As the digital universe continues to evolve at breakneck speed, the old silos that once characterized much of the 'IT sector' are breaking apart – as technologies evolve, they are also coalescing, overlapping and consolidating, especially as technology adoption continues outside of the classic IT department. Perhaps more significantly, the most disruptive breakthroughs can take place when multiple innovations feed off each other – consider how the combination of public cloud and machine learning is driving the AI landscape, for example. Innovation doesn't happen in a vacuum, and the expanded pallet of the new digital landscape vastly increases the potential for disruption. Accordingly, we've tapped into the 'hive mind' of the 451 analyst team, and – in no particular order – we provide our top 10 trends for the IT industry overall in the coming year.

The 451 Take

As the digital opportunity continues to evolve, it will become increasingly necessary to take a broader perspective: true insight will come from examining the way technologies overlap. This is why we have developed the 4SIGHT framework, which identifies and details four 'uber-themes' – Invisible Infrastructure, Contextual Experience, Pervasive Intelligence and Universal Risk – that we believe will drive the IT industry over the next decade. It's also why we are evolving our own research channels – for example, around Applied Infrastructure and DevOps, or Data, AI & Analytics. The technology universe is changing, and we are evolving with it to ensure that we can help clients by delivering the data and insight required to understand and navigate the disruption these changes will bring.

1. 'Cloud Native' Takes Center Stage

As the cloud model enters its teenage years, cloud-native approaches to application development (containers, microservices, Kubernetes, serverless, etc.) deployed and managed via DevOps processes are dramatically simplifying service creation and delivery. Success breeds success, and as momentum builds, cloud-native has become the direction of travel for enterprises, especially as the 'hybrid' world of increasingly interconnected on-premises and cloud-based IT resources coalesces. However, the pace of cloud-native transformation will be increasingly dictated by the access to and cost of skills, which is now a real constraint.

 Figure 1: Cloud-Native Adoption

Source: 451 Research's Voice of the Enterprise: Cloud, Hosting and Managed Services, Workloads and Key Projects 2018

2. Successful Organizations Will Be 'Data Driven'

We know that organizations that harness and exploit their data will have a competitive advantage, but for most businesses this task is far from easy. The further promise of AI and machine learning will encourage more organizations to place data optimization at the heart of their strategies in 2019. However, becoming data-driven isn't simply about adopting the latest technologies: it also requires organizational and cultural changes to increase the influence of senior executives, data analysts, developers and other data consumers in the selection and adoption of those technologies, as well as executive buy-in to ensure that recognition of the importance of data and a greater focus on gaining competitive advantage is at the heart of the business.

Figure 2: Importance of Data

Source: 451 Research's Voice of the Enterprise: Data & Analytics, 2H 2018 - Advisory Report

3. Focus in Digital Procurement Shifts to Optimization

The move to cloud and an opex-centric 'as a service' model changes an enterprise's notion of value from a fixed concept to a highly variable one that needs constant reassessment. The optimal combination of workload execution venues, models, licenses, providers and vendors changes seemingly minute-by-minute in the digital age, and enterprises must optimize their IT estate on an ongoing basis to maximize value in the areas of cost, performance and risk. The whole business must transform to fully take advantage of these changing requirements. Service providers and vendors have a huge role to play in demonstrating and revealing value to enterprises.

Figure 3: IT Resource Optimization Is Required

Source: 451 Research's Public Cloud Price Index, Global Managed Services 2018; 451 Research's Voice of the Service Provider, Infrastructure Evolution, 2018

4. A New 'Age of Automation'

Since the financial crisis of 2008 much of IT investment has been focused on the emancipation of software from the underlying hardware. Most of the investment in the coming decade will be focused on automation, building on this virtualized software layer. A large range of technologies, from robotic process automation (RPA) through to Machine Learning to will drive this and Digital Automation Platforms will be the platforms used to build applications that can adapt to change quickly. In a 451 Research custom study in December 2018, 70% of surveyed organizations said that a digital automation platform is a key requirement.

5. 'Edge' Computing Becomes More Tangible

Edge computing, in its broadest sense – everything from carrier and datacenter facilities near to where data is generated to the cars and machines generating the data – is enjoying a renaissance in this cloud-centric age. Exactly how quickly this is evolving into a tangible opportunity varies hugely across, between and even within markets, but data will increasingly need to be processed and stored close to where it is generated, or on the device itself. Determining what data goes where and how to make the best use of it will become a major challenge for IT departments. These changing requirements will have significant impacts for data, compute and networking.

Figure 4: The Rise of Edge Data Processing
Source: 451 Research's Voice of the Enterprise: Internet of Things, Workloads and Key Projects 2018

6. The Context Economy Begins to Flourish

Technology is quickly becoming the catalyst for one of the most profound changes ever to occur in the relationship between individuals and the world around them. These technological breakthroughs bring huge amounts of data to power the 'context economy.' Context will define the value of data: information without context will be worthless, while information with context will be essential for delivering personalized experiences, whether for leisure or work. Those that own the data will win; everyone else will have to pay to access it.

Figure 5: The Rise of Contextual Experience
Source: 451 Research's Voice of the Connected User Landscape: Digital Transformation Corporate Representative Survey 2H 2018

7. 'WorkOps' Emerges to Enable Intelligent Knowledge-Based Work

The term 'WorkOps' describes the evolving nature of work. It describes more responsive work execution where intelligent context, workflow automation, collaboration and reporting are integrated and embedded across the work lifecycle. As work is broken down into constituent parts, and people and technologies move between roles and tasks in an agile manner to execute work, we believe WorkOps and the technologies that enable it will be a key characteristic of enterprises' future digital competitiveness. In a 451 Research Voice of the Connected User Landscape Corporate Digital Transformation survey in the second half of 2018, 54% of technology decision-makers within organizations said it is highly important to them to use intelligent process automation to reduce the friction points in employee workflows.

8. Security Shifts to a 'Zero Trust' Model

Zero-trust networking has the potential to fundamentally change the way security is done, upending the 'old' perimeter-based security model that assumed anyone on the inside was 'trusted' and anyone on the outside wasn't. In its place, 'zero trust' networking – or what 451 Research calls unified access control (UAC) – is an entirely new security model where no one (or no 'thing') is assumed to be trusted, and in which access to resources is based more on who you are than where you are.

This implies a greater role for identity-based controls such as multifactor authentication (MFA), authorization, directory services and identity governance, and less direct reliance on network-based controls like firewalls and VPNs. All of these are among the security tools deemed most important for organizations with a security operations center according to our Voice of the Enterprise: Information Security, Organizational Dynamics 2018 study, suggesting that the time is ripe for their integration in more seamless UAC initiatives. And because it touches most segments of the IT security stack – MFA, identity as a service, firewall/VPNs, endpoint security and cloud access security brokers to name a few – zero trust will likely have a highly disruptive impact on the cybersecurity landscape in the coming years, in the form of both R&D and M&A.

Figure 6: Most Important Security Tools in the SOC
Source: 451 Research's Voice of the Enterprise: Information Security, Organizational Dynamics 2018

9. A New Silicon Gold Rush

We are currently tracking nearly 40 early-stage chip startups all focused on building new silicon designs optimized for the training of deep-learning neural network models, and for artificial intelligence inference tasks in the datacenter and at the edge. This is an unprecedented number and marks a significant shift toward the use of heterogeneous chip architectures for datacenter infrastructure. However, only a handful of these startups are likely to survive.

Figure 7: Primary Uses for GPUs and FPGAs Among Service Providers

Source: Voice of the Service Provider: Infrastructure Evolution 2018, Quarterly Advisory Report

10. M&A Dynamics Shift to Outsized Exits

The 'Softbank effect' is creating an environment in Silicon Valley of 'haves and have-nots,' as ever more VC dollars go to ever fewer startups. On the other end of the lifecycle, it's also polarizing the exit market for VC-backed startups, with record proceeds generated by a declining number of deals.

Figure 8: VC M&A Activity

Owen Rogers
Research Director, Digital Economics Unit

As Research Director, Owen Rogers leads the firm's Digital Economics Unit, which serves to help customers understand the economics behind digital and cloud technologies so they can make informed choices when costing and pricing their own products and services, as well as those from their vendors, suppliers and competitors, and architected the Cloud Price Index.

Al Sadowski
Research Vice President - Voice of the Service Providers

Al is responsible for 451 Research’s Voice of the Service Provider offering. He focuses on tracking and analyzing service provider adoption of emerging infrastructure, spanning compute, storage, networking and software-defined infrastructure.
Jean Atelsek
Analyst, Cloud Price Index

Jean Atelsek is an analyst for 451 Research’s Digital Economics Unit, focusing on cloud pricing in the US and Europe. Prior to joining 451 Research, she was an editor at Ovum, spiffing up reports, forecasts and data tools covering telecoms and service providers, fixed and wireless networks, and consumer technology among other topics. 

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