Enterprises need to start re-evaluating how they deliver digital services to their customers and encourage their IT departments to lead the charge, or risk tumbling into obscurity.
That’s according to EMC's information infrastructure business CEO, David Goulden, who issued this stark warning during a keynote at the recent EMC World conference in Las Vegas.
With the number of internet-connected devices growing and an increasing reliance on mobile apps, enterprises need to start thinking differently about how they position themselves and their offerings in the new digital age, he declared.
"These are the requirements coming from the business, and IT needs to step in and lead or be left behind," said Goulden.
To emphasise this point, he cited historical data that shows 89% of the firms that made up the Fortune 500 in 1955 no longer exist, before suggesting this is because they failed to respond to similar trends that changed the way customers wanted to do business with them.
“When these transitions have happened in the past, companies have gone out of business,” said Goulden. “They were put out of business by disruptions in their industries and we think this current transition is bigger than anything we’ve seen before.”
The convergence of IT mega-trends
This all feeds into a couple of themes that influenced much of the content at EMC World 2015, with the first centering on the rise of the “third platform”.
This term was originally coined by market-watcher IDC to describe the convergence of several IT mega-trends – cloud, big data, mobile and social – and the impact this is having on the way applications are delivered, as well as how users expect to consume them.
For example, third-platform apps tend to be written in newer programming languages, are run in the cloud and provide users with access to data in real-time from any device regardless of where they are.
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They also tend to be created using agile software development techniques, and their developers appreciate how important data privacy and protection are to users.
The second theme centred on the consumers of these apps and services based on the third platform, who EMC described as members of the “Information Generation”.
“We’ve tended to name entire generations around shifts in technology,” said Goulden, before going on to name-check the Baby Boomers, Generation X, Millennials and Generation Z as examples of this.
“It doesn’t matter which of these technology generations you’re a part of – you shouldn’t feel left out because we’re all part of the Information Generation,” he added.
As alluded to by Goulden, the rise of the Information Generation and their preference for third-platform apps and services poses a major challenge for enterprises, which will need to adapt the way they work to the way this group of users likes to consume services.
"Keeping the Information Generation happy and delivering a third-platform outcome is not easy for IT and will create a huge pain point for CIOs, but success will enable growth for the business," he explained.
To achieve this, organisations should look to the likes of taxi-booking app Uber and food delivery service Munchery for inspiration, as both are prime examples of how to deliver services to members of this user group, said Goulden.
For example, both firms have cornered a market few others have offerings in, they provide personalised services to their users and operate in real-time.
However, according to EMC’s own research, based on the responses of 3,000 business leaders in 18 countries, few enterprises are in a position to deliver services in these ways at the moment, said Goulden.
“We asked people how ready they thought their organisations were in each of these dimensions and the gaps are quite remarkable,” he said.
Managing the pace of change
EMC’s messaging on this topic echoes the urgent rhetoric suppliers used to spout about cloud computing five or so years ago, when it was commonplace to hear organisations being warned about the business risks of ignoring the shift to off-premise technologies.
While many of these early declarations called on users to act immediately, they soon gave way to a softer stance from the supplier community, as real-world tales about the challenges of moving to the cloud started to emerge.
As such, proclamations like “adopt cloud or die” gave way to more measured statements that still emphasised the importance of moving away from on-premise technologies, but to an extent and at a pace that was best for the business.
In a similar vein, analyst and vice-president of analyst house 451 Research, Simon Robinson, said EMC might be better off taking a softer stance with users on third-platform matters to drive up interest.
I’ve seen so many companies get beat by technology because they’re just not keeping up, but the real scary thing is seeing companies disappearing because they’re totally getting disrupted
Ron Redmer, Cyber Group
“The reality is that different customers are running at very different speeds on the third platform, and EMC needs to cater to this broad group,” he said.
“Although EMC is also very good at ‘finding a parade and marching at the front of it’, in terms of evangelising new and emerging markets. So at the very least it’s important EMC is to be seen having this sort of message.”
Meanwhile, senior vice-president of US software developer Cyber Group, Ron Redmer, said addressing all five of the areas cited as essential for third-platform success is going to be a big, yet necessary, undertaking for many firms.
“I’ve seen so many companies get beat by technology because they’re just not keeping up, but the real scary thing is seeing companies disappearing because they’re totally getting disrupted,” he said.
“So when I think about why people need to learn about the rise of the third platform, it’s because they might be working for a firm that’s about to get disrupted.”
The transition to becoming conversant in the ways of the third platform took Cyber Group at least 18 months, he said, having started out in 1998 making apps focused on the second platform.
More recently, though, it has drawn on EMC’s storage management technology ViPR to build its own third-platform, content-archiving application based around software as a service.
Redmer said taking a slow and steady approach to getting their business ready for the third platform will be the best and only way many enterprises will be able to go.
And with so many businesses being in the same boat, there should be plenty of time to prepare.
“In some industries, it’s going to be a fairly long tail, but the return on investment is there and people can start to make a hybrid approach, by using a mix of second and third-platform technologies, and gain efficiencies,” said Redmer.
“If I’m a banking CIO, I might not be able to move quite quickly, but I might be able to put certain things on some newer technologies just to understand how my competitors might be preparing to disrupt my model by doing the same thing,” he added.
Regardless of how long it takes them, Redmer said making the move to embrace third-platform technologies has its benefits, particularly when it comes to bringing apps to market more quickly.
“We’re really trying to deliver on a scale of months with everything we do, and try to scope out products with near-time delivery. Projects that would have taken years, we’re scaling those down into quarters now,” said Redmer.
“The difficulty though is getting the team trained up to deliver at that cadence, and it’s a pretty steep learning curve.”