Enterprise hits and misses - IT spending puts legacy vendors on notice, and digital transformation is quantifiable

Profile picture for user jreed By Jon Reed October 21, 2019
This week - IT spending gets cloudy as on-prem vendors get another wake-up call. Digital transformation gets quantified, and event reviews roll on. Your whiffs include some epic privacy gaffes, and I take a shot at "PR doorknobs."


Lead story - Flexera's executive survey confirms IT cloud spending shifts

myPOV: Flexera's IT spending survey got quite a bit of play this week, but when you survey 303 vetted C-level executives and senior IT managers, you're going to get some editorial juice.

Kurt dons his solid state, vendor duster-busters BS detector goggles, issues the necessary survey disclaimers, and dives in (Flexera executive survey - changes in technology spending reflect strategic priorities, preference for managed services). So what did we learn? First lesson: IT spending optimism, but with geographic variation. Kurt:

More companies expect to increase their IT spending next year by a margin of 56-20 percent. However, there's a notable divergence between North America and Europe budget plans, where 25 percent of organizations plan to decrease IT spending versus only 17 percent in North America. A contributing factor to lower budgeting optimism in Europe is likely somewhat slower economic growth in the Eurozone writ large.

Flexera found that a good chunk of IT spend management is wasted - at least 12 percent, though Flexera estimates that number runs higher (Flexera is an IT cost management vendor). But Kurt sees a bigger story:

More significant than the absolute levels of IT spending are the changes in allocation. Currently, 43 cents of every IT dollar goes to software and services, with cloud infrastructure and applications making up a quarter of the total and 22% going to licensed, user-managed software (typically, but not exclusively deployed on-premises).

The breakdown will look much different next year since 55% of Flexera respondents plan to reduce on-premises software spending, while more than 80 percent expect to increase the money flowing to IaaS, PaaS and SaaS vendors, many of them significantly.

There's no big surprises in this data, but it certainly puts vendors that serve both on-premise and cloud customers on notice. Kurt issues a similar wake-up call:

As the changing spending patterns reveal, the most successful technology vendors will be those that directly address these business and IT strategies with innovative, rapidly evolving products and services.

Diginomica picks - my top stories on diginomica this week

Use case smorgasbord - a slew of use cases came through this week. Mark kicked things off with Nationwide CDO - a great data strategy focuses on delivering value for the business. Can Snowflake's cloud data warehouse impact airline CX? Jess takes a look in A new approach to analytics for improved CX takes off at Finnair. Mark filed another keeper via the story of the UK's first mobile-only bank in Atom Bank - using Google Cloud to create the bank of the future.

All eyes on Black Friday as ASOS boss insists the worst is over after 68% full year profit collapse - the road's gotten more than a little bumpy for this UK e-commerce success story. Stuart: "ASOS emerges from 2019 with its reputation badly damaged and once online customers wander off elsewhere, it's notoriously hard to recover them. The firm needs a damn good Black Friday/Christmas..."

Vendor analysis, diginomica style. It was another bonkers enlightening week on the event circuit:

A few more vendor picks, without the quotables:

Jon's grab bag - Stuart can't resist poking those who invented poking mocking the sanctimonious again in Zuckerberg has a dream that's a nightmare - Facebook's 'defender of free speech' spin escalates. He also found the time bears down on a new CEO opus, Book Review - Marc Benioff's Trailblazer: The Power of Business as the Greatest Platform for Change.

Best of the rest

Waiter suggesting a bottle of wine to a customer

Limiting myself to five quick hits this week; Las Vegas is paging me again... 

I've been waiting on numbers to validate so-called digital transformation efforts. McKinsey made a significant contribution this week, via Transformation metrics: Defining success:

We isolated the 82 public companies that had undertaken a full-scale transformation and had an observable 18-month transformation track record to see what we could learn from a statistical analysis of their experiences. The research highlighted four indicators that showed a statistically significant correlation with top-quartile financial performance during the 18-month test period.

Whether or not that methodology is unimpeachable, it gives us something tangible to work with. And what were those four indicators?

  1. Go big, go broad - the digital transformation should be all-in, not department-specific
  2. Move fast, renew often - in other words, score "quick wins" early to keep buy-in strong
  3. Embrace organizational health - a debatable concept (what is a healthy culture exactly?), but McKinsey says measurable metrics are the key here.
  4. Stretch your aspirations - companies with ambitious transformation targets performed better.

I found these criteria a bit generic. I favor factors such as: focus on outside-in transformations (starting/ending with customer expectations), treat all constituent groups (employees, supply chain partners, end customers) as customer groups, each with their own CX needs. That said, any effort to quantify digital transformation, and examine its connection to corporate results, is welcome.

Honorable mention

Overworked businessman


The competition for headline-of-the-week was spectacularly intense:

The whiffery didn't end there. Privacy whiffs galore:

Google might want to be careful about the word "probably":

When you're not ready to acknowledge your botch-up, just put your app in maintenance mode instead:

Meanwhile, we have Meetup.com to thank for one of the goofiest monetization experiments of all time:

Yes, let's encourage less RSVPs on our platform, after all, those who pay for meetup accounts don't care who is showing up.

Finally, Verizon, the digital geniuses that own Yahoo (I know, it's hard to keep track of, Yahoo has been swapped around more than a Grateful Dead Bootleg), recently issued a bizarre announcement that effectively ends Yahoo Groups.

It's another dork decision in a long line that marks the decline of a thoughtful Internet, giving way to the social media circus we all perform in today:

The way Yahoo/Verizon have snuck this through, groups with historically-useful archives probably won't be able to back up their data in time. These PR doorknobs have other concerns. The shame of it is that Yahoo Groups still had traction, and under the management of a lean organization, are probably monetizable via a subscription/advertising combo. But I guess finding a good home for such things is too much of a distraction from the hard work of rescuing AOL from itself. See you next time...

If you find an #ensw piece that qualifies for hits and misses - in a good or bad way - let me know in the comments as Clive (almost) always does. Most Enterprise hits and misses articles are selected from my curated @jonerpnewsfeed. 'myPOV' is borrowed with reluctant permission from the ubiquitous Ray Wang. 

Image credit - Waiter Suggesting Bottle © Minerva Studiom, Overworked Businessman © Bloomua, Businessman Choosing Success or Failure Road © Creativa - all from Fotolia.com.

Disclosure - Oracle, Workday, New Relic, Zoho, ServiceNow, Host Analytics and Salesforce are diginomica premier partners as of this writing.

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