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Kathy Gibson reports from Gartner Symposium in Cape Town – As digital transformation becomes a reality and organisations around the world move towards the algorithmic economy, the way the consumer and buy technology is changing – and IT suppliers that don’t keep pace with the change may struggle to compete.

Peter Sondergaard, senior vice-president and head of research at Gartner, says that survival in the future is dependent on execution – and there are some characteristics shared by companies geared to succeed.

“A provider needs to understand the bimodality of what is required from the customer,” he says.

“The need to balance offering stable and reliable secure systems at an attractive cost for the mode one organisation – and this doesn’t mean old technology by any means. They need to be able to offer that in a manner that allows organisations to run their existing business.”

At the same time, providers should be looking towards a pay-as-you-go model that addresses the mode two part of the bimodal organisation. “This would be an architecture that fully appreciated the starting point of the consumer with technology,” Sondergaard says.

The successful IT provider needs to be well versed in the characteristics of the industry they serve, and able to bring a new approach on how to architect solutions to their customers.

Some of the large technology providers might battle to make this transition, he adds. “This isn’t because the company leaders don’t understand what’s required, but simply that with large organisations it can be difficult to change.”

The proof point, he adds, is not what executives say, but what the company is actually doing – and quite often the real company strategy can be seen in the sales compensation plan of the individual salespeople.

“Whatever the organisation is selling is always articulated in what the sales people are incentivised on,” Sondergaard says.

He is quick to point out that often large organisations are also subject to regulatory and shareholder scrutiny that startups tend to escape.

“You can’t fault an organisation for having to manage through this situation when they have to respond to investors with a short-term focus. The real danger for short-term change is the investor and the regulator, both of whom operate on the premise that the established is what you have to build on.”