Business savvy techies will blur C-suite boundaries
The phrase ‘all companies are software companies’ has become a prominent buzz-phrase over the last few years, but 2017 was the year when businesses really took this notion on board. Companies of all shapes and sizes turned to technology to optimise their operations, enable innovation and compete with new entrants.
Automation and artificial intelligence (AI) have both been central to this shift. By automating the more basic business functions, employees can focus on solving more complex problems. From a development point of view, this means concentrating efforts higher up the stack and adding real value to the business.
This is a trend that will certainly continue into 2018 and, as a result, a different mix of skills will be required at the c-suite level. Smart, tech aware people will continue to be needed, but they will also have to be commercially astute to solve technical challenges, whilst understanding how everything fits into the bigger business picture.
The successful companies of the future will be the ones that are not only able to recruit or upskill the correct mix of tech and commercial skills, but also ensure that technology is being consumed in the right model for their business.
That’s why businesses will need to be led by people who can understand where (and how) it makes sense to use technology, but who also have a sharp eye on the overall business drivers. Those who possess a combination of these skills will have a seat at the boardroom table.
Digital disaster awaits
Technological giants have a huge influence on the world. They have the power to shape attitudes, change behavioural patterns and even inspire revolutions.
With this power, these companies (including giants such as Google, Facebook, Amazon, Twitter, etc…) are now taking on more responsibility for self regulating their platforms. We’ve already seen examples of moments where the power of technology and the digital reach of these corporations has been abused by the unscrupulous, sometimes to harmful effect. In many regards 2017 was a year of Fake News and in 2018 the tech giants will continue to work to counter this knowing that if they don’t, Governments may do it for them
The erosion of Amazon’s rule
Amazon Web Services (AWS) is undoubtedly the king of the cloud infrastructure market, generating 45% growth in Q3 2017 and posting a massive $4.8 billion in revenue to maintain its significant advantage over the likes of Microsoft Azure and the Google Cloud Platform (GCP).
However, despite this hugely impressive performance, we believe the industry is set for change. AWS is known as being an innovator – and rightly so – but while this presents opportunities for customers, it also presents some serious risks as Amazon continues to extend its reach into new markets. Banks, for example, are migrating more services to the AWS platform whilst knowing that Amazon could quickly launch a consumer bank or currency of its own and become a competitor.
The same is true for retail. Walmart, for example, has publicly told its partners to steer clear of using AWS to host their cloud apps following Amazon’s $13.7bn purchase of luxury grocery chain Whole Foods Market. The approach of ‘eating customers’ business models’ could start to translate into a loss of market share and the erosion of Amazon’s current advantage.
Customers will look to smaller, more niche providers, or other leading players that are much less likely to become serious competitors. Microsoft is a prime example. Azure is quickly proving a credible alternative to AWS because of its well-built ecosystem and reach into enterprise, and the fact that, in comparison to Amazon, customers are simply more confident in the future of Microsoft’s business.
Serverless business could be only five years away
Serverless computing – meaning that businesses can build and run applications with third-party management which executes code only when needed, scales automatically and only charges when the code is running – is swiftly becoming a viable choice for business IT workloads.
Over the last 10 years, development in IT has seen various layers of abstraction on top of hardware to innovate at scale. Virtualisation to run multiple different apps on a single platform, cloud to virtualise the network storage, containers to spray applications across different clouds without worrying about how things are connected and managed. Serverless is the ultimate layer of abstraction – write code, define a function, execute and get a return.
The issue is that while using a third-party, such as AWS Lambda is quick to develop a function, not everyone is ready for it. Embracing serverless requires a very different way of thinking, because it’s effectively outsourcing whole pieces of infrastructure – in fact, everything apart from the app itself.
Aside from the fact that many companies are taking their IT guidance, and in some cases onsite support, to provide planning, deploying and manage infrastructure, there are some clear challenges to adoption, including portability of the applications, predictability of service and liability for failures.
Although there’s a nervousness around the amount of IT infrastructure that is outsourced and a common misconception that just because companies can build, they should build, outsourcing will continue to increase in 2018. Building infrastructure that works and building infrastructure that really makes a difference to the business are two entirely different things.
Private Cloud - now part of a hybrid strategy
For years now businesses have seen innovation as the nirvana which drives business success. For some it is – previous industry goliaths have been disrupted by forward-thinking upstarts which has transformed consumer expectations. However, for every Uber there are hundreds of businesses which fail to spend the necessary time and resources producing and executing an innovation strategy. These failed projects are one reason so many organisations find themselves looking to cut costs as we move into 2018.
One way businesses will look to transform IT spending is to look at their approach to infrastructure. It’s become the norm for enterprise to use private cloud platforms, taking advantage of the agility and scalability of cloud computing, while increasing data security. However, as public cloud has evolved, and with GDPR set to enforce stringent data security measures on providers, the case for choosing private over public cloud infrastructure will begin to dwindle next year. In fact, in ten years the case for businesses running solely on private cloud could be wafer-thin, if not non-existent.
Look at the financial services industry for example. Traditionally, banks and wealth management firms would spend heavily on innovation to buy their way out of trouble. Once one high street bank has an app, it becomes a key differentiator and the rest outsource to close the gap. However, with the rise of the fintech movement this isn’t an option as industry innovation is now continuous. So, banks need to reset the cost management of their IT infrastructure, while focusing on innovation simultaneously, moving more processes into the public cloud, which a few years ago would’ve been unthinkable. However, as data security has improved and public cloud provides greater flexibility to innovate, a hybrid cloud model will soon be the platform of choice. In 10 years, no business, regardless of size or sector, will be operating a solely private cloud.
While the trends mentioned here are not the only ones that will be developing in the near future, each one has the capacity to affect the industry massively (for better or worse). At Canonical, we feel ready to meet head on the challenges that these trends will inevitably bring – we are confident that our innovation and creativity will help us through whatever 2018 has to offer.
