It has been almost 15 years since Silicon Valley in california has seen the current high momentum in innovation, technology and investments, last since during the dot com days in 1999. The successes of social media companies and its impact on business and geo political landscape has made us only imagine further on the impact to the IT industry.
This Industry is transforming into a newer eco system with the increased adoption of Social, Mobile, Big Data and Cloud platforms while the service models (onshore and offshore ) are mature and technological costs are dramatically reduced. What does it mean to IT services providers and IT organizations?
Having been close to various size organizations we at Pluto7.com believe that IT organizations will need to adapt, accelerate growth with new platforms and models or else risk to perish.
There are 5 game changing trends that could redefine the way IT organizations are run.
Subscription Led world: The customer purchasing less on premise licenses. Customers (CIO’s) are reducing on premise license purchase and increasing cloud services purchase as subscription. The more the customer purchasing on cloud, less money spent on bug fixes, testing, support and maintenance.
Cloud Driven: Cloud services are more reliable for speed and performance in many cases compared to on premise these days. Amazon web services offer elastic cloud sigh very high level of assurance on security, performance and reliability. Even your local IT department cannot provide comparable services.
Service companies reinventing themselves: Large IT companies are adopting more of creating domain expertise and solutions. E.g. Cognizant is well known for their vertical centric growth strategy. Many of smaller solution vendors will evolve over the coming years.
Customer looking for Simpler ways to do Business : Everything that a client wants or an IT organization is attempting to provide is aimed towards ease of doing business. Cloud is leading to a lot of ease of doing business while the business focuses on the functionality and not how many bug fixes exists in their system.
Software Product Vendors changing their game : Salesforce1, SAP Hana Platform enabled on cloud and such regular updates we receive in market is indicating the trends listed above and how it impacts these software vendors.
In summary, between 2014-2015, we can expect a lot of consolidation of services to simplify the offering for the end clients. We expect some killer solutions to evolve in the market that will disrupt the IT traditional offerings and ERP installations. Some of the trends with cloud, mobile and social are irreversible, which only means that IT organization that adopt these faster than their competitors will be seen as providing value to business or else continue to be seen as cost centers.