Just how well is digital transformation going for your business? One might be forgiven for thinking that the rush must by now be almost over and if your business has not done it yet then you are late enough now to be considered a lost cause. After all, back in 2017 Gartner Research was issuing clarion calls for CIOs to “embrace the urgency of digital transformation”- and they were by no means alone.
There are signs however that this has not necessarily worked out as predicted - not yet at least. It could yet be that those that have moved forward smartly may actually have moved too quickly, perhaps just transforming what they already do, and that those that have delayed are now getting a better picture of where they can apply genuine transformations that will make their future better.
It could also be that some of the early adopters have stumbled over their early implementations and have caused themselves more problems than they have solved - so far at least.
Either way, there is some evidence, specifically seen in three recent surveys, that the concept of digital transformation is following the pattern established by the famous Gartner Hype Cycle and head off towards the Trough of Disillusionment.
The surveys come from Nutanix, a vendor that could be expected to profit by any surge in transformation plans, CAST, a company that helps users work out where they might be heading, or already going, in the wrong direction, and Mulesoft, one of the kings of the API and integration business that was acquired by Salesforce.
The Nutanix survey
The Nutanix Enterprise Cloud Index is a supplement to the global 2019 Enterprise Cloud Index and focuses on cloud deployment and planning trends in the Europe, Middle East, and African (EMEA) region. Its key finding this time round, for 2019, is the way the expectations of the users expressed in 2018 were not met by the users themselves. They had great plans in 2018 for what they planned to achieve in 2019. But when push came to shove, the general position across the board of Nutanix customers was a decision to stand still, or even take slight pace backwards.
There could be many reasons for this, of course, with one of the favourites across the whole of Europe being the economic uncertainties connected with Brexit and its long-term impact. The realisation must certainly have been that planning investments and development when no-one is remotely sure what the outcome of the next two years or so will be, would quite likely end in mistakes.
It is also quite possible that the fact Nutanix systems are equally at home on premise as they are delivered as a service, means that continued use of existing data centers may have been seen as a sound intermediate step. One other factor is pointed to in the survey, which shows that nearly 37% of EMEA users identify themselves as being over-budget on the use of Public Cloud service.
It is certainly the case, as this story on Densify’s introduction of CLOE – a Cloud Learning Optimisation Engine made clear, that many users heading out in to the new world of using Public Cloud services have been at serious risk of inadvertent over-charging simply by virtue of over-specifying what they require, mainly through lack of knowledge
Add that to the current European business uncertainties and a temporary stalling or re-adjustment of transition plans does seem a likely outcome.
Another factor may well have been the fear that implementing some of their plans may have ended up more of a technical challenge than expected. In the Nutanix survey, 2018’s stated plans to migrate significantly away from traditional data centers and toward hybrid cloud failed to materialise come 2019. Rather than reducing data center use by nearly 20% from 2018 to 2019, EMEA companies increased usage by nearly 14%. And rather than increasing hybrid cloud use by about 7%, they decreased usage by about 5%. It is worth noting that EMEA is not alone in this trend; the unexpected uptick in data center deployments, accompanied by significant repatriation of public cloud applications and a hybrid deployment slowdown, could be found in all regions.
This does seem to be just a deferment, however, not a fundamental change of direction. The EMEA region still indicates aggressive plans to bolster hybrid cloud use and cut back on data centers over the next three to five years – going from just under 12% penetration of hybrid cloud today to an expected 53% usage by 2024.
EMEA-based companies appear slightly more conservative about the use of public cloud as part of a hybrid cloud strategy than other regions around the globe. They're also slightly less likely than the Americas and Asia-Pacific-Japan (APJ) region to run a managed or hosted private cloud as part of their hybrid cloud environment.
The CAST survey
This survey - Cloud migration 2.0: shifting priorities for application modernization - is one that suggests users are still in need of a good deal of help and guidance in getting their transformation ducks in a row, and sets out to provide guidance on how to plan for it. One of its findings, for example, is that over 50% of businesses are primarily basing their decision to move applications to the cloud largely on gut instinct, and perhaps some ad hoc surveys with application owners.
One of the big problems that has come to light for users is that most of the transformational problems they face have little or nothing to do with the technologies involved. Instead, the big challenge comes from managing compliance issues as applications move from an on premise environment to the cloud. In addition, the survey quotes one Global Chief Architect with a European Insurer highlighting other non-technical issues, ones that need consideration well before any transformation processes get to start:
“Cloud is definitely not a technology issue, there are a lot of people and process changes required before modernisation begins.”
Going for the quick win is still a common tactic, with SaaS-based systems usually being favoured. But the report suggests this just shows that many businesses simply do not understand how to set about transformation. A key reason behind this is a point made many times at diginomica - the current over-complexity of managing the technology changes, an area that the Cloud Services Providers (CSPs) really need to address more directly. It suggests these standardised packages indicate some of the challenges with modernising core systems, such as lack of features, security constraints and lower performance.
According to the survey, more than 50% of businesses do not apply an analysis-led evaluation or overcome the challenges of lift & shift by assessing application readiness for the cloud, its ROI and its criticality. It found that businesses with a heavy commitment to legacy-based processes – particularly those in North America – tend to lift and shift without achieving too much in the way of benefit.
Cloud journeys are still are far focused on re-hosting and the immediate, marginal rewrites that result. It suggests that re-hosting has greatest benefit for applications with up to three years before end of life. Existing, evolving applications should, it suggests, be first re-platformed, then continuously refactored until the application gets closer to end of life.
It sees rising competitive pressures on cloud platform providers, with more mature firms and institutions in the USA adopting alternative cloud providers faster than comparable businesses in Europe. This is forcing the CSPs, particularly AWS, Google and Microsoft, to complete more aggressively, making them more comparable in their service offerings. This makes price competition more important.
Fewer than 40% of the established enterprises have achieved their target cost, resiliency and customer experience benefits, according to the survey, and it suggests it is still the time for what it calls `sober, ongoing conversations’ about how such backbone institutions can capture the promise of cloud. In that way such firms must reset objectives for the next phase of the migration into the cloud.
The Mulesoft survey
The key findings of this report, based on a global study of 800 IT professionals, highlight more of the problems businesses face in meeting transformation goals, including some common ones, such as IT departments having to innovate faster, but with fewer resources. Half of respondents say their IT budgets will increase by less than 10% this year, while project workloads are up by 40%. There are also problems with the process of digitalisation, with 64% finding it difficult to introduce new technologies because of constraint with their existing IT infrastructures.
Interestingly, given Mulesoft’s core business, many businesses seem to have problems sharing APIs, internal software assets and components, meaning none are available for developers to reuse. Around 70% globally have a strategy to enable the wider business to easily integrate apps and data sources, yet only 12% of organisations (9% in the UK) are mandated to abide by a company-wide API integration strategy for all projects. Some 67% don't have a team dedicated to driving the sharing and re-use of APIs. This is seen as providing a significant brake on digital transformation.
Taken together, these three reports seem to point to a potential stalling of the important trend towards digital transformation. The obvious short answer is a slide into the well documented Gartner Trough of Disillusionment, but it does also give some evidence as to how that trough emerges. There is certainly the vagaries of the marketplace itself, especially across the UK and, to a lesser extent, Europe. There are currently sufficient uncertainties to make run-away- and-hide seems like a plausible business strategy.
But these reports also show evidence that many businesses are still unclear about what they are hoping to achieve or how to achieve it, while those that they should turn to – the systems vendors – are still far too oriented to the tendency of playing `confuse-a-cat’ with the hokum of technological detail.
The question arises: is the arrival of cloud-delivered services a point where technology can disappear? It certainly is important that some doctors understand the processes of extracting oxygen from the air and replacing it with CO2, just in case things go wrong. Most of us, however, just have to remember to inhale/exhale, inhale/exhale. The question now has to be, ‘Why do you want cloud?’, not, ‘How much arm-wrestling will be needed to work out how we do it?’