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The digital transformation is coming, are you prepared?

By Catherine Knowles, Tue 3 Feb 2015
FYI, this story is more than a year old

This is the year of digital transformation for business, fuelled by the Internet of Everything (IoE), according to Kevin Bloch, Cisco Australia and New Zealand chief technology officer.

Bloch says already 38% of technology spend is outside of IT and over the next year, enterprises will spend more than $40 billion globally in designing, implementing and operating the Internet of Things (IoT).

In order to stay relevant, Bloch says it’s important to pay attention to key trends such as data analytics, hybrid cloud, mobility, cybersecurity, industry consolidation and more.

Bolch says, “As oil was to the industrial revolution, data is to the knowledge revolution or the knowledge economy.”

He says data, like oil, requires extraction, harnessing and distillation to become useful.

Data analytics is becoming increasingly important to businesses, however, for faster decision support and automation, data needs to be delivered in real-time and increasingly processed at the network edge, he says.

This requires a network that is intelligent, predictive and secure, thereby enabling the physical and analytical worlds to merge, Bolch says.

“If data is the new oil, mobile is the pipeline. Mobile is facilitating new, exciting user experiences. It is providing new revenue streams for telcos, new channels for business and access to automation for industry,” says Bolch.

The value and potential of your smartphone is closely correlated to the apps, or software, you use, he says.

“As cloud and mobile power ‘next gen’ ICT, the usefulness and potential of software has only just begun.

"But let’s not get too far ahead of ourselves – software, clouds and smartphones still require hardware to run on. As performance and scale escalates, the criticality of hardware will continue,” Bolch says.

He says IT departments will increasingly adopt hybrid clouds and broaden their focus from the app to the workload, which includes everything required to run the app.

Workload containers, policy and orchestration will be key, according to Bolch.

Cost focus will shift from cost per unit of compute or unit of store, to cost per workload, and clouds will become more specialised and/or vertical in particular in government, machine-to-machine and IoT, says Bolch.

Cybersecurity will also become increasingly important. In fact, in this year's CIO survey 75% of respondents expect to increase security spending in 2015, according to Bolch.

“Cybercrimes will continue to be very costly, intrusive, common and require more time to resolve. The industry is moving from a preventative approach to a “before, during and after” approach. Governments will step up enforcement and regulation,” says Bolch.

This year will also be all about the network, he says. With more than 20 billion connected devices by 2018, ethernet will rapidly spread beyond IT and autonomic networking will be necessary to enable the network to support IoE.

“IT and OT (operational technology) will need to scale for the copious amounts of data and SDN and NfV will enable network simplification,” Bolch says.

Along with this, screens and video will become increasingly pervasive and this has implications for content, delivery, messaging, advertising and analytics, he says.

“Streaming is closing in on linear TV and internet video to TV will continue to grow at a rapid pace, increasing fourfold by 2018.

"The sum of all forms of video (TV, video on demand, Internet, and P2P) will constitute about 85% of global consumer traffic by 2018,” says Bolch.

The wearables trend will also take off in 2015, says Bolch. We can expect more pervasive, smarter, smaller, lower power, more powerful wearables. They will enable the ‘quantified self’, ‘persistent identity’ and ‘high-precision’ location sensing.”

This will cause LTE, WebRTC and WiFi innovation to accelerate. For instance, new mobile payment options (led by Apple Pay) will proliferate, that threaten to disrupt the entire payments industry, he says.

A key trend Bolch that will tie the others together is that industry consolidation and adaption will continue ontinue.

Bolch says this year the biggest themes will include larger SPs ingesting other SPs and investing in IT specialists.

Traditional IT vendors will innovate through acquisition, he says. Hadoop and OpenStack players will consolidate. Non-IT companies (such as GE, GM, car manufacturers, watch makers) will acquire technology companies for analytics, wearables, IoT and more.

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