4. Reengineering enterprise IT
The now-cliched “software is eating the world” mantra trivializes something quite profound: the role of IT is shifting from “support the business” to “be the business.” The ongoing digitization of products and services means enterprise IT is the new factory (i.e., the manufacturing capability that turns out what the company markets and sells). And, just as many US manufacturing firms in the 1970s and 80s came under relentless pressure from new competitors – think Detroit car firms facing the onslaught of Japanese brands – so too will enterprise IT organizations find themselves encountering highly efficient technology organizations that threaten the established firms.
It’s important to remember that Japanese manufacturers arrived with more than a different form factor – small cars that used less gas than the standard American gas guzzlers. The Japanese implemented an entirely different manufacturing approach (pioneered, in a kind of bitter irony, by an American quality guru, W. Edwards Deming).
The net result of this was that Japanese cars were higher-quality, lower-cost and made their manufacturers boatloads of money. The entry of the Japanese car manufacturers changed the playing field for carmakers forever; from the mid-70’s on, if you wanted to be a major car company, you had to meet raised consumer expectations – or go out of business. Detroit struggled for years and finally emerged capable of building cars that matched the Japanese on a quality level, but by the time that occurred over 50% of their market share had vaporized, never to be recovered.
Enterprise IT groups are now being assailed by the same sort of challenge. Companies like Airbnb and Netflix have developed new kinds of organizations, processes, and tooling, and have transformed the world of IT. Instead of once- or twice-a-year releases, these new model companies release once or twice an hour.
CEOs of mainstream companies are looking at their IT organizations and presenting an ultimatum: get good or get out. This year will see IT organizations confronted by the need to transform their performance by reengineering themselves.
Expect to see organizational anguish as those CEO ultimatums get passed down to individuals and groups within IT. The pressure to improve will be relentless, and the penalty for failure will be extreme.
This year will see enterprise IT groups desperately try and figure out how to break down organizational silos and implement DevOps. There will a search for new tools and processes capable of accelerating application delivery. IT organizations will seek to emulate cloud-native companies and come to recognize how much work it requires to achieve continuous integration and delivery – but they’ll redouble their efforts to move toward their capabilities, driven by the awareness that there is no acceptable alternative.
5. Containers emerge as the future of applications
One of the biggest roadblocks for enterprise IT groups to achieve cloud-native capabilities is the primary execution environment they use – virtual machines. That’s not to say you can’t realize a streamlined application lifecycle using virtual machines; after all, companies like Amazon, Uber and Pinterest accomplish this, thank you very much.
[Related: 6 CRM predictions for 2016]
It’s just that most enterprise IT groups treat virtual machines like physical machines, and manage them with legacy processes that repeatedly rebuild them at every step in the application lifecycle.
The new standard for application execution environments is containers, and they will revolutionize the practices of enterprise IT. Containers are much more easily migrated among groups and facilitate continuous delivery. I expect to see containers emerge as the foundation for enterprise IT reengineering efforts, once it becomes clear that attempting to accelerate application delivery timeframes is impossible if every group begins by rebuilding virtual machines and installing application components.
There are other advantages to containers, too. For one, they are much lighter weight than virtual machines, which raises hardware utilization rates and improves economics. For another, they start much more quickly than virtual machines. Rapid instantiation supports the elastic characteristics of cloud-native applications, which commonly experience highly erratic workloads.
This year will see not the replacement of virtual machines by containers, but the growing awareness that any future plans for enterprise application must assume containers as the default execution environment. Attempting to achieve the kinds of enormous changes necessary to become cloud-native is simply impossible with typical virtual machine use.
In conclusion, 2016 is the year that I expect to see the implications of what has been happening over the past few years to become starkly obvious. The attempts to incrementally improve enterprise IT with cloud-washed offerings from vendors who collude with staff to continue traditional practices will be exposed as the failure they are. This year will witness a recognition on the part of companies – if not their IT organizations – that incremental improvement just won’t cut it. Far more serious measures are required, and when IT groups begin grappling with how to implement those … well, expect monumental disruption. Over the course of the year, new solutions that take a root-and-branch approach to change will become preferred, and beware IT leaders or personnel who attempt to evade embracing those solutions.
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