Discover PerformanceHP Software's community for IT leaders // April 2013
How enterprise IT can master the consumer age
IDC Chief Analyst Frank Gens describes a landscape of rapid innovation as IT leaders tackle cloud, mobility, big data and social media.
Much like the PC explosion of the late eighties, enterprise IT is edging toward a period of robust opportunity to innovate—and great danger of sudden obsolescence. Frank Gens, IDC’s senior vice president and chief analyst, says in the mobility chapter of the enterprise 20/20 project that “mobile and cloud are two ends of the same thing, a totally new platform for business and consumer service innovation,” and are “stretching the edge beyond where the PC took us.”
IDC says the “third platform” —after the mainframes/terminals model and the PC’s server-client model—consists of the intersection of mobility, cloud, big data, and social media. In 2013, Gens predicts, the transition to this new platform will accelerate, and enterprises will have to adapt or risk eventual extinction. Discover Performance asked him to discuss his vision for what business on the third platform will look like.
Q: Let’s start with the lay of the land. Where is IT in terms of this transition you describe?
A: We’re sitting at these early years of a 20-year wave of innovation. The last time we were here was the early to mid-1980s, when you last had a group of very disruptive technologies all pop in together—the PC and relational databases and local-area networking and TCP/IP—and people built new architecture solutions on top of that client-server solution. That came together into a new IT-based innovation platform back in the ’80s, and that led to 20 years of innovation. We’re kind of at the same crossroads here.
Today, mobile devices are redefining and stretching the edge beyond where the PC took us. Cloud is redefining the core—instead of a client-server model you have a cloud model—much more scalable, much more cost-efficient, much simpler to deploy and use. And you’ve got the mobile networks connecting the core and the edge at a range where you can be almost anywhere on the planet and you’re connected to the digital world.
With big data and analytics on top of that, and social, it’s high-value overlay technology. But it’s really about new generations of mobile devices connected back to cloud services as the new business and consumer service delivery model. That’s the new foundation for what people will be doing for the next 20 years with IT. There are going to be scale jumps in innovation—new services, new models, new pricing structures, new communities of innovation popping up on top of this platform, which we call the third platform.
Q: What will the third platform bring—what are the changes we’ll see?
A: An explosion in new business and consumer services that take advantage of mobile and cloud technologies. The last 15 years we saw the “proto” third platform—first-generation web, web browsers and PCs. We saw a fairly small number of “as-a-service” enterprises—Google, Amazon, eBay, Facebook. What we’ll see between now and 2020 is almost every enterprise on the planet is going to be creating new services and generating very large portions of their revenue on top of this mobile-cloud platform.
Who will the Google and Amazon of health service delivery be, of entertainment service delivery, of government service delivery? That’s the exciting part for enterprises. IT starts moving out of the data center and into innovation discussions within the enterprise. You’d expect to see 10, 20, 50 percent of revenues for very large companies riding on top of the cloud and mobile.
Q: What does that mean for consumers?
A: We’ll see an amazing explosion in the number and variety of services available to us. What we saw in the last ten years is nothing compared to what we’ll see in the next seven or eight. It’s going to be mind-blowing. Think about education. There’s no question education will be reinvented. Thanks to the cloud and mobile devices, the ability for the best educators in the world to scale out to where they can reach and teach thousands, tens of thousands, millions of students. And students anywhere are going to be able to seek out and find world-class subject matter experts.
One of the defining aspects cloud and mobile enables is scale, the ability to dramatically increase the number of participants who are in a conversation or community at very low marginal cost in a radically simplified way compared to the past. Entrepreneurs and rank-and-file employees in large companies are going to have much broader exposure to many more ideas—it’s a scale-up in access to other people, ideas and information. This will be powerful new grist in the mill of innovation.
Q: So it’s the ability to scale that’s unleashing this new wave of ideas, products and services.
A: Yes. These things are all about scale, community and simplicity. Reaching many more people at much lower cost is helping speed up cycle times for innovation. This is happening at a fraction of the time it would have taken a few years ago.
Q: We always hear talk about smaller businesses using the cloud to scale up. But you’re saying the other direction—scaling down to the consumer—will matter to enterprise-scale businesses.
A: When you talk about Amazon and Google being players in the cloud space, consumerization—that is, building offerings that start with consumer scale, costs and simplicity—is a is a key part of their success in the enterprise. Consumerization plays a major role in mobile devices obviously, but also cloud—the idea that you will be an enterprise-only provider is rapidly becoming obsolete. You need the consumer scale and you also need the consumer user experience to inform your design. Enterprise employees are consumers.
Q: In terms of advising enterprises how to be ready, what do we tell them?
A: For one thing, they need to identify who the market winners among their IT suppliers will be in this new era —looking for that magic intersection of innovation and market share. In addition, Enterprise IT leaders’ radar screen now has to look beyond tradition "enterprise IT," and has to encompass the consumer market. There is no longer an enterprise-only market for most of IT. If vendors are designing for enterprise, the offerings are typically unable to scale to a consumer market. Scale of adoption is the measure of enterprise standards now. And so, enterprise IT standards increasingly should mirror market standards—and more and more of those market standards are coming from the consumer technology world.
Q: Tying it all together, what’s the difference between who will get the third platform, and who won’t?
A: It comes down to your ability to scale, your ability to tap into a community of co-innovators, and your ability to apply IT in new, high-value business and consumer contexts: Can you get closer and closer to problem and solution domains that may have been unreachable in the old model because there was not a mass-market demand for your product, or service? The greater simplicity and much lower marginal cost of the cloud-mobile-social platform lets you reach niches that are willing to pay for the services and information.
The easy part is to imagine the platform itself. Today we know it’s mobile-cloud-social-big data, four things. But the third platform is solidifying. What’s exciting to think about is what will be developed on top of that platform. The platform itself is not the value, it’s what we build on top of it.
For more, read "IDC Predictions 2013: Competing on the Third Platform"(.pdf), then visit HP Software’s ALM page for more on managing applications in a user-centric era.
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