Private and Public Cloud Workloads - Pure Storage...• Private cloud (on-premises and hosted) is currently the primary workload execution venue for 27% of organizations, expanding

Q1 2019ADVISORY

REPORT

Digital PulseWORKLOADS AND KEY PROJECTS

www.451Research.com ©2019 451 Research, LLC

Combining 451 Research’s industry-leading analysis with insights from our extensive community of mid-level and senior IT and line-of-business professionals, Voice of the Enterprise: Digital Pulse provides a broad, integrated view of enterprise IT strategies related to current and future workload placement trends.

Melanie PoseyResearch Vice President - Voice of the Enterprise,

Cloud Transformation

DIGITAL PULSE | Q1 2019

© C O P Y R I G H T 2 0 1 9 4 5 1 R E S E A R C H . A L L R I G H T S R E S E R V E D .

VOICE OF THE ENTERPRISE

Digital PulseVoice of the Enterprise: Digital Pulse provides you with actionable data and insight on enterprise IT strategies related to current and future workload placement trends.

Combining 451 Research’s industry-leading analysis with insights from our extensive community of mid-level and senior IT professionals, Voice of the Enterprise: Digital Pulse, Workloads & Key Projects provides a view into IT environments and workload placement decisions.

This research includes comprehensive, survey-driven analyst reports with customizable data deliverables. This Voice of the Enterprise: Digital Pulse, Workloads & Key Projects survey wave was completed during January, February and March of 2019.

Product features

Approximately 1,000 completes from pre-qualified IT decision-makers. Delivered quarterly, this research provides comprehensive, survey-driven analyst reports with customizable data deliverables.

Sampling that is representative of small, midsize and large enterprises in private and public sectors.

Individual conversations quarterly with leading-edge senior IT executives, providing a ‘narrative’ view of the market.

Data-driven deliverables for fast access and ability to perform segmentation work.

2



The 451 TakeDirection of workload travel: Off-premises and to the cloud(s). The transition continues as organizations’ IT environments drift toward the cloud and off-premises. Both public and private clouds feature prominently as workload deployment venues (with on-premises environment remaining in the mix), highlighting the importance of hybrid/multi-cloud IT strategies and vendor solutions to support them.

Increasing interest in invisible infrastructure and consumption-based business functionality is particularly evident in the positioning of SaaS as a workload execution venue. While smaller organizations with fewer than 1,000 employees remain the most enthusiastic SaaS cohort, larger organizations are finding their way to SaaS for mission-critical business functionality, such as ERP and CRM.

A plurality of organizations will continue to run ‘big software’ (i.e., business-critical functionality, such as Oracle and SAP) in on-premises IT environments managed by internal staff, but SaaS and remotely managed ‘as a service’ infrastructures are emerging as key consumption models, chipping away at traditional on-premises deployment and cutting into the growth of the self-managed IaaS/public cloud approach.

As hybrid/multi-cloud evolves from being an IT state that ‘just happens’ to an explicit IT strategy, multiple approaches to addressing technical debt and modernizing mission-critical applications are in play. ‘Modernization in-place’ remains primary approach to upgrading/refreshing legacy applications, but ‘refactor and shift’ is gaining momentum as organizations look to leverage cloud providers’ cloud-native tools and functionality for a more cloud-first approach to application modernization.

Current US government trade policies are having an impact on organizations’ IT strategies, with the most acute effects being felt by the manufacturing sector and organizations that are tech leaders (early adopters of new technology) and digital transformation leaders.

3



• On-premises environments (traditional and private cloud, as well as third-party colocation) represent the primary workload execution venue for a shrinking percentage of organizations – from 68% in 2019 to 46% by 2021.

• Private cloud (on-premises and hosted) is currently the primary workload execution venue for 27% of organizations, expanding to 34% by 2021.

• However, public cloud is extending its reach at a more rapid pace, slated to be the primary deployment venue for 39% of organizations by 2021, up from 22% currently.

• Modernization in-place (maintaining workloads on-premises but updating the infrastructure and modernizing the application architecture) continues to be the single most common model for mission-critical legacy workload refreshes (35% of organizations), but the refactor-and-shift approach (24% of organization) saw expansion in 2019.

• Big Software – Oracle: The traditional on-premises/self-managed approach prevails for a plurality of organizations using Oracle ERP and CRM. Oracle’s own IT environments are gaining momentum, with 31% of CRM users currently deploying in SaaS and remotely managed on-premises cloud infrastructure environments (increasing to 44% in 2021) and 19% of ERP users currently doing the same (rising to 36% by 2021).

• Big Software – SAP: The primary execution venues for SAP ERP and CRM remain on-premises IT environments; however, SaaS and IaaS are key migration destinations for both ERP and CRM. Managed service providers expand as an execution venue for CRM (from 16% of organizations currently to 23% by 2021).

Summary of findings

4

D I G I TA L P U L S E | Q 1 2 0 1 9

Direction of Travel for Workload and

Application Venues: To the Clouds

5



Q. Thinking about all of your organization’s workloads/applications, where are the majority of these currently deployed?

44% of organizations currently deploy the majority of their workloads in off-premises IT environments

plan to take a refactor and shift approach to mission-critical legacy applications

cite marketing/sales as key non-IT roles with significant influence on application/workload deployment strategy

of EMEA respondents are majority off-premises IT organizations

identify cost management and tracking as a top-three IT workloads challenge

of smaller respondents (<1,000 employees) run the majority of IT environments off premises

33%allocate more than half of their IT budgets to growth/transformation projects

26%

56%

31%

24%

50%

Off-Premises IT Organizations’ Approach to Workloads

6



Q. Which of the following represents the most important workload-related IT challenges your organization faces at the moment?

3%

21%

23%

23%

23%

25%

31%

37%

60%

Other

Visibility across different IT environments

Cost tracking/management

Lack of workload-specific staff/expertise

Ongoing capacity planning

Incorporating new workloads into existing IT environment

Migrating workloads to new IT environments

Governance and compliance

Data protection and security

IT WORKLOAD MANAGEMENT CHALLENGES% of respondents (n=921)

Financial sector: Above average

Government/education: Above average

Healthcare sector: Above average

Data Protection and Data Security Emerge as the Most Challenging Aspects of Workload Management

7



Hybrid/multi-cloud, the de facto standard IT architecture of the digital era, highlights the increasing complexity of managing diverse IT on-premises and off-premises environments and accommodating multiple application development/deployment approaches (e.g., VMs, containers, serverless).

Unsurprisingly, unified IT management is a top-of-mind issue, with 85% of organizations considering it a very or somewhat important element in supporting their IT environments. Drill-down segmentation analysis reveals pockets of extreme focus on unified IT management:

• Organizations outside North America ascribe somewhat greater importance to unified management, with 59% of EMEA-headquartered respondents pointing to unified IT management systems as being very important to supporting workloads across on-premises and off-premises environments.

• On the vertical front, 67% of organizations in the government/education sector deemed unified IT management as very important, compared with 36% of retail industry respondents.

• Early technology adopters (tech leaders) are more convinced of the importance of unified IT management than their tech laggard counterparts, with 67% of early adopters in the very important camp, versus 44% of late adopters.

Q. How important is having a unified IT management system that can support your organization’s workloads across on-premises and off-premises environments?

4%11%

36%

49%

IMPORTANCE OF UNIFIED MANAGEMENT% of respondents (n=874)

Not at all important

Not very importantSomewhat importantVery important

The Vast Majority of Organizations Acknowledge the Importance of Unified IT Management Systems for Workloads Across On-Premises and Off-Premises Environments

8



PRIMARY WORKLOAD DEPLOYMENT VENUE, 2019 AND 2021% of respondents (all workloads)

39%

16%

18%

19%

9%

15%

12%

11%

9%

19%

13%21%

2019 2021(n=885) (n=849)

SaaS

IaaS/PaaS

Third-party colocation

Hosted private cloud

On-premises private cloud

On-premises 'traditional' IT

Private Cloud

Public CloudKey venue for 22% of organizations, expanding to 39%

Primary workload venue for 27% of organizations, growing to 34%

SaaS is rising – invisible infrastructure, consumption-based business functionality. The percentage of organizations with most of their workloads currently in SaaS environments increased to 13% in the first half of 2019 (compared with 9% in the first half of 2018).

Smaller organizations with fewer than 1,000 employees remain the most enthusiastic SaaS consumers, with 21% reporting that SaaS is the IT environment for the majority of their workloads (compared with 7% for larger companies), rising to 28% in two years (compared with 16% of larger organizations with more than 1,000 employees).

Digital transformation status has little impact on the importance of SaaS as a workload execution environment – similar proportions of leaders and laggards cite SaaS as the deployment venue for a majority of their workloads.

IaaS/PaaS expands and takes root. IaaS/PaaS as the primary workload environment expands most markedly among organizations in the finance sector (3% currently have the majority of their workloads in IaaS/PaaS venues, compared with 19% in 2021); retail (9% in 2019, 26% in 2021) and digital transformation leaders (12% in 2019, 26% in 2021).

On-premises and hosted private clouds remain in the mix. Private cloud environments play a key role for organizations with security and data locality concerns that sit alongside the usual capex amortization considerations driving toward a modernization-in-place approach. Q. Thinking about all of your organization’s workloads/applications, where are the majority of these currently deployed?

Q. And thinking about all of your organization’s workloads/applications, where will the majority of these be deployed two years from now?

Direction of Workload Travel: Primarily Off-Premises and to the Cloud

9

“Deciding where workloads wi l l be deployed] is a combination of people from the operations, from the DevOps team, from the security team, from the technology off ice, and the CIO’s off ice.”

M I D - L E V E L M A N AG E M E N T 5 0 , 0 0 0 - 9 9 , 9 9 9 e m p l o y e e s

$ 1 0 b n + r e v e n u e , m a n u f a c t u r i n g

“ [ In addit ion to cost , for c loud] the other factors we would consider is i f [ the workload] requires customization or i t ’s just [commercial off the shelf (COTS)] . . . I f i t ’s [COTS] , we can move it there [to cloud] without any problem. If we do a lot of customization and stuff, i t ’s not worth our t ime because then we’re going to have to bui ld everything…”

I T / E N G I N E E R I N G M A N AG E R S & S TA F F 1 , 0 0 0 - 1 , 9 9 9 e m p l o y e e s

$ 1 b n - $ 2 . 4 9 b n r e v e n u e , e n e r g y & u t i l i t i e s

“ [Budget model may determine workload location as] some business units may have an opex reduction target so we would go with inside the datacenter to capital ize on that model . Some people might want a total cost of ownership reduction, we might move capital ize or ful ly depreciat ive environment into the cloud so that to avoid a major unexpected spend.”

M I D - L E V E L M A N AG E M E N T 1 0 0 , 0 0 0 + e m p l o y e e s

$ 1 0 b n + r e v e n u e , c o n s u m e r r e t a i l p r o d u c t s & s e r v i c e s

Workload Placement: Decisions, Decisions…



Now that hybrid/multi-cloud is shifting from a state of IT affairs that ‘just happens’ to an explicit IT strategy, organizations are addressing technical debt with various approaches toward mission-critical application modernization.

Modernization in-place: Keeping the workloads on-premises but updating the infrastructure and modernizing the application architecture remains the single most common model (35% of respondents), particularly among organizations in the communications/media/publishing (45%) and healthcare (42%) sectors.

• Given that economics (leverage of existing investments) is one of the top drivers of the modernization-in-place approach, this model may well be a solution that will not endure beyond the next upgrade/refresh cycle. In 2018, 44% of respondents cited modernize in place as the primary approach, indicating that this model may represent the path of least resistance.

• Organizations in finance highlight application dependencies and industry compliance, while those in retail prioritize application performance optimization and data locality control.

Refactor and shift. Cloud-native redesign of existing applications and off-premises cloud deployment is the modernization model of choice for 24% of organizations. This model is also the go-to approach for respondents in the telecommunications and information technology sectors.

Lift and shift/SaaS replacement. The prevalence of these models as the overall mission-critical modernization approach is relatively evenly distributed across company size, industry and digital transformation status vectors.

11%

12%

14%

18%

44%

9%

17%

16%

24%

35%

Retain. Keep current applications unchanged on existing

on-premises infrastructure

Lift and shift. Migrate apps to off-premises/cloud environments

with minimal code modification

Repurchase and shift. Replace current apps with SaaS/hosted versions

Refactor and shift. Re-architect using cloud-native frameworks and

deploy in off-premises cloud

Modernize in-place. Retain on-premises and update to

modern app architecture

STRATEGIES FOR MISSION-CRITICAL LEGACY WORKLOADS % of respondents

2019 (n=881)

2018 (n=1,049)

5%

28%

29%

36%

37%

46%

47%

Other

Compliance with industry regulations

Optimize application performance/uptime

Data locality/sovereignty

Application dependencies with on-premises IT elements

Ensure data/system security

Leverage existing IT infrastructure/datacenter investments

'MODERNIZATION IN-PLACE' DRIVERS

% of respondents with a 'modernize' approach to existing mission-critical applications (n=298)

The 35% of 2019 respondents reporting plans to modernize in-place offer these reasons.

Q. Which of the following best describes your organization’s overall IT infrastructure approach to mission-critical legacy applications and workloads going forward?

Q. You’ve indicated that your organization plans to modernize existing critical workloads/applications on-premises. What are the most important reasons for this choice?

Dealing With Mission-Critical Legacy Applications: Multiple Approaches, but Modernization in Place Comes Out on Top

1 1

“ If I have a host virtual machine, a host server on-premise, and it ’s running the appl icat ion today, i f I l i fted and shifted out to the cloud as infrastructure as a service, I ’m now actual ly decommissioning that physical box. So in fact , I ’m now paying double. I t ’s only when you’re up against total equipment refresh, or i f you are greenfield for a new appl icat ion, that ’s what i t makes sense to land this thing in the cloud database or from day one. So a lot of l i ft and shift , unless you are about to refresh a lot of your infrastructure where you’re avoiding buying more or buying new, often it doesn’t make sense.”

M I D - L E V E L M A N AG E M E N T 1 , 0 0 0 - 1 , 9 9 9 e m p l o y e e s

$ 1 b n - $ 2 . 4 9 b n r e v e n u e , f i n a n c i a l s e r v i c e s

“Our tradit ional business is on-premise. For instance, historical ly, the [equipment] had to be close to the network, had to be close to the database service… That wi l l stay on-premise for certain s ignif icant amount of t ime… [The machines] are very expensive… You are not going to throw them away… [And a machine that] speaks only TCP/IP and so is latency dependent, then we cannot real ly move it to the cloud. I t ’s going there but i t wi l l take t ime. It ’s a s low process. This is very conservative industry.”


$ 5 b n - $ 9 . 9 9 b n r e v e n u e , h e a l t h c a r e

“ [Some] appl icat ions do often remain on premise. The f irst reason is because the appl icat ion vendor or the appl icat ion provider doesn’t yet ful ly understand the capabi l i t ies or the propert ies of c loud, especial ly with things l ike infrastructure as a service. They are very paranoid or afraid or r isk-averse of the cloud vendor gett ing hold of their intel lectual property. Meaning either their source code [or their ] executable or being able to reverse architect , any of their intel lectual property. So that ’s their own immaturity when it comes to cloud.”

M I D - L E V E L M A N AG E M E N T 1 , 0 0 0 - 1 , 9 9 9 e m p l o y e e s

$ 1 b n - $ 2 . 4 9 b n r e v e n u e , f i n a n c i a l s e r v i c e s

On-Premises IT Still in the Mix, but Not Necessarily by Choice

D I G I TA L P U L S E | Q 1 2 0 1 9

Big Software (Oracle and SAP)

Workload Deployment Trends

1 3



60%

34%

13%

15%

11%

25%

8%

11%

6%13%

2% 2%

2019 (n=105)

2021 (n=96)

PRIMARY WORKLOAD DEPLOYMENT VENUES FOR ORACLE ERP, 2019 AND 2021% of respondents using Oracle for ERP

Other

Public cloud/IaaS

Cloud infrastructure operated by software vendor

SaaS environment operated by the software vendor

Managed hosting environment (MSP/ IT outsourcer)

On-premises IT environment operated by internal IT staff

The off-premises shift for Oracle ERP keeps nearly one-third of organizations’ environments in the family (Oracle SaaS or on Oracle cloud infrastructure).

Q. Thinking specifically about your organization’s Oracle ERP workloads, which of the following best describes the primary IT environment in which these are currently deployed?

Q. Thinking specifically about your organization’s Oracle ERP workloads, which of the following best describes the primary IT environment in which these will be deployed two years from now?

Oracle ERP: On-Premises IT Environments Remain the Primary Venue, but SaaS Gains Momentum

14



Q. Thinking specifically about your organization’s Oracle CRM workloads, which of the following best describes the primary IT environment in which these are currently deployed?

Q. Thinking specifically about your organization’s Oracle CRM workloads, which of the following best describes the primary IT environment in which these will be deployed two years from now?

53%

29%

18%

25%

13%

16%

11%

14%

5%16%

2019 (n=55)

2021(n=51)

PRIMARY WORKLOAD DEPLOYMENT VENUES FOR ORACLE CRM, 2019 AND 2021% of respondents using Oracle for CRM

Public cloud/IaaS

Managed hosting (MSP/ IT outsourcer)

Cloud infrastructure operated by software vendor

SaaS operated by the software vendor

On-premises IT oerated by internal IT staff

By 2021, more than 40% of organizations’ primary execution venue for Oracle CRM will be Oracle SaaS or Oracle cloud infrastructure.

Oracle CRM: SaaS and Public Cloud IaaS Make Gains at the Expense of On-Premises IT Environments

1 5

“We are a fair ly big Oracle shop. They had been nagging us to move to the cloud, but we have very stubbornly pushed back on that because some of the very, very sensit ive data rel ies on some of these master databases of that part icular system and we are very, very wary in terms of even though there may be 200% assurance from the security, encryption, this , that .”


$ 1 0 b n + r e v e n u e , m a n u f a c t u r i n g

“ [Maybe departments] were running Oracle, different versions. So we said, “Okay. Now, were going to standardize. We’re going to have a Platform as a Service, and you’ l l have two choices, chocolate or vani l la . We’ l l keep maybe one version back. And the migrat ion process, which is not easy - we’ l l make sure that you’re on one of our standard versions, with the one back that we’ l l maintain. And start to standardize the stack.”


$ 2 . 5 b n - $ 4 . 9 9 b n r e v e n u e , f i n a n c i a l s e r v i c e s

“Oracle has got a great cloud. I f you want to run an Oracle workload, what better place than to run it in Oracle? Obviously, i t ’s st i l l expensive. But I ’ve been in customer environments where the site l icense cost , the amount of Oracle database workloads that they were running, i t was far cheaper to run that internal ly than it was for them to try to run that in a publ ic c loud.”

I T / E N G I N E E R I N G M A N AG E R S & S TA F F 2 5 0 - 4 9 9 e m p l o y e e s

$ 5 0 0 m - $ 9 9 9 . 9 9 m , s o f t w a r e , I T & c o m p u t e r s e r v i c e s

Perspectives on Oracle



61%

38%

20%

19%

11%

19%

5%

17%

3% 5%

1% 2%

2019(n=114)

2021(n=104)

PRIMARY WORKLOAD DEPLOYMENT VENUES FOR SAP ERP, 2019 AND 2021% of respondents using SAP for ERP

OtherCloud infrastructure operated by software vendor

Public cloud/IaaS



On-premises IT operated by internal IT staff

Q. Thinking specifically about your organization’s SAP ERP workloads, which of the following best describes the primary IT environment in which these are currently deployed?

Q. Thinking specifically about your organization’s SAP ERP workloads, which of the following best describes the primary IT environment in which these will be deployed two years from now?

SAP ERP: On-Premises IT Environments Maintain Position as Primary Deployment Venue, but IaaS and SaaS Make Inroads

17



Q. Thinking specifically about your organization’s SAP CRM workloads, which of the following best describes the primary IT environment in which these are currently deployed?

Q. Thinking specifically about your organization’s SAP CRM workloads, which of the following best describes the primary IT environment in which these will be deployed two years from now?

SAP CRM: Primary Execution Venue Remains Largely On-Premises, With Migration Spread Evenly Among SaaS, IaaS and Managed Hosting

65%

44%

16%

23%

9%

15%

6%11%

4% 5%

0% 2%

2019(n=68)

2021(n=61)

PRIMARY WORKLOAD DEPLOYMENT VENUES FOR SAP CRM, 2019 AND 2021 % of respondents using SAP for CRM

OtherCloud infrastructure operated by software vendor

Public cloud/IaaS



On-premises IT operated by internal IT staff

18

“Publ ic c loud [ is] far better than our pr ivate cloud capabi l i ty, [offer ing us the abi l i ty to] turn something up and then turn it down, especial ly making mistakes or evolving the siz ing of something. . . We don’t have the same types of capacity that Amazon does… [ l ike] specialty hardware. Specif ical ly, we use SAP HANA. We don’t have any of our own HANA cert if ied hardware, whereas Amazon has a large capacity of i t , so we tend to put al l HANA in the cloud.”

I T / E N G I N E E R I N G M A N AG E R S & S TA F F 1 0 , 0 0 0 - 4 9 , 9 9 9 e m p l o y e e s

$ 2 . 5 b n - $ 4 . 9 9 b n r e v e n u e , c o n s u m e r r e t a i l p r o d u c t s & s e r v i c e s

“Right now, the SAP environment, they can’t move. . . because of a l l the customization that they have local ly… The majority of the suites are on-site with the exception of more l ike the Off ice stuff and some one-off stuff. But the larger stuff is on prem.”


$ 1 b n - $ 2 . 4 9 b n r e v e n u e , e n e r g y & u t i l i t i e s

Perspectives on SAP

D I G I TA L P U L S E | Q 1 2 0 1 9

Workload and Application Deployment Decision-Making: Who

Makes the Call?

20



Decisions about new application placement generally involve business-oriented digital transformation initiatives or IT modernization projects – both of which require high levels of IT and line-of-business (LOB) coordination.

Decision-making approaches to new application deployment are broadly similar across respondents, but in some cases, certain models hold above-average appeal:

• Joint IT/LOB decision-making. This approach resonates particularly strongly with organizations in the healthcare sector (81%), likely reflecting the highly distributed nature of the industry’s business processes and the need to execute applications across multiple physical locations, IT environments and devices.

• IT operations-led new application placement. IT takes the lead to an above-average extent in retail (23%) and utilities (21%) organizations, most likely driven by the centralized (and often on-premises) infrastructure leveraged for business process operations and systems-of-record data management.

• LOB as a decision-maker for new application deployment. Early adopters of new technology are somewhat more likely to take this approach (22% versus 15% for the aggregated group of respondents, as are organizations in the telecommunications sector and organizations with less than $20m in annual revenue.

Q. How are decisions about new application/workload deployments typically made at your organization?

71%

15%

14%

DECISION-MAKERS FOR NEW APPLICATION/WORKLOAD PLACEMENT% of respondents (n=943)

IT operations and line-of-business

Line-of-business

IT operations

Decisions About Deployment Venues for New Applications Are an IT/Line-of-Business Joint Venture

2 1



12%

39%

43%

6%

NON-IT INFLUENCE OVER WORKLOAD PLACEMENT STRATEGY

% of respondents (n=919)

Significantly more influence Somewhat more influence

Neither more nor less influence Somewhat/significantly less influence 5%

6%

4%

11%

15%

18%

22%

24%

27%

37%

None of the above

Other

Human resources (HR)

Research & development (R&D)

Business analytics

Marketing/sales

Finance

Legal/compliance

Digital strategy

Corporate executive management

KEY NON-IT INFLUENCERS FOR WORKLOAD PLACEMENT


Q. Over the next two years, do you think non-IT functions/roles will have more influence on decisions related to your organization’s applications/workloads, less influence, or about the same level of influence as they do today?

Q. Which of the following non-IT business functions/roles - if any - currently have the greatest influence on decisions related to your organization’s application/workload deployment strategy?

Non-IT Roles Exert Considerable Influence on Workload Deployment Decisions

2 2

D I G I TA L P U L S E | Q 1 2 0 1 9

Digital Transformation

Spotlight

2 3



47%

25%

18%

10%

CURRENT DIGITAL TRANSFORMATION STATUS


Execution Evaluation Consideration No Strategy3%

11%

28%

29%

30%

36%

42%

43%

44%

Other

Supply chain optimization

Innovation/enhancement of existing products (e.g., remote diagnostics/updates)

Developing new digital business/revenue streams

Employee productivity

Process automation

Delivery of new digital products and services

Data-driven business intelligence and analytics

Customer experience

PRIMARY PURPOSE OF CURRENT/PLANNED DIGITAL TRANSFORMATION INITIATIVES

% of respondents currently executing on/evaluating digital transformation strategies (n=593)

Top driver for healthcare and business/professional services

Key concern for utilities and government/education

Q. Which of the following best describes the status of your organization’s digital transformation strategy?

Q. Which of the following best describe the primary purpose of the current/planned digital transformation initiative?

Digital Transformation Is Well Underway, With Customer Experience, Data and Analytics, and New Product/Service Delivery Leading the Charge

24

D I G I TA L P U L S E | Q 1 2 0 1 9

Trade Matters and Impact on IT

2 5



Current US government trade policies (tariffs on imports from China and Mexico, trade hostilities between the US and China, sanctions directed at Huawei) are having an impact on organizations’ IT strategy – just under half of organizations report that there has been no impact at all.

• Industry perspective. Not surprisingly, organizations in the manufacturing sector are feeling the heat most acutely, with 21% reporting that the U.S.-initiated trade actions have had a significant impact on their IT strategies, and a further 26% citing moderate impact.

• IT-dependent organizations are also wary. Tech leaders (organizations that tend to be early adopters of new technology) report significant or moderate effects on their IT strategies as a result of trade hostilities (39%), as do digital transformation leaders or organizations that are currently executing on digital business strategies (32%).

• Respondents’ takes are somewhat determined by organizational role. Respondents in non-IT roles see the tariffs/trade situation differently: 34% of respondents in non-IT roles report a more significant/moderate effect on IT strategy than their IT counterparts (24%).

Q. To what extent — if at all — do current US government policies regarding tariffs and trade affect your organization’s overall IT strategy?

11% 16% 28% 46%

Significant effect

Moderate effect

Slight effect

No effect

IMPACT OF US GOVERNMENT TRADE POLICY ON IT STRATEGY% of respondents (n=767)

US Government Trade Policy Is Having Some Impact on IT Strategy, Particularly for Manufacturing Companies, Early Tech Adopters and Digital Transformation Leaders

26

D I G I TA L P U L S E | Q 1 2 0 1 9

Respondent Demographics

27



North America

Europe, Middle East and Africa

Asia Pacific

Latin America (& Caribbean)

1-249 employees 250-999 employees

1,000-9,999 employees 10,000+ employees

Govt/Educ

68%

21%

9%

2%


27%

10%

23%

27%

14%


Region Number of Employees

28



27%

14%

14%12%

9%

8%

4%4%

3%2%

5%

B2B Software, IT and Computer Services

ManufacturingGovt/Educ

Finance

Services Healthcare

Retail

Utilities

Telecommunications

Communications, Media & Publishing

Other


43%

18%

15%

14%

10%


$1bn+ $100m-$999.99m

$10m-$99.99m $1m-$9.99m

< $1m

Industry Revenue

2 9



Standardized Job Title Age of Company

IT/engineering managers and staff

Mid-level management

Senior management

Other

< 2 years 2-4.9 years

5-9.9 years 10-24.9 years

25+ years

42%

33%

20%

5%


2%

4%5%

22%

66%


30



We are early adopters on the leading edge

We are pragmatic about new technology, but will act sooner rather than later

We are conservative about new technology and take a wait-and-see approach

We are skeptical and are usually late to the game

13%

53%

28%

5%


47%

25%

18%

10%


Execution. We have a formal strategy and are actively digitizing our business processes and/or assets

Evaluation. We are planning and researching to develop a digital transformation strategy

Consideration. We are considering it, but have no formal plans

No Strategy. We currently have no digital transformation strategy

New Technology Adoption

Digital Transformation

31



Combining 451 Research’s industry-leading analysis with insights from our extensive community of mid-level and senior IT professionals, Voice of the Enterprise: Digital Pulse provides a broad, integrated view of enterprise IT strategy and initiatives, the underlying technology and business drivers, and the nature, pace, and direction of digital transformation.

This Voice of the Enterprise: Digital Pulse survey wave was completed during Q1 of 2019. The survey represents approximately 1,000 completes from pre-qualified IT decision-makers. Delivered quarterly, this research provides comprehensive, survey-driven analyst reports with customizable data deliverables.

D E F I N I T I O N S : VO I C E O F T H E E N T E R P R I S E : D I G I TA L P U L S E

DIGITAL TRANSFORMATION The application of digital technology and IT innovation to all areas of a business with the goal of enhancing competitive differentiation by improving the customer experience; improving operational efficiency; increasing business agility; and better managing business risk.

SOFTWARE AS A SERVICE (SAAS) Finished business or consumer applications accessed over the Internet that are built, hosted and maintained by the independent software vendor (ISV) and sold on a subscription basis (typically multi-tenant).

PUBLIC CLOUD INFRASTRUCTURE AS A SERVICE (IAAS)/PLATFORM AS A SERVICE (PAAS)

IaaS: multi-tenant infrastructure environments shared with other customers and configured for resource pooling, automation and orchestration which may support self-service provisioning, service catalogs, and metering/chargeback

PaaS: a hosted application development and deployment environment that typically includes a set of tools, libraries and services configured as a solution. This solution typically supports the entire application development lifecycle, including coding, testing, deployment, runtime, hosting and delivery.

HOSTED PRIVATE CLOUD Dedicated infrastructure (which is not shared with other customers) deployed with and operated by an off-premises hosting provider. The private cloud infrastructure is configured to support resource pooling, automation and orchestration and may also support self-service provisioning, service catalogs and metering/chargeback.

THIRD-PARTY COLOCATION ENVIRONMENT (‘FOR TRADITIONAL’ OR PRIVATE CLOUD INFRASTRUCTURE)

Systems, software, and physical infrastructure (owned/leased/licensed) that your organization operates and manages in third-party multi-tenant colocation datacenters.

ON-PREMISES PRIVATE CLOUD IT RESOURCES AND INFRASTRUCTURE

Systems, infrastructure and software (owned/leased/licensed) configured to support resource pooling, automation and orchestration (may also include self-service provisioning, service catalog and metering/chargeback) that your organization operates and manages in company-owned/leased or third-party/colocation datacenters.

ON-PREMISES ‘TRADITIONAL’ IT RESOURCES AND INFRASTRUCTURE

Systems, infrastructure and software (owned/leased/licensed) that your organization operates and manages in company-owned/leased or third-party/colocation datacenters.

Methodology

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About the authors

Melanie PoseyResearch Vice President - Voice of the Enterprise, Cloud Transformation

Melanie Posey is the Research Vice President for 451 Research’s Voice of the Enterprise: Cloud Transformation offering. She focuses on tracking, analyzing and anticipating the pace and nature of enterprise cloud adoption.

Prior to joining 451 Research, Melanie spent more than 15 years at IDC in a variety of roles, providing analysis, forecasting and insight for the cloud, hosting, datacenter, managed services and telecommunications markets. At IDC, Melanie received numerous awards for research, collaboration, sales support and client service, including being named runner-up for the prestigious James Peacock Memorial Award.

During her more than 20-year career in the technology research and consulting arena, Melanie has been quoted extensively in the business and technology trade press, and is a frequent speaker at industry and client events.

Melanie holds an M.A. in international relations/international economics from the Paul H. Nitze School of Advanced International Studies (SAIS), a division of Johns Hopkins University, an M.A. in political science from the University of Michigan, Ann Arbor, and a B.A. in French from Amherst College.

FULL BIO

3 3

https://twitter.com/melanieaposey

mailto:Melanie.Posey%40451research.com?subject=

https://451research.com/analyst-team/analyst/Melanie+Posey



Heading 1

Q.

A B O U T 4 5 1 R E S E A R C H451 Research is a preeminent information technology research and advisory company. With a core focus on technology innovation and market disruption, we provide essential insight for leaders of the digital economy. More than 100 analysts and consultants deliver that insight via syndicated research, advisory services and live events to more than 1,000 client organizations in North America, Europe and around the world. Founded in 2000 and headquartered in New York, 451 Research is a division of The 451 Group.

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