Transformative Impact On The IT Landscape
What significant changes did the enterprise software sector witness in 2013? What did these changes mean to vendors and customers?
There were various forces that came together that had and will continue to have a transformative impact on the IT landscape and change the role of the IT department. IT has moved from a business function responsible for making sure ERP systems work, pushing bits to customers, and providing support, to a strategic department that influences products and capabilities. As software continues to be provided as a service, where the R&D department begins and the IT department ends were blurred in 2013, and will continue to be blurred. Regardless of whether IT departments choose to make choices based on the status quo or step into the mainstream and take an analytical role with big data, the IT department as we know it is evolving in a way that it will never be the same. The role of the IT department could come down to the role of the CIO. A CIO who has a seat at the business table is vastly different than a CIO who doesn’t have a role in strategic business decisions. Strategic CIOs are focused on business planning and not simply resource planning. Their time horizon is different; they think and talk in terms of 5+ year cycles. For IT departments to stay at the business table, their CIO will need to be a strategic thinker who can provide the capabilities needed to extract the value being gathered by the influx of information. The implications of these changes are still being realized by vendors and customers.
What are some of the changes you had anticipated would happen in 2013 but did not happen?
The thing that has surprised me the most in 2013 is the speed with which enterprises have embraced cloud computing - whether that's moving workloads to public clouds or using SaaS applications. Generally, major trends in enterprise computing happen over decades, but cloud adoption is accelerating right in front of our eyes. For example, the momentum behind OpenStack and enterprise interest in it is tremendous. Clearly, enterprises see the value in cloud architectures and are moving fast to get there.
Can you paint us the picture of how the landscape for software sector will change in 2014? What are some of the broader trends you are closely watching?
I believe 2014 is going to be a defining year for the technology industry. This will be the year when cloud architectures go from experimentation to deployment, where big data goes from promise to production, and when we get our first glimpse at how these innovations could potentially change our world. There have been many Web 2.0 companies that have been using big data for some time now. But, we haven’t seen as many mainstream corporate companies tap that same power. That’s about to change, and in ways that will fundamentally impact us all.
Can you highlight how customer spends will change in 2014 for enterprise software? What makes you think customers will be buying more/ less?
We will continue to see a rotation of spend out of "lights on" infrastructure to customer facing functionality. As open source and x86 continue to bring down the cost of computing, dollars that used to be earmarked for raw capacity can be reallocated to revenue generating activities. Forward thinking CIOs are becoming more proactive in looking for ways that IT can help drive the top line. I don't think it's a matter of buying more or less - budgets will be relatively flat or grow a couple of percentage points - but the content of the spend is becoming more "front office" rather than the traditional back office.
What's in store for your company in 2014?
I’m proud that 2013 will go down as the year Red Hat established industry leadership in OpenStack and Infrastructure-as-a-Service (IaaS). We’ve put a stake in the ground as the leading corporate contributor to OpenStack in both of the last two community releases. Beyond our work in the OpenStack community, we’ve established Red Hat as an enterprise OpenStack leader. In June 2013, we introduced Red Hat Enterprise Linux OpenStack Platform to much industry excitement, and we’re optimizing the rest of our portfolio for OpenStack – including our hybrid cloud management solution, Red Hat CloudForms, Red Hat Storage, and OpenShift by Red Hat, our Platform-as-a-Service (PaaS) offering. In less than a year, we built the world’s largest ecosystem for commercial OpenStack deployments. And recently, we announced a significant collaboration with our longtime partner Dell to jointly engineer enterprise-grade private cloud solutions based on OpenStack. Thinking back to the earliest days of enterprise Linux, it was building an ecosystem of this same magnitude that helped propel Red Hat Enterprise Linux to its place as a dominant player in enterprise datacenters.
What’s compelling to me is open source has and continues to play a key role in the development of emerging technologies – from cloud to big data to social to mobile. There's been a fundamental shift in how technology is created and consumed, and today’s technology landscape would look dramatically different without open source. It is a proud moment for us at Red Hat and the broader open source community as we believe open innovation has truly surpassed proprietary innovation. While we’re still in the early days in the fundamental shift I describe above, I’m proud that Red Hat is a leader helping to drive the next era of technology. I wake up every day excited about Red Hat’s potential, and we’re working hand-in-hand with our partners and customers to deliver on the power of open source innovations.