New Studies Reveal the Changing Face of IT Management

Two new studies from prominent research teams reveal the changing face of IT management and procurement.

In particular, the new studies from The Economist and Forrester Research, respectively, reveal that new technologies including the cloud, and business trends including bring your own device (BYOD) to work, are having a transformative impact on IT professionals.

According to The Economist, IT departments are becoming brokers of third-party services for their for the business users, not just builders of these services. To wit, 63 percent of line-of-business executives (LOBs) told the research arm of the publication that “their use of external IT resources brokered by internal IT departments will increase over next three years.”

The finding underscores the willingness of corporate IT professionals to change roles but not yet give up control or at least influence over IT investments.

For providers of cloud services, this could be a welcome development.

“CIOs are increasingly looking outside the enterprise,” according to The Economist. “Thirty-two percent will boost IT and business process outsourcing to reduce the need for enterprise IT services over next three years, [while] 31 percent will offer fee-based services in parallel with external providers.”

A third of all survey respondents say developing partnerships among corporate IT, LOBs and third-party providers is their No. 1 challenge when it comes to developing innovative solutions.

“The IT landscape is changing too fast – thanks to mobility, computing-as-a-service, process automation – for CIOs to keep up with line-of-business technology needs. To gain more flexibility to respond to changing market conditions, LOBs and CIOs are moving towards a ‘blended model’ of IT service delivery that merges internal IT capabilities with third-party services,” the new report concluded.

On a similar note, Forrester recently concluded that the growth of public cloud services is soaring — and likely to reach an estimated $191 billion by 2020.

“While the last several years can best be characterized as exploratory for most enterprises,” Forrester concluded, “cloud services and cloud platforms are now an undeniable part of the IT landscape. And based on Forrester enterprise CIO inquiries, the shift has begun from exploration of cloud as a potential option, to rationalization of cloud services within the overall IT portfolio.”

This shift to a “second stage” of technology adoption will likely yield significantly higher market revenues than the exploratory phase.

“Clearly the bulk of this market’s revenues come from software-as-a-service (SaaS) solutions which accounted for $36 billion in revenue in 2013. This segment of the market is significantly more mature and well established in several application categories. Cloud platforms, led by Amazon Web Services LLC, were only collectively $4.7 billion last year but are maturing quickly thanks to stronger recent solutions from traditional IT partners IBM, HP and Microsoft,” Forrester said.

Among its key findings: SaaS will shift toward replacement of existing systems, and public cloud platforms will rival traditional infrastructure deployments by 2020.

“The CIO’s biggest battle will be the internal cultural, psychological and financial accounting barriers born in a different age that will take decades to change. Start the fight now,” Forrester said.

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