When Computing Becomes Human: Automation, Innovation, and the Rise of the All-Powerful Service Provider

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2 When Computing Becomes Human: Automation, Innovation, and the Rise of the All-Powerful Service Provider Michelle Bailey GVP/GM and Research Fellow Datacenter and Cloud

3 Human Industry Human Productivity Human Innovation Computing Becomes Human

4 The Realities of Business Transformation Taking the Long View in a Services-Based Economy Source: Bureau of Economic Analysis, Nov, 2017 Economic growth is increasingly tied to a human workforce US and WW economies move dramatically to services based economies

5 Industry with Highest Employment by State Jobs Move Quickly with the Shift to Services Source: BLS, Major industries with highest employment, by state, Health care and social assistance Retail Trade Manufacturing Accommodation and food services Professional and technical services

6 Technology has driven massive efficiencies in industry, particularly since the mid-80s Services Productivity has Been Elusive Source: Bureau of Labor and Statistics, Feb 2017; Workers Measured as full-time equivalents Historically gains in productivity have always led to an increase in the standard of living & innovation Higher wages Higher profits Higher economic growth Lower unemployment (Re)education & new technology investments are critical success factors for services efficiency

7 Number of WW Patent Filings Intellectual Property at an All Time High WW Patent Filings Exploding Digital Innovation 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 Other Europe Japan Korea China US 3 million+ patents filed WW in % China 7 million+ Trademarks filed WW in % China Source: WIPO statistics database, December

8 Percent of Sample Top Business Goals Focus on Innovation and Efficiency Source: IDC s Cloud and AI Adoption Survey, January 2018, N=400

9 but not all at the same rate 60% Businesses Increasingly Invest in Digital Capabilities Product and Service Delivery Shifts to Digital Infrastructure Source: IDC s Cloud and AI Adoption Survey, January 2018, N=400 Digital Infrastructure 48% Digital Infrastructure 57% 50% 40% 30% 20% 10% 0% 56% 52% 50% 32% Late Adopters Early Adopters Today Two Years

10 AI Impact on the Workforce Productivity and Innovation Q. What impact do you believe Artificial Intelligence will have on your organization s workforce? Source: IDC s Cloud and AI Adoption Survey, January 2018, N=400

11 100 The Battle for Mindshare Perceived Leaders Across IT Transformation, Cloud and AI Source: IDC s Cloud and AI Adoption Survey January 2018, N= IT Transformation Leader Primary Cloud Hosting Provider AI Leader Long-term value Technical Expertise Innovation Partnering Performance Efficiency Integration Cost Speed All Others Intel Tesla Cisco Rackspace Apple Facebook Dell Amazon IBM Google Microsoft

12 Cloud, Security & Data are the Underpinnings for IT Transformation Rate your organizations investment in the following technologies over the next 5 years in terms of meeting your business goals where 0=no investment and 10=significant investment. Source: IDC s Cloud and AI Adoption Survey January 2018, N=400 Cybersecurity protection Cloud-based infrastructure and applications Customer experience management systems Data integration across lines of business & platforms Agile software development processes Mobile platforms & applications Data mining and analytics Governance/regulatory tools Social-media business workflows IOT/Sensor-based technology Artificial intelligence/machine learning/deep Learning 3D printing Robotics Wearables/AR-VR % Rating % 41% 40% 38% 38% 37% 33% 32% 31% 52% 50% 48% 45% 44%

13 Substantial Workload Shift to Cloud Environments Private Cloud a strong focus for on- and off-premises solutions Source: IDC s Cloud and AI Adoption Survey January 2018, N=400 Focus shifts from efficiencies & cost savings to speed & performance Application churn, particularly for non-cloud on premises apps favors private clouds Cloud management the glue for the increasingly complex application portfolio

14 Multi-Cloud Adoption by Type Multi-Cloud Connection Points Customers Default to Multi-cloud Environments Private Cloud a strong focus for on- and off-premises solutions Source: IDC s Cloud and AI Adoption Survey, January 2018, N=400

15 70% use a provider to either build or maintain their multi-cloud environments Opportunities for Service Providers in Multi-Cloud Build, Manage, Integrate Source: IDC s Cloud and AI Adoption Survey January 2018, N=400 SP opportunity is to move beyond the build phase for multi-cloud Focus on the customer lifetime value Preference is for a single supplier to manage the whole environment Integration and automation tools become critical

16 80% of Cloud Budgets are Above Infrastructure Emerging Services for Cloud Acceleration and Enhanced Management Source: IDC s Cloud and AI Adoption Survey January 2018, N=400

17 Top Infrastructure Services Cloud Demands a New Portfolio of Services 66% 61% 60% 53% 39% Source: IDC s Cloud and AI Adoption Survey January 2018, N=400 Hosted Private Cloud Dedicated Servers Public Cloud/IaaS Basic Website Hosting Bare Metal Servers

18 Top Application Services Cloud Demands a New Portfolio of Services 53% 43% 43% 43% 41% 41% Source: IDC s Cloud and AI Adoption Survey January 2018, N=400 Security /US/ Productivity Database/ DW Data Analytics/ BI/Big Data Website Platforms Business Applications

19 Top Managed Services Cloud Demands a New Portfolio of Services 58% 44% 44% 40% 40% Source: IDC s Cloud and AI Adoption Survey January 2018, N=400 Backup & Recovery Disaster/ Site Recovery 24 x 7 support Mobile services Archiving

20 Top Security Services Cloud Demands a New Portfolio of Services 47% Web Application Firewall (WAF) 46% Endpoint Security 45% Advanced Anti Malware/Anti-APT 42% Secure Configuration Management (SCM) Source: IDC s Cloud and AI Adoption Survey January 2018, N=400 41% 41% 40% 40% Data Encryption SIEM Data Loss Prevention (DLP) Identity Access Management (IAM)

21 Top Professional Services Cloud Demands a New Portfolio of Services 56% 55% 58% 53% Source: IDC s Cloud and AI Adoption Survey January 2018, N=400 Cloud Migration Services Cloud Integration Services Cloud Strategy Services Cloud Assessment Services

22 Cloud Becomes a Long-Tail of Services

23 C L O U D P R O V I D E R S ISV s C U S T O M E R S MSP s Cloud Demands a New Class of Partnerships Sell To Hoster s Cloud Specialists Enterprise Customer Sell To Colo s Telco s Outsourcers / SI

24 C L O U D P R O V I D E R S ISV s D I S T R I B U T O R S CUSTOMERS MSP s Cloud Demands a New Class of Partnerships Sell Sell To Through Sell Through Hoster s Cloud Specialists Colo s Telco s Outsourcers / SI Cloud Brokers Distributors Enterprise Customer Resellers / VARs

25 C L O U D P R O V I D E R S ISV s D I S T R I B U T O R S CUSTOMERS MSP s Cloud Demands a New Class of Partnerships Sell Sell To Through Sell With Hoster s Cloud Specialists Colo s Telco s Outsourcers / SI Cloud Brokers Distributors Enterprise Customer Sell With Resellers / VARs

26 Shifting, Disaggregated Application Portfolio 50% growth in the typical application portfolio Complexity in management rises quickly over the next two years 38% of applications will be built using modular development frameworks 50%+ of all applications at remote/edge or provider datacenters Each business application already has 4 8 other application dependencies 49% expect high application interdependencies (up from 19% today)

27 Opportunities with the IT Organization Bridging the Technology Skills Gaps Source: IDC s Cloud and AI Adoption Survey, January 2018, N=400

28 IT jobs are projected to grow at twice the national rate in the US over the next 10 years US IT Jobs Growth, Source: Bureau Labor Statistics, Employment 2026 Projected Employment All Other DBAs, Sys. Adminis. & Network Architects Systems Analysts Computer Support Specialists Software Developers & Programmers Computer & Information Research Scientists Information Security Analysts Computer IS Management Demand for highly skilled IT labor is constrained Bachelor degree minimums Experience counts Large retiring workforce H1B visa uncertainty limits international employee hiring Computer Science graduation rates have grown in the last 10 years, but well below other technical industries Healthcare = 168% Biomedical Science = 67% Engineering = 51% Computer Science = 10% Only 59% of all computer science graduates report working in a job that is closely related to their degree Training, Re-skilling and sponsorship of certification programs to re-boot the IT worker pipeline

29 47% 57% 75% Women in the Workplace US Workers are women US College graduates are women of US Healthcare workers are women

30 The Opportunity for a Diverse IT Workforce 25% US IT workforce is women 18% US Computer Science graduates are women 13% US Computer Programming graduates are women 8% Primary Patent Holders are women

31 What Matters in the Next Generation Enterprise T E C H N O L O G Y P A R T N E R S H I P S P E O P L E Cloud Data AI Cybersecurity Partner Well with those that Partner Well Humans Matter, Diversity Matters

32 For More Information Michelle

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