The digitization of information is impacting businesses faster than ever before. It seems every week a new company pops up and disrupts the status quo. Think of how fast Uber has disrupted the taxicab industry or how rapidly Airbnb is reshaping hospitality. Another good example is how Square has enabled point of sale to be offered on low-cost mobile devices instead of having to pay thousands of dollars for proprietary systems with long installation times.
Business disruption used to take decades to happen. Consider how Walmart changed the face of retail over a 20-year period. This was considered fast at the time, but now think of how the companies I mentioned above seemingly changed their industry in just a few years. How is this possible? Well, businesses like Square, Airbnb, and Uber were born in the digital era, where agility is the norm. A traditional retailer using legacy systems can take months or even years to change direction.
Moving forward, it's an absolute imperative that businesses have the necessary agility to respond to move with the market and native digital speed. Those that can achieve this will thrive and leapfrog competition. Those that can't face being killed off. If you don't think this threat is real, think again. I recently saw a report that predicted that 75% of the S&P 500 will be replaced in the next 10 years.
The challenge for IT today is finding a way to enable the business to be agile, and this is impossible to do with legacy systems and processes. So now IT leaders are tasked with reshaping the entire makeup of IT with less budget, shorter maintenance windows, and technology that is more complex than ever before without disrupting the status quo. This is like changing the wings on an airplane while flying at 38,000 feet and being asked to do it in a way so that none of the passengers notice.
The good news for IT leaders is that the technology required to make this change actually exists today. Server virtualization, flash-based storage, cloud computing, software defined networks, network functions virtualization, and other innovations can deliver unprecedented levels of IT agility, which in turn has the power to deliver business agility. Many of the natively digital companies have embraced these trends and are reaping the rewards. It's one of the reasons Uber has gone from an idea to $10 billion in revenue in just over five years.
For traditional companies, it's not that easy. They can't just ditch everything and start from scratch. IT needs to be transformed across almost every area – applications, compute, storage, and networks. Also, the structure and the way IT operates need to evolve as well. The shift to DevOps can help, but only in conjunction with process change and infrastructure modernization.
Very few companies have the ability to make these changes without any help. I've talked to a few businesses that were early adopters of converged infrastructure and the IT leaders there told me that it took them months to get the organizations' structure and processes set up correctly to take advantage of the new technology.
What's missing in the industry today is some help for businesses that can't make the shift themselves. For all of the talk from the service provider and systems integrator community about digital transformation, most of them focus on infrastructure evolution only. What's required are services firms that can help at a technical level but also focus on the business and organizational issues that need to be resolved to achieve true agility.
It's time for all of the service industry to step up and provide a complete set of transformation services to help mainstream businesses evolve and compete with the digitally native ones.