New tech opportunities arise continually, making this industry one of the most stimulating and challenging. To help navigate the waters, I have gathered five insights, which I believe will impact IT spend in 2018.
The EU’s new regulation isn’t news. But, when the GDPR comes into force on May 25, 2018, it will represent the most significant change in data protection for nearly a quarter of a century. What I think is most interesting about the GDPR is what it reflects: the disruption caused by digital transformation, which has created a shift in power from the organization to the individual.
In July 2017, Equifax was the subject of a highly-publicized cyber-security breach, made possible through the exploitation of a web-application vulnerability, resulting in the personal data theft of over 140 million consumers, including 400,000 Britons. It wasn’t until six weeks later that Equifax made the information public. With operations in Europe and EU customers affected, had the GDPR been in force at the time, Equifax would have had just 72 hours to report the incident.
I believe this aspect of the new regulation – the time limitation – together with a person’s right to be forgotten or obtain a copy of their information stored that will prove difficult for to uphold.
To comply with these requirements, processes will need to be in place to retrieve and remove personal information from records, which requires knowledge about where such information is stored and how it is processed.
Like software licensing, the GDPR is just another form of compliance that organizations need to adhere to; to avoid risk in the form of hefty fines and brand damage.
If 2017 was the year of indirect usage, with Diageo fined in excess of 70 million USD, and revelations by Anheuser-Busch InBev – one of the world’s largest brewing companies – that SAP is seeking 600 million USD in compensation for indirect usage, my bet is that 2018 will be the year of the GDPR. Expert opinion varies, and early cases are likely to gain a lot of media attention as organizations struggle to understand what is required and solutions develop as the GDPR landscape becomes clear.
The Diageo case could have been avoided. At Snow, we talk about the Disruption Gap – a growing divide between IT and business units as technology becomes more accessible enabling the business to define, source, and manage IT initiatives. And while procuring technology closer to the source promotes business flexibility, it muddies visibility of the corporate network – leaving IT in the dubious position of being responsible for an IT estate they haven’t provisioned.
Forecasts for cloud spend in 2017 show that adoption, fueled by cloud-first approach, has been slightly higher than early estimates. Market leaders in Infrastructure-as-a-Service (IaaS), Amazon Web Services (AWS) and Microsoft Azure, both topped 2017 growth expectations, and Software-as-a-Service (SaaS) grew by over 20%.
While enterprises are looking to the cloud for technology purchases, the assumption that the cloud is the default solution has been put to the test over the past 12 months. Choosing cloud for applications like enterprise collaboration has proven successful, but shifting the heavyweights, like Enterprise Resource Planning (ERP) and Supply-Chain-Management (SCM) requires skilled resources and time. And so, I anticipate that we will see emphasis on multi-cloud solutions. Not just the traditional public vs. private cloud, but a multifaceted solution that encompasses hybrid-SaaS models, edge computing, and the Internet-of-Things (IoT).
The ongoing cloud transformation, will continue to create disruption and complexity. Cloud Management Platform (CMP) providers will need to be able to abstract the complexity and solutions like Snow will need to provide actionable intelligence for managing and bridging disruption and addressing risk on a holistic level.
To address risk – beyond compliance, cost of procurement, overspend, and audit fines – 2018 will see cloud application discovery (CAD) broadening to extract additional information, such as security and privacy-sensitive data from the corporate network.
As IoT and AI technologies mature, they will create additional layers of complexity in software licensing. The IoT differs from traditional systems architecture because the software, hardware, and communication systems connecting them to a point of central processing are customized for each IoT application. Almost the opposite of the evolution of mass-market enterprise software toward multi-platform hardware-agnostic solutions.
The IoT architecture requires the collaboration of multiple stakeholders – such as device manufacturers, software vendors, network operators, and service providers – all with distinct business goals and revenue strategies. But who is responsible for ensuring compliance?
Traditional licensing scenarios tend to be agreed between two parties: the vendor and the consumer. But in a single IoT application, multiple vendors and users are present. In closed IoT systems, it is likely that the provider packaging the service will manage licensing responsibilities, ensuring that costs are covered through subscriptions to the service. But, as the IoT evolves and services become chained and mashed together with the potential to connect billions of devices, insight and due diligence in licensing agreements is fundamental to avoid the potentially catastrophic consequences of, for example, indirect usage.
I don’t think we will solve these issues in 2018, but I believe we will start to see the evolution of API-based licensing metrics. According to Gartner:[i] Many of these will be new pricing metrics that have not been used widely before and that are deemed to be more aligned with the digital economy. For example, with application programming interface (API)-based licensing, license or subscription fees are based on the number of interfaces or the volume of interactions that pass-through APIs.
In the second part of this post, I will talk about data, openness, and decentralization. In the meantime, if you are looking for solutions to help you with managing cloud, or ensuring GDPR compliance sign up for a Play-in-the-Snow event near you, where you can see our solutions in action and get answers to your questions – check out our events page.
[i] Gartner, April 2017, Prepare for Big Changes in Software and SaaS pricing, Driven by AI and IoT https://www.gartner.com/doc/3672417/prepare-big-changes-software-saas