Kathy Gibson is at IDC Directions in Woodmead – Digital transformation is now common practice, and just about every organisation is the world is doing it in some form or another.
In fact, spending on digital transformation is forecast to reach almost $2-trillion within the next five years, says Jonathan Tullett, research manager: IT services at IDC.
Leading enterprises have committed 10% of their two-year ICT budgets to digital transformation, led by companies in the manufacturing, retail and transportation industries, accounting for 50% of buying.
As organisations gear up for digital transformation, they start to shift their focus away from the chief data officer role, with the CEO becoming more involved in technology decisions.
There will be a focus on integration and automation, with APIs directly impacting buying decisions, Tullett points out. Line of business managers start to influence buying decisions, and workforce optimisation becomes a reality.
Underlining all these moves, organisations that are undergoing digital transformation will to formalise their hybrid IT environments.
“Hybrid IT is a formal process,” Tullett explains. A small minority of organisations will commit to long-term platform lock-in, although the 80/20 principle will still apply.
Customers will look for integration, and transparency – and these are the challenges too. “On paper, things are easy to integrate and manage – in reality they are very hard. And this is becoming a key for CIOs.”
Companies that are moving to hybrid IT are starting to swing away form a centralised strategy to co-ordinated diversification. They are starting to make a strategic commitment to multi-cloud environments, together with a deep engagement with managed services and outsourcing.
Hybrid IT will come about with a shift in capital expenditure, with more spending on robotic process automation, orchestration, containerization and analytics, together with a new interest in edge computing.
On-remise software in South Africa is set to grow at about 2% per annum, with software as a service seeing 30,3% growth rates.
Tullett points out that this is not coming off a low base, since cloud is already well entrenched – and will soon overtake on-premise software revenues. “SaaS as a market is already huge, and is likely to accelerate even more as we get the mega cloud data centres opening in this country.”
“We finally have data centres of our very own,” Tullett points out. “Over the next few months, South African enterprise will have access to low latency, top quality data centres. That is very significant. These guys compete very hard, so they are going to push hard. You can expect rapid deployment, aggressive go-to-market and an aggressive approach to partners.”
Companies will have to re-invent themselves, he adds, and many local companies are doing just that.
As we move to mainstream cloud adoption, Tullett points out that cloud revenue will start to realign through integrators and outsourcers.
Hybrid IT is a vital driver, with single-source emerging as a painful blip in the landscape.
The value of local cloud infrastructures lies in sovereignty, localisation and verticalisation, he adds. “Adding that local value is very important.”
Application development will see similar pattern to software buying: on-remise development will see 0,4% growth, with platform as a service (PaaS) applications will enjoy growth of 37,6%.
When it comes to data centre trends, “data bunkers” that address sovereignty, performance bottlenecks and stack lock-in are key drivers for local companies.
Co-location is starting to have an effect on the mid-market as companies in this arena move quickly to get their data centres off-premise, Tullett adds.
Enterprise server and storage spending in South Africa is expected to grow by 5,4%, although infrastructure as a service (IaaS) will see 30.9% spend.
Digital transformation and cost-efficiency are driving enterprise application growth, particularly in the cloud, adds Kieran Frost, research manager at IDC.
He points out that, while the overall compound annual growth rate (CAGR) for enterprise software s 8%, this is split into 31% growth for cloud software and -1% growth for on-premise applications.
At the same time, we are seeing a huge interest in artificial intelligence (AI) and cognitive systems – although spending on these systems is expected to be relatively low over the next years.
Despite this, there are opportunities in partnering on AI solutions, embedding intelligence into applications, and consulting to end user companies looking to deploy AI in their organisations.
Spending in blockchain will start to ramp up in 2019, although companies are still grappling with how to monetise the technology.
During 2019, organisations will show cautious interest in blockchain and will start to formulate use cases, Frost explains.
So, while spending in 2019 is expected to reach just $58,88-milloin ni 2019, it will grow to $261,45-million by 2022.