to run the IT shop to free your time for strategic stuff.

• Spend the time building trusted relationships with C-suite colleagues.

• Educate C-suite on the value of evolving towards digital business and, importantly, the risks of not evolving.

• Offer examples of companies in your industry/marketplace that have succeeded in making the transformation.

• Find resources (external, if required) to ideate and execute a shortterm, inexpensive pilot that demonstrates the value of digital business innovation. Don’t forget, “Start small”.

• Leverage small wins to gain support for more ambitious efforts. Gain the confidence and support to embrace more significant efforts.

• If none of the above works, write your resume.

Your Ladder to Success It’s true that technology is available and will only get more matured and standardized as we move forward. The problem of deploying technology won’t be technology alone. It will be more related to people. It is absolutely critical for a CIO to look at skills - both their own and those of their IT organization. In addition to the skills mentioned above, the IT organization needs to be able to work with their business partners to ensure that a well-balanced governance model is in place that allows for more short-term quick win type projects.

Short-term, low-cost failure should not be punished, long-term expensive failure should be. If you are not taking risks, you are not

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EXPERT VIEWPOINT going to make progress. Risks need to be managed, not avoided and that mentality needs to be an integral part of the enterprise work culture. If risk management is just an IT mindset, it will never work.

“Digital CIOs need to think a lot more like CMOs, which in many enterprises, represents a significant cultural change across the C-suite and throughout the organization.”

Another important aspect is selling ideas to the company’s management or board. There is no ‘one-size-fits-all’ logic while selling digital business (or anything else) to a company’s board. With respect to digital business, some boards are actually frustrated over management’s inability to envision or implement a digital business strategy, and would embrace new thoughts and ideas that bring the company into new and exciting spaces.

Some boards avoid risk rather than manage it and are much tougher to convince. The best approach that I have seen is to first get to know your board members, both as individuals and how they act as a team, and then integrate your digital business strategies and ideas into your board-level presentations. Generate content based upon activities related to suggestion made above (seven steps) and ensure that your points are clear, crisp and concise - a couple of slides maximum.

Most importantly, focus upon business objectives and value, and avoid jargons of any kind – business or technology. Leadership and excellent communication skills are the two most important skills to tap for a CIO. As is standard protocol for dealing with any board, ensure that you have socialized and received approval of the presentation content with your CEO, CFO and any other executives that will be participating with the board.

Industry is witnessing unprecedented opportunities coming its way, like powerful mobile devices, social networks, data analytics, and sensors. But, at the same time, there is a need to adjust the organization to deal with the changing demands.

How can a CIO take the lead in not only helping create these digital propositions but also in creating a better connect with customers, is today’s most pertinent question.

EXPERT VIEWPOINT Without being prescriptive, I’d say, CIOs need to partner with their CMOs to design and deliver impactful social media strategies through which they can articulate the vision and direction of the enterprise and receive feedback from customers on everything - from longer-term vision to the quality of a customer service experience that happened just a few minutes ago.

Once you engage your customers in this fashion you must be prepared to listen and act upon comments and suggestions when they are appropriate.

Even negative experiences can be turned into positive (Wow moments) when companies respond directly to customer needs, especially when the response is in close proximity with the experience.

CIOs should help in creating policies and procedures that bring the strategies to life and affect positive change to the customer experience.

I worked with one package delivery service that monitors Tweets and Facebook posts. When they detect a bad customer experience with their service, their commitment is to have an agent appear in person at the customer’s location within 45 minutes of the time of the post with a plan to resolve whatever the difficulty was about. Not only does that policy and procedure satisfy the immediate concern, the now-satisfied customer is also much more likely to tell the friends and colleagues about the great experience that s/he had with the package delivery company. The company also has the opportunity to identify and fix what could be a systemic issue that is negatively impacting other customers, in a much more timely and likely less expensive manner.

Everybody wins and you have a great story to tell your board!

About The Author

Harvey Koeppel is the president of Pictographics Inc., a management and technology advisory and consulting services firm. The firm has provided executive-level support to the financial services industry since inception in 1979. Harvey recently served as executive director of the Center for CIO Leadership. He set the center’s strategy and directed internal and external operations in support of a global community serving more than 3,400 CIOs and other C-level executives interested in developing the skills required to further leverage enterprise investments in information technology.

From May 2004 through June 2007, Harvey served as the CIO and SVP of Citigroup’s Global Consumer Group (GCG). In that role, Harvey set the strategic direction for the GCG’s operations and technology and actively supported the development and growth of the operations and technology community in support of all GCG products and services, on behalf of 180 million customers located in 54 countries throughout the world.

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EXCLUSIVE INTERVIEW

DIGITAL DISRUPTION: CIOs CAN OUTSOURCE THE FUNDAMENTALS OF SUCCESS

“

Digital disruption is an opportunity for CIOs,” said John Chambers at the beginning of this year in a Wall Street Journal CIO conference.

What he meant by saying this was that the whole digital revolution is so intense that 1/3rd of the corporate leadership won’t make a transition over the next three years. Therefore, it provides an opportunity for CIOs to elevate their roles in companies as technology becomes increasingly

SUSAN CRAMM

FORMER CFO & EXECUTIVE VP AT

central to the business. “It’s a chance for IT to be back in vogue,” he said.

What’s more important for a CIO to understand

CHEVY’S MEXICAN RESTAURANTS

is that the future will respect only “outcomes” and

AND FORMER CIO & SENIOR

not so much the efforts. And to get those positive

DIRECTOR OF FINANCIAL & STRATEGIC

outcomes, Digital Disruption is a must.

PLANNING AT TACO BELL CORP.

How should a CIO help himself first by demystifying the whole digital conundrum to then helping his organization in achieving the business excellence?

In an exclusive interview with Core Quadrant, Susan Cramm, former CFO and Executive VP at

EXCLUSIVE INTERVIEW Chevy’s Mexican Restaurants and former CIO and Senior Director of Financial & Strategic Planning at Taco Bell Corp. gives her cracking thoughts on what she thinks about the digital revolution and how can CIOs align themselves with it. Core Quadrant excerpted the key points from the interview, that are given below: What are your key thoughts on this whole big shift towards Digital? How do you rate the movement of IT from a plain, computing mechanism to a whole new way of servicing customers Digitally?

It may appear like a dramatic shift, and serve the consultants and vendors, to term it so, but I don’t view the focus as a major shift , rather a continual (albeit rapid) evolution in the increasing impact of technology enablement and the importance of technology smarts – in and out of IT.

“CIOs, who are willing to learn, take risks, and reshape their organizations and IT, will be able to create a future that feels very different than the past.”

Technology has always enabled new business models and new operating models across the spectrum. The pace of enablement opportunities is accelerating due to the convergence of technologies that enable data analytics, social linkage, the Internet of Things (IoT), robotics, and ubiquitous and inexpensive computing and mobile/ smart devices, etc.

There is a significant disconnect between the incredible opportunities to exploit technology and the inherent capability residing in the companies to do so.

This increases the risk for established companies of being disrupted by the startups, which are able to gain a great foothold through mass personalization for customers, and do so at a much lower cost, simpler, more advanced technology footprint.

Organizations, who, over the past 10 years have invested in increasing technology smarts with a focus on experimentation and rapid adoption, are better positioned and equipped to prevail and thrive in this increasingly digital world.

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EXCLUSIVE INTERVIEW If that’s the case, the CIOs from older, legacy-ridden organizations should be even more worried for multiple reasons. How do those CIOs change their mindsets? How do their thought processes become Digital rather than just using technology to digitize the production?

Digital is both important and unavoidable, and leaders - across all the professional disciplines - should be playing offense, not defense.

Boardrooms who are speaking a different language than the IT leaders within are going to demand for new leaders to stand up to the challenges of competing in the digital economy.

“CIOs have little options left but to change their mindsets. They can begin doing so by shifting their focus from internal to external – learning from others who are further along.”

CIOs have little options left but to change their mindsets. They can begin doing so by shifting their focus from internal to external – learning from others who are further along and have demonstrated success in the application of digital capabilities.

This new knowledge and perspective shift will bear knowledge in one of two ways. If the CIOs are working within companies where other leaders are looking through digital lenses, their conversations, plans, and initiatives will be conceived with the digital at their core. If the CIOs are working within companies where leaders continue to contemplate layering on digital concepts on analog business and operating models, the new mindset will bear little fruit and they are best served by taking their digital bats and balls and seeking to work for companies where they can collaborate effectively.

To be successful in the new world, CIOs have to themselves dismantle their own monoliths and mindsets. Can you throw some light on how the management and board thinks of IT’s alignment with business and where the CIOs are today? Where’s the gap? How will the gap begin to reduce?

Unfortunately but true, I see a world of “haves” and “have-nots” when it comes to technology enablement. The “haves” started changing

EXCLUSIVE INTERVIEW their perspective about the importance and potential of IT in the late 1990’s and changed their expectations as to the level of technology smarts required in and out of IT. They have IT reporting to the highest levels of management positions in the company because they understand that IT expands the range of opportunities and doesn’t simply react or execute against them. They hold all leaders accountable for conceiving and driving IT-enabled change initiatives. They understand that the 10% of employees in IT cannot “serve up” technology on demand to the remaining 90%, but instead view that technology is a permanent part of everybody’s job description. So, the CIOs have to essentially come in the category of “haves” and think like they think.

Should the new CIO, in quest for creating a Digital Organization, begin relooking at the skill-sets of own people or replace technology?

How can s/he be successful in his/her pursuit to create a holistic digital organization?

The new CIOs should understand that they are an enablement organization – enable the productive conversations about digital opportunities, enable the process to convert ideas into experiential learning, enable infrastructure to promote rather than inhibit experimentation and scaling of capabilities, enable the process of joint creation across the enterprise of digital capabilities, enable the enterprise to learn and grow while reducing the inherent risk of doing so.

The control-oriented mindset of, “we do IT on behalf of the rest of the organization”, has to change and this will require changes in leadership, starting at the top. With changes in leadership will come changes in technology as well.

As a global visionary, where do you see the whole digital momentum heading? What ends will it help businesses achieve and how can CIOs be the key agent of this change?

It has been exciting to be a part of this industry for almost 40 years and to realize that the future is even brighter than that past. I agree with Ray Wang that digital transformation is fundamental to success and cannot be outsourced (even though many of the factors of the transformation may be). CIOs, who are willing to learn, take risks, dream with colleagues, and reshape their organizations and technology, will be able to create a future that feels very different than the past.

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EXPERT VIEWPOINT

CIO REVISITED: WELCOME THE NEW CIO

I

an Cox, an acclaimed CIO advisor and former IT professional, in one of his recent articles on his blog “CIO Leader” asked a very key question:

“Are CIOs running out of time?” In the article, Ian provides an excellent analysis of the current state of the CIO and argues that CIOs are definitely not running out of time, especially if the CIO realizes that the role today is different than it was in years past.

Ian says CIOs need to better understand the new

ERIC D. BROWN

TECHNOLOGY CONSULTANT AND ENTREPRENEUR

role of the CIO and follow a new model.

He writes: In this new model, rather than being the gatekeeper of the technology budget and the provider of all technology used by the business, the new type of CIO and IT function act as brokers, providing advice, guidance and access to the technology required by the rest of the business. It is a far more important and valuable role but it requires a different type of CIO and a different type of IT function.

Emphasis mine.

There are some CIOs out there that have embraced the changing landscape of IT. These CIOs have figured out that their future lies within a collaborative environment with other

EXPERT VIEWPOINT groups within the organization. They’ve realized that groups like Marketing and the Chief Marketing Officer have been increasing their technological knowledge exponentially over the last few years.

They’ve realized that the future of the IT group and their future as CIO lies within their ability to help lead technology solutions within a company without having to ‘own’ that technology or the budget for that technology.

I’ve given these CIOs a new moniker. They are New CIOs. While these CIOs have figured out the future of their role and the IT group is changing, there are many other CIOs who’ve yet to figure it out – or at least have yet to accept that changes are coming (or have already arrived). These second type of CIOs are looking for ways to get their ‘old’ lives back. They’re looking for ways to own all technology budgets, projects and systems and are constantly fighting the CMO and others to regain the control they once had.

Just like the New CIOs, I’ve given this second type of CIO a moniker as well. They are Old CIOs.

“The New CIO can bring more value to an organization than any other part of the business.

As CIO, you can continue doing things the way you used to or you can reimagine your role and the role your team plays within the organization and deliver more value to the business than ever before.”

I know, not very interesting names for either, but stick with me in this journey and you’ll see they are perfect monikers for the two types of thinking. Not only do they perfectly describe the difference between the two types of CIOs I see today but the monikers describe the difference in the types of thinking that is required of CIOs to build the digital organization of the future.

Throughout my career, I’ve generally found myself at the intersection of business strategy and technology. I’ve spent many years working as a consultant to CIOs, CMOs and others within

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EXPERT VIEWPOINT many different types of organizations. I’ve worked with large and small companies and IT groups from one to one thousand people.

Over the course of my career, I’ve watched many companies struggle with technology and technology management. I’ve watched companies languish in the Old way of thinking and I’ve watched companies grow revenues exponentially with new thinking. I’ve watched companies shrink and layoff staff because they just couldn’t move away from Old thinking. I’ve watched other companies grow their technological systems and capabilities while keeping staffing levels fairly constant with New thinking approaches.

I think the New CIO and the New IT group can bring more value to an organization than any other part of the business. As CIO, you can continue doing things the way you used to or you can reimagine your role and the role your team plays within the organization and deliver more value to the business than ever before.

I’ve heard some people say that the IT group (and the CIO) are irrelevant in today’s world. I disagree. The New CIO can make IT and the CIO role more relevant than ever before.

About The Author

Eric D. Brown is a Technology Consultant and Entrepreneur with a focus on using technology and data to solve business problems. Eric’s experience includes working with IT and Marketing groups to integrate technology with marketing initiatives. His main interest areas fall into merger of IT and Marketing with the marketing technology, information technology and big data.

Eric is a Doctor of Science (D.Sc.) in Information systems with a specialization in knowledge management, decision support, social network analysis and natural language processing.

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DIGITAL DYNAMICS

NOTES

DATE & TIME

PROGRESSIVE CHANGE

DIGITAL DYNAMICS OPPORTUNITIES, ALIGNMENTS AND T H E W AY F O R W A R D

The digital landscape is fast evolving. Enterprises are experimenting and innovating, new players are entering the fray and existing players are creating new products and services.

Amid such dynamism, it is essential to map the landscape holistically, from both demand and supply sides. This shall enable the enterprise users to prepare their future digital strategies and the IT players to align their marketing focus.

WWW.DYNAMICCIO.COM

PROGRESSIVE CHANGE

DIGITAL DYNAMICS OPPORTUNITIES, ALIGNMENTS AND THE WAY FORWARD