Industry executives and experts share their predictions for 2022. Read them in this 14th annual VMblog.com series exclusive.
The Great Rebalancing
By Roy Ritthaler, Chief Marketing Officer at Flexera
Right before re:Invent this year, longtime MIT researcher Professor Joe Peppard wrote in the Wall Street Journal that “It’s Time to Get Rid of the IT Department.” Peppard observed that IT shouldn’t-and won’t-be isolated.
That’s a bold vision. And in a lot of ways, Flexera is observing the same thing.
Is IT going away? Maybe not fully, but we do see the growth of four major buying centers for IT: IT, cloud, procurement, and security. The last three aren’t traditional central IT, but will become increasingly important in the coming years.
Simultaneously, IT is going on the offensive, playing a more strategic role in helping organizations transform. The proof is in the rates and amount of investment, as well as the explosive number of apps being launched to execute digital transformation use cases. On the funding side, IDC predicts that by 2024, “more than 50% of all IT spending will be directly for digital transformation and innovation (up from 31% in 2018), growing at a CAGR of 17% (versus 2% for the rest of IT).” The same report from IDC also calculates that “by 2023, more than 500 million digital apps and services will be developed and deployed using cloud-native approaches,” with most of them positioned to meet use cases tailored to specific industries.
With this type and rate of innovation promised in the next few years, we see three major IT trends that promise to turn enterprise P&Ls upside down in 2022.
1. Consumption will be the norm.
Real-time insight and optimization are more important than ever in order to gauge how users are consuming and engaging with software, apps, and services. As indicated in research from Revenera, more than a third of software executives (37%) expect that usage-based software monetization models will grow as a percentage of overall software license revenue. As usage- and consumption-based models grow, so does the need for usage data-insights into how users engage with software. The collection of this data needs to be streamlined, with insights easily available throughout an organization, in order to efficiently support the decentralization of IT.
2. Public cloud usage will put pressure on ongoing optimization.
Some industry estimates say that for every data center workload, there are three public cloud workloads. Spend on cloud infrastructure now significantly exceeds that on data centers, with overspend and margin impact becoming a concern for SaaS providers and enterprises.
With the great rebalancing, enterprises (and SaaS providers, in particular) will need to focus on cloud cost optimization initiatives. Cloud migration has always necessitated a focus on ongoing costs, not just the initial move. Managing these expenses deserves renewed focus as the number of workloads in the cloud grows exponentially.
3. Customers will build new digital platforms.
Part of IT’s transformation within an organization is being driven by the expansion of AI Ops, DevOPs, FinOps, and SecOps. These new focus areas create agile and accelerated technology lifecycles, launching “digital platform” architectures to govern cloud infrastructure and services.
This is one area where traditional IT could remain a central point of control for IT. To manage the increasing complexity in these hybrid IT environments, IT leaders will need to be able to visualize their entire estate, from on-premises to SaaS and cloud. Increasingly important to this goal will be the ability to tap into a single source of truth about overall technology spend (including technology spend composition) and related impacts (such as the vulnerabilities present in software and devices purchased and maintained by multiple IT buying centers).
Regardless of whether IT is actually going away, it is very true that more people are going to be buying IT services across organizations. 2022 will provide an opportunity to focus on rebalancing initiatives to support long-term growth.
##
ABOUT THE AUTHOR
Roy Ritthaler, Chief Marketing Officer at Flexera
Roy Ritthaler is responsible for shaping Flexera’s relationship with prospective and current customers. Throughout his career, Roy has led engineering, go to market and strategy, but his passion lies in customer value and helping them be successful with the solutions they buy and deploy. Prior to joining Flexera, Roy was Vice President of Go To Market for Cloud Management at VMware. Before that, he was with Hewlett Packard and MicroFocus as the head of Marketing for its IT Operations software business, which spanned the cloud, data center, and IT. Roy began his career as an electrical engineer at IBM in Toronto after graduating from Canada’s McMaster University. He loves his family, Rush and the Toronto Maple Leafs.
