Digital Transformation in the US

Digital Transformation in the US Better Ops, Agile Apps, Faster Business An IDC InfoBrief, sponsored by Red Hat | January 2017

Digital Transformation in the US: Better Ops, Agile Apps, Faster Business

An IDC InfoBrief, sponsored by Red Hat

Contents Executive Summary The Need for Speed Being in IT Is Not Getting Easier CapEx Under Control; What About OpEx? Moving from Legacy to the Cloud The Value of Automation and Growth of Open Source DevOps is Here. Where are You? How Red Hat Simplifies IT Ops for Digital Transformation (DX) It’s time to Modernize Integration Security is Critical Across Infrastructure and Applications Ecosystem in the Cloud The Way Forward For More Information

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Executive Summary The technologies and processes that businesses deploy today are so tightly linked to their customers and markets, that the boundary between the internal operations of the enterprise and its external ecosystem (i.e., customers, markets, competitors, partners, regulators) is rapidly disappearing. Business leaders are challenged to move their enterprises to the next level, that of “digital transformation” (DX). This next level requires combining digital technologies with organizational, operational, and business model innovation to create new ways of operating and growing businesses. This IDC InfoBrief examines the drivers, value, challenges, and potential solutions of digital transformation, including Red Hat’s role in simplifying IT operations to achieve DX.

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The Need for Speed Digital devices, connectivity and applications are intertwined in all aspects of our lives, work and personal

US networked consumer electronics installed base will double from 2010 to 2020, to over 1.2B devices Pivot Table Worldwide Consumer Market Model, 2010–2020

Technology is disrupting business while providing new opportunities

US business spending on IT will exceed $500B for the first time in 2016 IDC US Black Book

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The Need for Speed Can IT extend its skills, operations and technologies into DX? 64%

Most important role of IT in DX is innovation, identifying which parts of business could be digitally transformed, through the use of technology

64% of organizations today are just beginning their DX journey IDC, Digital Transformation Maturity Model Benchmark, 2015

But top transformers/ disrupters will double by 2020 to make up over 40% of the market IDC, Digital Transformation Maturity Model Benchmark, 2015

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Being in IT Is Not Getting Easier Cloud and application stack new layers being added More than 85% of enterprise IT organizations will commit to multicloud architectures by 2018. Source: IDC FutureScape: Worldwide IT Industry 2017 Predictions

Explosion of digital technologies

By 2018, enterprises using DevOps technology will increase the number of annual application code releases by 50%. Source: IDC FutureScape: Worldwide IT Industry 2017 Predictions

By 2020 more than 3 billion container instances will be deployed.

Source: x86 Software Containers Forecast, 2016–2020

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CapEx Under Control; What About OpEx? Virtualization kicked off increased server utilization and datacenter consolidation Moving from traditional virtualization to cloud enabled virtualization

2007

2016

a. 43% workload virtualization

a. 85% workload virtualization rate (2x rate of 2007)

b. Low hardware efficiency, 4.4 VMs/server c. High management costs, manual d. Proprietary led, focused on consolidation via virtualization

b. High hardware efficiency, 10.6 VMs/server c. Management costs still high, some automation d. Open source led, focused on new cloud and container technologies

Worldwide Virtual Machine Forecast, 2015–2019: Strong Virtualization Growth Is Tempered by Cloud and Containers

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CapEx Under Control; What About OpEx? Time/budget spent maintaining existing IT vs. innovation

41% of CIOs view themselves as

operational, whose primary focus is to keep the lights on vs. 25% who saw themselves as innovation drivers IDC’s CIO Sentiment Survey and LOB Sentiment Survey, 2015

However, from the LOB point of view, it is flipped, where 41% need the CIO to be an innovator, and 28% need the CIO to be focused on maintaining current IT IDC’s CIO Sentiment Survey and LOB Sentiment Survey, 2015

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Moving from Legacy to the Cloud On-premise vs cloud growth 300,000.00

Cloud

250,000.00

84,594.60 72,824.80

200,000.00

52,847.30 36,920.90

62,320.80

44,437.90

150,000.00 100,000.00 150,359.89

157,920.50

168,687.63

177,490.81

186,782.88

196,331.23

50,000.00

80% of US software spending is on legacy hardware, but cloud is growing fast, from 20% to 30% of spend over 5 years Public Cloud Services Tracker and IDC Software Tracker

0.00

2014

2015

2016 Legacy

2017

2018

2019

Cloud

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Moving from Legacy to the Cloud Quick stats on cloud spending

US SaaS spend triples ($3B to $10.2B) from 2014-2019 Worldwide and Regional Public IT Cloud Services Forecast, 2015–2019

US laaS spend doubles ($30.4B to $59.5B) from 2014-2019 Worldwide and Regional Public IT Cloud Services Forecast, 2015–2019

65% of US enterprises have a hybrid cloud strategy today CloudView Survey, IDC, December, 2015

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The Value of Automation and Growth of Open Source Increasing business agility, automation, DX, and security are major IT themes through 2020

43%

43% of US orgs rated use of automation technologies

as “very important” in their management strategy IDC Cloud and DevOps Management Survey

As US organizations automate, they show a clear preference for open source DevOps technology Almost 3/4 of North American heavy cloud enterprise users have IT staff available to exploit cloud management, automation and monitoring tools IDC CloudView Survey, Dec 2015

36.9%

36.7% 17.8%

Currently implemented as a mature process

Currently implemented, in early stages

7.3%

1.2%

Have firm plans Have aspirations Not an area to implement, of focus to implement within 12 months but no firm plans Home

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DevOps Is Here Accelerating the software supply chain

New app architecture, microservices

Top drivers for DevOps are to increase software time to market and more efficient operations

Allow incremental and parallel development

CI/CD for a continuous flow of upgrades

Containers as the new compute primitive for these applications

IDC FutureScape: Worldwide IT Industry 2017 Predictions

!

Nearly half of respondents say that culture/ internal inertia is the biggest organizational challenge in adopting DevOps IDC DevOps survey

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How Red Hat Simplifies IT Ops for DX Mobile Red Hat Mobile Application Platform

Cloud native application and DevOps Red Hat OpenShift

Hybrid Cloud Red Hat Cloud Suite

Containers OpenShift Container Platform

Management Ansible, CloudForms, Satellite and Insights

API Management Red Hat 3Scale

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It’s Time to Modernize Integration Integrating of existing processes and data is key to accelerating the development of new digital apps A Developer’s Modernization Checklist Simplify integration by using proven, out-of-thebox implementations Reduce complexity of integration and focus on innovation Pursue a lightweight, modular approach to integration Provide easily consumable integrations through open standard interfaces Home

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Security is Critical across Infrastructure and Applications How to Get Started

Automate patching vulnerabilities and container inspection Discuss the risk of security problems and their business impact Talk about why you need a trusted partner Monitor continuously via the community Strengthen governance and risk compliance. Bring new technologies into the company to deliver against business value in a secure and compliant manner Home

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Ecosystem in the Cloud You need to operate a simple environment where you can hire or train people to manage If you can’t do it yourself, Red Hat can help with delivery partners Large ecosystem of ISV/IHV and trained people make it easy to work with Red Hat Red Hat ecosystem can bring in the culture, collaboration and community aspects of Open Source Home

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This Way Forward Digital transformation is upon us. Already it has reshaped some industries in dramatic ways, such as transportation, hospitality, and retail. For IT to cope with the acceleration of change and increased demands from more users across the organization, start rethinking operations. To free up time to take on new projects — and to improve the speed of work in progress — consider new styles of thinking, automated processes and innovative technologies. Take proactive measures (e.g., change quality, portfolio management, staff efficiency, etc.) to limit exposure to frantic reactions! (e.g. system outages, MTTR, etc.). Here are a few points to keep in mind:

Embrace DevOps to act agile

Automate to innovate

Architect for the future

Standardize to secure

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For More Information For general information or to speak to Red Hat experts, call 1-888-RED-HAT1. For specific Red Hat technologies: Mobile: https://www.redhat.com/en/technologies/mobile/application-platform Cloud suite: https://www.redhat.com/en/technologies/cloud-computing/cloud-suite Jboss middleware: https://www.redhat.com/en/technologies/jboss-middleware Automation: https://www.ansible.com/red-hat API Management: https://www.redhat.com/en/technologies/jboss-middleware/3scale Management: https://www.redhat.com/en/technologies/management

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