Enterprise 20/20 Volume 1


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Enterprise 20/20 Volume 1

  1. 1. Outlook 2
  2. 2. Think about all the change that has occurred in the past 10 years—from thesocietal to the individual, from the economic to the technological. Thesechanges have not just affected the enterprise, they’ve redefined it. And ofcourse, the rate of change is only accelerating. 3
  3. 3. So, what will a successful enterprise look like in15 years? Or 10? Or even 5?How will it interact with customers, engage partners andempower employees? How might its business models,operating principles and organizational structures differfrom today’s enterprise? 4
  4. 4. To imagine the future of the enterprise, we mustunderstand the forces that are transforming our world 
and the technological innovations that are shaping 
the future. How will our professional and 
personal lives be different? And in what 
new and unexpected ways will technology 
work for us?Individually, we are at best nearsighted tochanges that will affect the enterprisein 2020 and beyond. 5
  5. 5. But if we gather thousands of thinkers from the enterprisecommunity, provoke one another to discuss the global,social, business and technological trends that are beginningto emerge—and help each other arrive at some consensus—then each of us will be better prepared not only to bringthe challenges of the future into focus, but also to help ourorganizations do the same. 6
  6. 6. Enterprise 20/20 is a collaborative effort to imagine,discuss and debate the future of the enterprise.This six-month experiment—presented by HP anddriven by the enterprise visionaries, industry leadersand technology experts who make up our communityof customers—will result in a full-length, cloud-enabledbook about what it will take for enterprises to succeedin 2020 and beyond. 7
  7. 7. Together, we will examine trends, challenge assumptionsand ultimately drill down to the very issues that matter most—to the boardroom, the applications team, the marketingdepartment, the IT operations center and the CIO’s office. 8
  8. 8. I.1 Community Discussion HighlightsChanges ahead differently depending on the device. And, context would travel 
 between devices.” Luigi Tiano sees the tablet becoming the de facto device for mostEnterprise 20/20 is a collaborative effort with our community computing: “In my opinion, the tablet will become a commodity (its on itsmembers, and their comments help shape each chapter well after way) and it will become the standard tool for most individuals,” he writes.it’s published. On the following pages we take the pulse of the “Smart phones are great for a ‘quick fix,’ but I’m not sure they give us thatcommunity and highlight some thoughts from the Discussion Hub. ability to perform ‘heavy work.’” What will the enterprise of 2020 look like? This question–and the A cloudy future questions that spawn from the myriad answers–is what this community-sourced project endeavors to answer. Obviously, no For all the conversation around devices, the ability to have access one answer is correct; no one can see the future. But the ideas anytime, anywhere is still of utmost importance. Indeed, it is driving a generated from the Enterprise 20/20 community can help lead us number of conversations around cloud computing, including whether it is down the path.
 the technology of the future.“I think that the "apps of the future" will be multi-client. They will Community member beemaraj believes the cloud’s usefulness in aboutsupport One premise–that TVs, smartphones and other devices 15 years: “Cloud will remain for another decade and its successor can beas we know them will disappear, and the “smartphone of the expected around 2025.” Luigi Tiano agrees, although doesn’t believe thefuture will be in your brain”–generated much conversation among cloud will “go away”: “I am a strong believer that the cloud will continue tocommunity members, who for the most part believe we always will grow until it becomes the standard for both organizations andneed some form of physical device in our daily lives. individuals,” he notes. “The name may change to something less ambiguous, but the concept will remain the same.”“I think that the "apps of the future" will be multi-client. They willsupport smartphones, tablets, laptops and where appropriate and “Much of it depends on your definition of ‘cloud,” says Charles Bess. “If itincreasingly, the TV,” notes Mike Shaw. “The client would behave means increased flexibility in the consumption of abundant resources, 9
  9. 9. I.1 Community Discussion Highlightsthen it will be with us for a long time and part of whatever is to come. Ifyou view it as a more limited IaaS capability, than there is the wholeflexible value stream of IaaS->PaaS->SaaS->BPO->Consulting thatprovide more capability and additional flexibility where it can 
be adopted.” “ I am a strong believer that the cloud will continue to grow until it becomes the standard for both organizations and individuals.” – Luigi TianoOther technologies may come and go by 2020, but most communitymembers agree cloud computing is a technology whose time hascome–and will be around for the long haul. Go to the next Community Discussion page 10
  10. 10. WorldWhen you think of 2020 what comes to mind? Forsome, “20/20” means perfect vision. For others,2020 is a not-too-distant point in the future, just farenough to be somewhat fuzzy—or, depending onyour point of view, completely obscure. 11
  11. 11. I.2 WorldImagining the world of tomorrow means lookingat the world of today, learning from the lessonsof others, and being open to challengingnew ideas. Here are six trends we think willshape our world by 2020 12
  12. 12. I.2 World1 Young and old, more people will live on and shape our planet.Between now and 2020, nearly 1 billion youth will reach adulthooda. Enterprise implicationsThis next generation of parents, leaders, workers and educators will The digital youth entering the workforce will expect what today’s digitalfind themselves surrounded by more people. Older people, younger natives expect: intuitive, 24x7 mobile access to information and thepeople, richer and poorer people. use of social tools to improve their effectiveness.Many of these people will come of age in developing nations. But what Active seniors will bring valuable experience to the workforce, providedwill be different is that they will have grown up more aware of their we design flexible environments (virtual or mobile offices) and applyworld, connected through media and mobility to a global grid and a our ingenuity to delivering effective and efficient health care.context to match. To address the consumer preferences of the social media-savvyAnd with the exposure will come the desire for change – for access to generation, enterprises will need to extract meaning from the massivemore and better goods and services, education, opportunities and amounts of text, video and audio content that exists. And targetinghealthier, richer lives. consumers, while negotiating their strong desire for privacy, will require smarter analytics and more computing power than ever before.Simultaneously, we’ll see the graying of the population in so-calleddeveloped countries. In total we’ll have nearly 7.6 billion people,including 23% more people over 75 years old, 30% more people over80 years old and 58% more over 90 years oldb. These seniors will bemore active and will work longer whether because of better health,financial need or personal passion. 13
  13. 13. I.2 World Moscow 11,730,000 Tokyo Los Angeles 37,280,000 13,250,000 New York CityRise of the Mega Cities 1 20,430,000 Osaka16 of the largest 20 cities 11,530,000of 2020 are in today’s Cairo Shanghaideveloping nations 14,020,000 12,630,000 Developing Highly Developed Mexico City Istanbul 21,810,000 12,760,000Projected total of growth %, 2006 TO 2020 Karachi 18,940,000Tokyo 4.9%Mumbai 37.9% DelhiDelhi 61.4%Dhaka 68.3% São Paulo 25,830,000Mexico City 13.4% 21,570,000 Rio de JaneiroSãoPaulo 15.9% Lagos Mumbai 13,230,000Lagos 83.7% 21,510,000 25,970,000 Metro ManilaJakarta 51.9% Dhaka 13,400,000NewYork 9.6%Karachi 55.2% 22,040,000Calcutta 27.3%Buenos Aires 14.5% Buenos AiresCairo 24.2% 15,480,000Metro Manila 24.0%Los Angeles 8.4% JakartaRio de Janeiro 13.8% CalcuttaIstanbul 27.5% 20,770,000Shanghai 0.0% 18,540,000Moscow 8.4%Osaka 1.8% 14
  14. 14. I.2 World2 The middle class in developing countries will redefine markets.In parallel to population growth, we’ll see a marked shift in the balance The shifting middle classes2of economic power. Western tastes and influences will no longer Global top 10 consuming middle classes (Global share of purchasing power parity)dominate the world consumer goods market, as the buying power 2009 2020 2030of middle classes in China, India, Brazil, and Russia booms. United States 21% China 13% India 23% United States 12% Japan 8% China 18% India 11% Germany 6% France 4% Japan 6% United Kingdom 4% Germany 4% United States 7% Russia 4% Russia 3% China 4% Indonesia 4% France 3% Italy 3% Indonesia 3% Japan 4% Mexico 3% Mexico 3% Russia 3% Brazil 3% Germany 2% Mexico 2% Brazil 2% France 2% 15
  15. 15. I.2 WorldWe should expect to see global tastes in fashion and entertainment Enterprise implicationsmore influenced by these newly dominant economies. The increasing As more countries challenge the West’s economic power, enterprisesconnectedness of our 20/20 world will have a major impact on the rate everywhere must rapidly react, plug into and reach the newly dominantat which attitudes and tastes from one culture assimilate globally. cultures in the world of 2020.“Likes” will promote Chinese pop artists, Indian fashion labels, andRussian consumer goods at a rate unimagined to advertising Success will require a blend of hiring people who grew up in theseexecutives from the previous century, buoyed by pride in local heroes, growth economies as well as flexible and adaptable businessstyles and products, and social networks combined with digital reach processes that develop products, services and messages to meet localconnecting millions. preferences, tastes and needs. Enterprises will require advanced analytics and flexible business processes (most likely comprised of cloud-based services) to adapt to rapidly emerging and varying market opportunities. 16
  16. 16. I.2 World3 Resource scarcity will make us more resourceful.Necessity breeds invention. Scarcity of natural resources, from energyand water to precious metals to arable land, will be starting points for Population growth and the riseinnovation. Population growth and the rise of the middle class is driving of the middle class is drivingconsumption around the globe. consumption around the globe.As our existing resources become scarcer and more expensive, we willfind new ways to improve our lives and the health of our world,knowing that failure will lead to austerity, or worse. Enterprise implications Enterprises will capitalize on new product and services opportunities inWe foresee our society innovating new means of energy production, existing markets that are challenged by resource scarcity. Already,creating more comfortable and energy-efficient housing options to venture capitalists are betting billions of dollars on new energysupport our ongoing migration to cities, and eliminating shortages of concepts, and enterprises will apply new techniques to improve yieldseducated workers by using the Internet to boost literacy rates and on everything from agricultural production to resource extraction.marketable skills. For internal improvement, enterprises will employ energy- and water- efficient strategies even as they grow compute, storage and network capacity to meet the growing demands of an increasingly digital populace and business environment. Increased use of cloud computing will provide flexibility to tap spare capacity with limited waste. 17
  17. 17. I.2 World4 Most of us will live in cities.Urban areas will be home to more than 60% of the world’s population In particular, they hold the promise of lower carbon footprints perby 2020c, up from about 50% in 2007d. This includes more than 70 dweller and convenient physical access to services includingcities with more than 5 million residents and more than 25 megacities education, health care and transportation. Also, the population densitywith 10 million-plus residentse. of cities makes access to high-bandwidth Internet more affordable to provide and consume, which in turn provides convenient digital accessCities have their problems, including the potential for inadequate to goods, services and markets.housing, congestion and pollution. But well-run cities have attributesthat will improve living conditions and our planet over time. 18
  18. 18. I.2 WorldEnterprise implicationsIncreasingly, high-bandwidth access to over half of the world’spopulation provides numerous opportunities for enterprises:• Enterprises will engage and interact with customers (and citizens) in rich, expressive, multi-media experiences 24x7. Imagine consumers around the globe trying your latest athletic shoe in a digital 3D augmented-reality experience.• Enterprises will design rich virtual working environments to engage the best and brightest employees or contractors – wherever they reside.• At the same time government agencies and businesses alike will need to bring design and technology solutions to improve housing and transportation systems, solve traffic gridlock, to increase energy efficiency of buildings and find ways to use mobile and other solutions to serve the 40% still in towns and rural areas. The use of sensors to manage traffic flow and lighting in cities has already started, but should be even more intelligent with the technologies emerging by 2020. 19
  19. 19. I.2 World5 We’ll lose our village connections, but gain cyber connections.Our connectedness and the pervasiveness of information continue to Enterprise implicationshave positive impact. Social media is increasingly informing marketing Increasingly, enterprises will amplify their intellectual property byand new product development, but it is also widely credited as a major creating virtual value chains of specialists—contractors, smallfacilitator of the Arab Spring of 2011. businesses, other enterprises—that can help them take ideas to value rapidly. Social collaboration and the cloud will enable these virtual valueIn 2020 we’ll see it in even wider use to connect people with their chains to rapidly assemble, collaborate and realize new marketpersonal and professional contacts, as well as communities of interest, opportunities, then dissolve and reintegrate around the next opportunity.businesses and governments. People will increasingly take advantageof bandwidth enhancements to express themselves in rich multimedia Sentiment analysis across social networks will help elected officials andwithout being constrained by character counts. marketers stay in touch with the citizens and markets they serve. In addition, use of social networks to support election candidates will beYet there will be tension as increasingly busy lives and the deluge of commonplace around the globe.information threaten to overload our brains. The digitally savvycitizens of 2020 will appreciate the people, enterprises and Enterprises will need to make sure they engage effectively—in a timelygovernment agencies who engage selectively and intelligently helping and targeted fashion. The replacement of text-based socialthem balance the glut of information with their poverty of attention. communications (SMS, tweets) with video messages at global scale will necessitate the use of advanced analytics that render a precise understanding of the meaning and sentiment embedded in unstructured information. The popularity of video as a communication medium will also drive demand for more compute, network and storage capacity. 20
  20. 20. I.2 World6 We will wrestle with our often conflicting needs for security, privacy and open access to information.As we share more of our personal data across social network sites, In 2020, the threat of identity misuseonline retail, banking, utilities and municipal services in 2020, thethreat of identity misuse and cyber crime will be ever present. Sensors and cyber crime will be ever present.we wear to monitor our health and that line the streets to control trafficas well as the mobile devices we carry will feed millions of updates tosystems that can be used for good — or misused for ill. Regulators will try to protect the populace from cyber criminals, rogueBusinesses and governments will try to balance the demands of traders and nefarious corporations. Executives will be held personallycustomers and citizens for constant access to information while responsible for managing the tradeoffs between ensuring the welfaremaintaining appropriate security and privacy controls. But hackers, of their customers, employees and personal reputations, andcyber criminals and cyber terrorists will continue to troll for new ways leveraging the value of personal information.to target organizations with denial of service attacks and data theft. 21
  21. 21. I.2 World Hackers, cyber criminals and cyber terrorists will continue to troll for new ways to target organizations. Enterprise implications Boards and enterprises that haven’t already done so will appoint C-level executives to manage security, privacy, risk and compliance. Commercial and government organizations will outsource sensitive IT processes to secure cloud providers. These providers will employ former national intelligence specialists to continuously monitor and safeguard information at every level from infrastructure through to software applications. We will find new ways to help customers, employees and citizens understand and make tradeoffs between access and security. 22
  22. 22. I.2 Community Discussion HighlightsCommunication “Although some countries have announced a national broadband plan, access to ICT is still limited in many places in the world,” writes Luis Minoru Shibata. “ICT access in the metropolitan or main urban areasbreakdown around the world is evolving. However, the lack of infrastructure and/or the limited purchasing power of consumers in other areas may create a huge gap in the society.”Enterprise 20/20 is a collaborative effort with our community members,and their comments help shape each chapter well after it’s published. Other community members believe currently underdeveloped countriesOn the following pages we take the pulse of the community and will “leapfrog” into ubiquitous access using alternative technologies. “Imhighlight some thoughts from the Discussion Hub. sure we will get there by 2020. If we see the speed at which things have moved forward over the last 5 years, I cannot imagine we have not resolved the technical issues by then. And the emerging countries will be htt Members of the Enterprise 20/20 community believe many of the trends discussed in this section will impact the advancement of first as they are not stopped by old infrastructure,” notes 
 technology in 2020, but two of the most popular topics emerging Christian Verstraete. were whether information and communications technology will be more widespread globally by 2020 and how different societies and “An interesting question that may develop: Will the definition of ICT HHHHHHHHHHHHH cultures impact the enterprises of their respective countries. change so that it is available everywhere?,” asks Charles Bess. “Or will it HHHHHHHHHHHHH Opinions were spirited on both sides of the fence. change in the other direction, increasing in capabilities and requirements to the point where it is available to an ever more concentrated group of people (e.g., urbanites)?”Glass is half fullWhen posed the question, “Will ICT be available and accessible to ICT: Glass half emptyall anywhere in 2020?” some community members see a futurewhere information and communications technology will be more Still others took a pessimistic view of the future. “There will always bewidespread than today, but the accessibility of technology will be some regions with lower access [and] it could become worse in future,based as much on financial benefit as on population densities. but this is a natural behavior ... We should not forget that the requirement 23
  23. 23. I.2 Community Discussion Highlightsin bandwidth and quality should probably be few orders of magnitude will grow up in a more global society,” he writes. “New generations will behigher to support the internet of objects,” writes Patrick DeMichel. agnostic to cultural differences.”The effects of culture on enterprises Horia Slusanschi, meanwhile, is more circumspect: “The main obstacle in global enterprises that impedes cultural harmonization is a lack ofWhile the future of widespread global ICT seems fuzzy, community awareness,” he writes.members were more definitive in their opinions of the “Impact ofprevalent mindsets in different societies, cultures and countrieson enterprises.” Indeed, they note, the global economy is forcingmany enterprises to adopt and adapt to meet the needs of all their “ When it comes to diversity, it iscustomers, both local and international.
 somewhat inaccurate to look at global“Obviously all these differences [between countries] have an impact onhow to run a business in a certain country,” notes Dennis Kruegel. trends while ignoring local ones.” 
“And especially for global companies this is obviously a big challenge – James McGovernin terms of successfully accessing the various markets and engageemployees with totally different backgrounds.”James McGovern agrees: “When it comes to diversity, it is somewhat Both discussions highlight the importance of communication to theinaccurate to look at global trends while ignoring local ones. ... We live success of any enterprise. Whether it’s the ability to communicate viain local societies where we tend to travel in circles of people who share information and communications technology or communicating with anattributes similar to our own.” increasingly global marketplace, enterprises must rise to the occasion to ensure their voice is heard.Paul van Ingen, meanwhile, believes the benefit of a globallyconnected society will impact younger employees the most. “Thoughthere of course are cultural differences, behaviors and preferences in Go to the next Community Discussion pagedifferent parts of the globe, I really believe that new generations 24
  24. 24. Technology“How can I help you?” This phrase sums up technology in 2020—systems that will workalongside us, helping us to maximize scarce resources, to process the deluge of sensor-and human-generated information and to gain insights to make progress rapidly. 25
  25. 25. I.3 TechnologyLooking at technologies that may be available by2020, and considering how they’ll help us realize ourfullest potential, is how we’ll solve the challenges ofthe next decade. 26
  26. 26. I.3 Technology1 Cognitive systems as human partners.Autonomous transportation systems will manage vehicle flow through amegacity of 20 million people. This will be made possible by combininga vast array of traffic sensors, advanced real-time analytics and theimmense computing power required to perform cognitive decisionmaking on the fly and at scale.Enterprise implicationsAs we increase our population densities, we must manage the systemsthat support us. We must know “what’s happening out there” in detail.And we must optimize our systems so that we don’t waste resourceswhile striving to improve our quality of life (one without shortages andhuge delays).We will see these cognitive systems used to manage utilities, emergencyservices and crime prevention. We’ll also see ultra-optimized supplychains where we know the position of every item in the chain. 27
  27. 27. I.3 Technology2 Computation re-imagined.The amount of data in the world is set to increase by 44 times from2009 to 2020f. This is due to the growth in unstructured data and thewidespread use of sensors to tell us “what’s going on out there.”Gathering all this data, analyzing it and then interacting with a worldof mobile humans is not possible with today’s computing andnetwork technology.By 2020, new computer/storage blocks will allow us to take in andprocess huge amounts of data in real time. And networks, especiallymobile networks, will be faster and able to securely handle the 33-fold increase in traffic we will see from 2010 to 2020g.The amount of data in the worldis set to increase by 44 times from2009 to 2020. 28
  28. 28. I.3 TechnologyEnterprise implicationsOur development systems must evolve to program arrays of hundredsof thousands of processors optimally.Our existing IT management systems won’t scale to manage suchenvironments. IT management in 2020 will be very good at flexing —adjusting to peak demands that could be 20, 50 or 100 times thenormal run rate.These systems must also be self-healing. We see this technologyevolving today with run-book automation; but to handle the systems of2020, self-adjusting and self-healing must be programmed in duringdevelopment, not bolted on after release.IT management in 2020 will be verygood at flexing - adjusting to peakdemands that could be 20, 50 or100 times the normal run rate. 29
  29. 29. I.3 Technology3 Insights to help humans.By 2020, robotic medical assistants will make the hospital rounds,detecting signals from sensors attached to patients. These assistantswill talk to “medi-cloud” systems that process the information to provideinsights and alerts to medical staff.We will augment and enhance our existing businesses by betterunderstanding our customers and the changes in our markets. We willinvent entirely new businesses by exploiting information at a velocityand on a scale that was previously unattainable. In the two decadespreceding 2020, some of the most successful Internet search, socialnetworking and gaming companies were built on the foundation of real-time analytics of large-scale data. 30
  30. 30. I.3 Technology As data continues to expand through increased human usage, people will increasingly value the time savings and convenience afforded by a system that understands our current needs and then, via micro- segmentation, targets content and offers based on those precise needs. By 2020, our scarcest resource will be our own attention spans. These systems will focus us on the things that are important. By 2020, our scarcest resource will be our own attention spans. Enterprise implications Product and service designers will need to design systems that: • Determine the human user’s current situation • Understand precisely what the person wants; and • Use powerful analytical ability to make highly focused and insightful suggestions. 31
  31. 31. I.3 Technology 32
  32. 32. I.3 Technology4 Personalizing the power of the cloud.By 2020, most of us will have mobile devices. These devices will be Mobile traffic multiplies6able to see what we are looking at, understand our gestures and Mobile traffic forecast in EB (exabytes) (1 EB = 1,000,000 terabytes)reliably know what we are asking. Yet they will lack the elastic, 2020scalable computing power and linkages to huge stores of 127 exabytesunstructured and sensor data that the back-end cloud will have. 2010 3.8 exabytes 33X INCREASE 33
  33. 33. I.3 TechnologyThis combination of advanced mobile front-ends and analysis-capable By 2020, our mobile devices willback-end cloud capability, however, will mean that applications willknow our wants and needs — in some cases, even before we do. be able to display 3D for us.Today, our mobile devices present information and conclusions to us ina way that is flat — literally. Humans can reason in 3D much morereadily, because that’s how we interact with the physical world. By Enterprise implications2020, our mobile devices will be able to display 3D for ush. Applications will be based on a client/cloud model. These applications will support a range of clients — mobile, smart TV, gaming device orFor example, an architect works with an architectural cloud service via laptop. The applications will connect to domain-specific back ends likeher mobile device. The resulting design is projected in 3D by the the aforementioned architecture cloud. We will be able to move frommobile device. Such technology is already in use for cancer drug mobile to smart TV to laptop seamlessly — the cloud service willdesign — but it’s very expensive and most certainly not mobile. remember our state as we “client hop,” and the application will scale our capabilities to match our current client. 34
  34. 34. I.3 Technology5 Dynamic services.By 2020, many more business opportunities will be served by clustersof affiliated specialists — individual consultants or small businessesthat join together to bring a product or service to market. Take, forexample, the explosion of mobile apps in this decade — frequentlythey’re built not by large integrated companies, but by an entrepreneurwho contracts out the design, animation, programming and back-endcloud services to various experts who coalesce to create and deliverthe app. People will increasingly work as “free agents” or will form intoclusters of small-to-midsize businesses (SMBs). In order to createproducts and deliver services, these dynamic mosaics of specialistswill be linked by advanced collaboration tools.The business processes that IT delivers will likewise be mosaics —mosaics linked by process management and integration technology.CIOs will thus become innovators, designing business processes andorchestrating services (as well as architecting the reliability, securityand cost/performance of these processes and services). 35
  35. 35. I.3 TechnologyEnterprise implications Service providers that offer cloud services to support SMBs will evolve.The speed with which teams can be formed from pools of affiliated They will provide aggregation services allowing SMBs to simply “plugspecialists will be a competitive advantage to the enterprise, as will be in and go,” creating fully functioning companies within a day.the degree to which groups are creative and productive. The enterprisethus needs to ensure it has excellent tools and processes to support Cloud will become common, secure and reliable. This will allow IT tosuch working methods. evolve from being a support function to becoming a key participant in business teams. Highly geared business process and application design tools, coupled with a rich array of cloud services, will allow IT to quickly create solutions that give the business competitive advantage.People will increasingly work as This will require a change of skills in the IT department, from people focused on operations, to people with skills at the intersection between“free agents” or will form into business analyst and IT designer.clusters of small-to-midsize We believe this is an exciting time for IT—the ability to injectbusinesses (SMBs). competitive advantage into business teams will mean that IT is highly valued by the business. 36
  36. 36. I.3 Technology6 Cyber-physical Systems.A pharmaceutical factory control system uses an array of sensors to Cyber-physical systems will accountconserve water, energy and material used in its factory. The systemreduces waste produced by the factory and ensures adherence to all for an increasing proportion ofrelevant eco-compliance levels. building, factory and vehicle costsBy 2020, we will all be acutely aware of the limits on our physicalresources — water, energy, minerals and food. We will employ cyber- as well as value.physical systems (systems built from and based on the synergy ofphysical and computational components) to better control our effect onthe environment and our use of resources. Enterprise implicationsWe will use them in buildings, transportation and factories. They will Many products in 2020 will have a high cyber-physical content. We arereduce the waste of spoilage in food and pharmaceuticals. already seeing this in cars — the start-stop and temperature-control systems in engines have increased energy efficiency. But construction, food production and pharmaceutical companies of the future must use these systems too. Cyber-physical systems will account for an increasing proportion of building, factory and vehicle costs as well as value. 37
  37. 37. I.3 Technology7 Security and privacy.In a world where everyone is connected, where there are 1 trillionsensors and huge increases in the amount of data being stored andanalyzed, today’s security systems won’t be able to protect our privacyor keep us safe from determined cyber attackers.By 2020, security systems will be more adaptive and dynamic in orderto automatically thwart attacks from an ever-increasingly sophisticatedthreat landscape. Security systems will harness intelligence toproactively anticipate and take action against cyber threats – they willfind risk before it finds you.Security systems will harnessintelligence to proactively anticipateand take action against cyber threats. 38
  38. 38. I.3 TechnologySecurity topics that’ll keep us up at night7The top security and risk management concerns of today’s Senior IT Executives for 2020 Extremely concerned Somewhat concerned Not very concerned 67% 66% 63% 54% 51% 46%Data privacy Lack of skilled resources Risk associated with Intermingling of Disruption caused Failure to seize onand information to effectlvely manage increased consumption of personal and business by natural or the latest technologybreaches security application and IT technology man-made disasters to protect services across public, systems and data private and hybrid cloud 39
  39. 39. I.3 TechnologyEnterprise implications Whatever your decision, one thing is certain: The proportion of effortSecurity and privacy have implications at the inter-government level. the enterprise has to spend on ensuring privacy and security is goingWith ubiquitous sensors, precisely how much personal information to increase by 2020.should be stored or gathered? If everything is RFID tagged, forexample, an individual can determine when and where you boughtyour clothes, your watch, your briefcase and your mobile device. Doyou really want someone to be able to do that? 40
  40. 40. I.3 Community Discussion Highlights Rafal Los writes, “Technology as of right now isnt the challenge. Were notSee change or lacking technologies, innovations, or inventions - its the application thereof that is lacking...”sea change? Nick Peterson believes technological change occurs more out of consumer desire than necessity, creating a vicious cycle of supply and demand. “IEnterprise 20/20 is a collaborative effort with our community members, think current technology will enable more and more demand for innovationand their comments help shape each chapter well after it’s published. based not on necessity of society, but based on the realization that societyOn the following pages we take the pulse of the community and wants more and thus it is the desire that is driving the change more than ahighlight some thoughts from the Discussion Hub. need,” he writes. htt Technology plays a vital role in the future of the enterprise, from the Charles Bess, meanwhile, believes neither necessity or technology itself will way products and services are developed to the way end users effect change; rather, it will be those closest to the technology – either the consume them. The Enterprise 20/20 community views technology creators or the users. “When you look at the forcing change in a world as the source of both opportunities and challenges as we move defined by inertia, it is the passion of the change agent that starts the ball ever closer to a truly connected society. rolling,” he writes. “If they can gather others around that change it becomes HHHHHHHHHHHHH a movement – the market pays attention to movements.” HHHHHHHHHHHHHBut what will spur the most innovative of technology changes? Will 
necessity breed technology changes, or vice versa? Community Which vertical will spawn greatest tech change?members viewed this question not as a chicken-or-egg problem, but 
rather an opportunity to discuss how technology and necessity will Perhaps the larger question posed to the Enterprise 20/20 community,both be the problem and the solution. Which vertical market will spawn the greatest technological changes?, helped members synthesize their views on where technology will come“Personally I see it as a lifecycle or a feedback system, which would from, and where it is going. While the larger verticals – education,make the answer "both, continuously," says Matt Groeninger, while healthcare, financial services and government – were areas of focus for 41
  41. 41. I.3 Community Discussion Highlightscommunity members, one dark horse – the entertainment industry – health issues loom larger. They (we) will want affordable, effective,
was tapped as a potential source of technological innovation. good care.” Charles Bess believes the answer lies with the industry that stands to lose the most. “Id look at what verticals will be under the greatest“ When you look at the forcing change amount of pressure – since pressure creates innovations (and diamonds). I doubt that it will be governments, since by their very in a world defined by inertia, it is the nature they are a monopoly,” he writes. passion of the change agent that The very nature of technology development – from idea to curation starts the ball rolling.” – Charles Bess and development – relies on need and a willing consumer base to ensure success. While we can’t predict what technology will be “the next big thing” we can dictate which technologies will be a success. 
“My vote is for the media/entertainment industry to be the leaders,” writes FigJames McGovern. “They have the best potential of helping visualize the Go to the next Community Discussion pagechallenges we face as a society, the ability to distribute the message tothose who need to know and to target those who can help and to finallysolve the awareness challenges of technologies already in existence butnot widely known.”“I believe healthcare will bring about huge technology change. Theindustry is under pressure to curb costs; at the same time, America isgraying,” predicts community member nksinfo. “The ‘boomer’ cohort isbeginning to retire from the workplace and to reach the age where
  42. 42. EnterpriseDriven by world trends, and supported by newtechnologies, enterprises in 2020 will differphysically and functionally from today’senterprises. 43
  43. 43. I.4 Enterprise1 We’ll work in virtual offices on virtual teams.The days of the grinding commute to the exurb campus or theprestigious downtown skyscraper are numbered. Concerns about fuelshortage and availability of land in megacities cause enterprises in 2020to radically rethink their real-estate strategies. Ubiquitous cloudcomputing has removed the need for every business to have its owndata center; bandwidth supports remote working; and the MillennialGeneration is fully attuned to being productive and cooperative withoutconstant physical interaction.As discussed in the technology section, the dynamic mosaics ofspecialists connected by collaboration tools become dominant in theenterprise. The ratio of full-time employees to contracted specialists willshift dramatically. Today we see IT departments of global corporationsstaffed by a mere dozen employees; what impact will we see on otherbusiness functions? Will we see the end of the monolithic corporationwith hundreds of thousands of full-time employees? 44
  44. 44. I.4 Enterprise2 We’ll rely more on systems of engagement than systems of record.In 2011, Geoffrey Moore published a paper detailing systems of The real-time impact of social mediaengagement and their role in the future of ITi. By 2020, withdemographic shifts, access to high bandwidth and embrace of on brand reputation and the instantsocial networking, systems of engagement will be mainstream,as enterprises seek to cultivate their relationships with customers feedback on concepts and launchesaround the globe. The real-time impact of social media on brand will require full-time monitoringreputation and the instant feedback on concepts and launches willrequire full-time monitoring and analysis. and analysis. Already cited by several sources, some enterprises will appoint Chief Listening Officers, who will tap into social media and other communication platforms to better understand changing customer needs and tastes. 45
  45. 45. I.4 Enterprise3 We’ll use data in real-time and only preserve what’s needed.In past decades, IT focused on accumulating more and more data in We will combine marketing, IT and legal expertise to identify what dataERP/MRP/CRM systems and on deploying tools to mine it. must be stored; to determine how long and where to store the data; and to find new strategies to reduce information lifecycleIncreasingly, sales and marketing teams will extract more value in the management costs.instant from transient data in social media, web, sensor and mobileinteractions, and enterprises overall will “offshore” their data tothe cloud. 46
  46. 46. I.4 Enterprise4 We’ll turn changing demographics into business opportunities.The major demographic shifts of 2020 throw new sets of customerneeds into focus. By employing managers with a culturalunderstanding of Brazil, Russia, India, China and so forth, and bycapturing trends in social media, enterprises in 2020 will easily tap intothe needs of these emerging middle classes. But the more digitallyisolated and retired sectors of society represent an increasinglyprofitable segment. Enterprises in 2020 need to tune in to the growingnumbers of seniors to create products and services for people whomay live in retirement for as long as they were in employment.The more digitally isolated andretired sectors of society representan increasingly profitable segment. 47
  47. 47. I.4 Enterprise The coming POPULATION “Gray Bubble” 8 “50-75 year olds make up a large share of the 10% increase in 140 Million global population by 2020, presenting market and workforce implications for enterprises.” 120 Million Population by age groups, 2012 Population by age groups, 2020 100 Million 80 Million 60 Million 40 Million 20 Million Age (years) 10 20 30 40 50 60 70 80 90 48
  48. 48. I.4 Enterprise5 We’ll finance, measure and value our businesses differently.The enterprise of 2020 is fundamentally different in terms of tangibleassets and direct control of labor. As the mosaic approach becomesthe norm, the CFO must be able to report on the company’s ability todeliver ongoing value with fewer “in-house” resources. Future stockmarket valuations will likely be influenced by perceptions of anenterprise’s ability to influence social media networks and capitalizeon insight from them. Will we see some form of Klout scorefor enterprises?Finally, it will become increasingly important, and likely legislated, tomeasure and report transparently on total environmental impact ofbusiness operations. 49
  49. 49. I.4 EnterpriseWhat you need to succeed9Most valuable skills and capabilities that IT Teams will need in 2020 Valuable Neutral Not valuable Skills in helpingBusiness the business deal Business Process Business ServicesPlanning and with technology Design and IT Service Project Portfolio Requirements Agile Risk Monitoring &Strategy complexity Communications Composition Management Management Management Development Management Assurance 50
  50. 50. I.4 Enterprise6 We’ll manage talent in new ways.In previous decades, leaders and HR managers focused on employeerecruitment, development and long-term retention. In 2020, enterpriseswill shift focus to engaging fluid groups of labor — “supertemps” whowill take on strategic projects for a relatively short period. The HRleaders of 2020 must address the following questions: Who are the“rock-star” supertemps? How do we ensure they keep dataconfidential? How do we get them to come back for future projects?How do we feel about sharing our talent with rivals? HR will evolve intomore of a community management role, doubtless supported by smartsocialIn 2020, enterprises will shiftfocus to engaging fluid groupsof labor - “Supertemps.” 51
  51. 51. I.4 Enterprise7 We’ll approach the IT function differently.Changes in the world, technology and enterprise of 2020 promise an specialists, agilely designing and launching business processes thatinteresting future for CIOs and IT leaders. Increasingly, as IT becomes take advantage of new markets, or new opportunities to serveembedded more deeply into the business, IT leaders will bring innovation constituents in the public sector. Like the rest of the economy of 2020,to their enterprises by mastering a digital supply chain of services and value will come less from vertical operations and more from intelligent deployments of mosaics of services and individuals, using the latest cloud, mobile and social collaboration technologies on top of modern computing infrastructures. HHHHHHHHHHHHH HHHHHHHHHHHHH htt 52
  52. 52. I.4 Community Discussion HighlightsWhen play “With all the analytic capabilities available today, a basic behavioral understanding can be applied to corporate objectives and goals to adjust the behavior of the organization to align to a desired future. ... It is notbecomes work about making things "fun" but instead of changing behavior in a goal- oriented fashion,” writes Charles Bess.Enterprise 20/20 is a collaborative effort with our communitymembers, and their comments help shape each chapter well after it’s “ Games are a relatively inexpensivepublished. On the following pages we take the pulse of thecommunity and highlight some thoughts from the Discussion Hub. way to train people or run experiments As the enterprise evolves to accommodate a global and and simulations.” – Charles Bess multigenerational workforce as well as shifting cultural mindsets, the way we approach our work – and, indeed, how we interact 
 with others – topped the list of conversations in the Enterprise Horia Slusanschi agrees: “Games can be used to engage with customers 20/20 community. or partners in new ways and draw them to your brand. Games can also be used in-house to develop better awareness of various ideas, habits orHow we work: Will gamification change behavior? opportunities. Games are a relatively inexpensive way to train people orNext-generation technologies and ways of working, such as run experiments and simulations.”gamification in the future enterprise, have captured the minds ofcommunity members, who look at such technology from different Or will gamification be child’s play?points of view. Some see gamification as child’s play – a ploy to Dennis Kruegel, however, sees gamification differently. “I think of an old-pacify a generation brought up on constant praise – while others see fashioned company with strict hierarchies and a command environmentthe technology as a simple, effective way to change behavior. rather than a collaboration environment ... I cant imagine such a 53
  53. 53. I.4 Community Discussion HighlightsI cant imagine such a company applying gamification conceptsinternally, because for such a company the terms "play" and "work"dont fit together. Either you play (that includes Social Media) or youwork. Performing well in a job in such a company is not seen as agame, but as a duty.”One thing is for certain: Change is a constant, and what may beseen a trivial or frivolous today may become an integral part ofworking tomorrow. Fig Go to the next Community Discussion page 54
  54. 54. DiscussionAs we look to 2020, we are excited about thepromise technology holds to help us addressthe opportunities and challenges in our rapidlychanging world. As professionals, we have aresponsibility to look forward, to play outscenarios and challenge one another tosharpen our vision. 55
  55. 55. Coming from different countries, different industries, from inside and outside IT, we each bring a unique perspective to the question we’re proposing:“What will matter in 2020?” 56
  56. 56. I.5 DiscussionWhat will matter in 2020? During the next six months, the Enterprise 20/20 community will beIn this introduction, we’ve highlighted some trends and shared some diving deeply into domains that matter most to our professions. We’llopinions. But what we really want to know is how are you envisioning be looking horizontally across the boardroom, the apps team, thethe future? What shifts and trends matter in your industry? To your marketing department, the IT operations center and the CIO of 2020.enterprise? To your profession? And we’ll be looking vertically at specific industries — financial services, telecommunications, public sector, manufacturing and others. htt 57
  57. 57. I.5 Community Discussion HighlightsThe Enterprise “Transparency, reduced latency and a strategic vision. ... there is too much that is attributed to analyst demands and organizational politics and not enough focused on the common good,” writes Charles Bess. “If goals and initiatives are clearly stated and supported by employees and2020 wish list stakeholders, the futility of the quarterly pressures response can be seen for what it really is.”Enterprise 20/20 is a collaborative effort with our community members,and their comments help shape each chapter well after it’s published.On the following pages we take the pulse of the community and “ We need to cater for a global,highlight some thoughts from the Discussion Hub. distributed, diverse workforce, many Of all the discussions generated by the Enterprise 20/20 project, perhaps one of the liveliest focuses on the enterprise 2020 “wish of whom are working from small hubs list.” Answers were varied but a common theme emerged: To foster future success, enterprises must begin to operate with a mindset or home office.” – Mark Wilkinson that benefits its customers and its employees.Thomas Abel had one seemingly simple yet critical wish: Marc Wilkinson engaged a more global mindset: “We need to cater for a“Collaboration and cooperation of all stakeholders on any level(s) global, distributed, diverse workforce, many of whom are working fromcross the organization(s) to make the full potential of all involved small hubs or home office - this changes culture in many ways we arepeople available for the enterprise in 2020.” still learning, but interaction (and engagement), communication, collaboration are all at the heart of the problem,” he writes.Interestingly, technologies of any kind didn’t show up on communitymembers’ radars; rather, a change in corporate “attitude” and ways of As we look at the comments from the Enterprise 20/20 community, it’sdoing business topped the list. clear technology plays only part of the role in building a successful 58
  58. 58. I.5 Community Discussion Highlightsenterprise. It takes strong leadership, willingness to adapt to changingneeds and a keen awareness of the global marketplace. Having sucha foundation can only foster innovative, game-changing technology.
  59. 59. I.6 SourcesGraphics1. http://www.citymayors.com/statistics/urban_2020_1.html 7. IDG Research Services, IT Executives Vision, conducted for HP, for 20/20, May 20122. The Emerging Middle Class in Developing Countries, Homi Kharas, Brookings Institution, June, 2011 8. US Census Bureau3. Guardian UK 9. IDG Research Services, IT Executives Vision, conducted for HP, http://www.guardian.co.uk/uk/2011/mar/02/cctv-cameras-watching-surveillance for 20/20, May 20124. IDG Research Services, IT Executives Vision, conducted for HP, for 20/20, May 2012 Text5a National Institute of Science and Technology Policy, 2030 Report http://www.nistep.go.jp/ a. Source: US Census Bureau5b Guardian UK, Launching a New Kind of Warfare b. Source: US Census Bureau http://www.guardian.co.uk/technology/2006/oct/26/ guardianweeklytechnologysection.robots c. Source: Frost and Sullivan, “50th Anniversay: 50 Predictions for 50”, 20115c BBC News d. Source: UNFPA (United Nations Population Fund), Demographic, Social 
 http://news.bbc.co.uk/2/hi/technology/6425927.stm # and Economic Indicators, 20075d BBC News e. Source: City Mayors, The world’s largest cities and urban areas in 
 http://news.bbc.co.uk/2/hi/technology/6425927.stm # 2020, 20125e National Institute of Science and Technology Policy, 2030 Report f. Source: IDC iView, The Digital Universe Decade – Are You Ready? http://www.nistep.go.jp/ May 20105f Techcasts, Technology Forecast Results g. Source: UMTS Forum, “ Mobile traffic forecasts 2010-2020 (commissioned 
 http://www.techcast.org/Forecasts.aspx# research conducted by IDATE), January 20115g ScienceDaily, Scientists Developing Robotic Hand of the Future h. Source: Display Search, “3D Display Technology and Market Forecast 
 http://www.sciencedaily.com/releases/2011/06/110629083237.htm Report”, 20105h Marshall Brain, Robotic Nation i. Source: Forbes Magazine, Systems of Engagement and the Future of IT, 
 http://www.marshallbrain.com/robotic-nation.htm Geoffrey Moore, 20125i Guardian UK, Launching a New Kind of Warfare http://www.guardian.co.uk/technology/2006/oct/26/ “The views set forth in this publication are not necessarily those of Hewlett-Packard guardianweeklytechnologysection.robots# Company or its affiliates (HP), but are the collective views of contributors to this publication, some of which have been curated by HP. Because the content of this publication is future-6. UMTS Forum, Mobile Traffic Forecasts 2010-20/20, January 2011 looking, it, by definition, makes certain presuppositions and assumptions, some or all of which may or may not be realized.” 60
  60. 60. Outlook 62
  61. 61. II.1 OutlookIt’s an increasingly familiar pattern. A line of business leader approachesHP about a pressing need for assistance to drive a business—in onerecent case, to help a company rapidly create “social games.” Thecustomer is prepared to spend significant amounts of money to solvethis problem. He also explains that he expects to use a number of“digital suppliers” to deliver these games, “one of which may or may notbe our central IT.” Ouch. 63
  62. 62. II.1 Outlook To ensure that the business doesn’t sideline the CIO, the entire IT department needs to take an active part in the innovation agenda and provide the enterprise with new points of differentiation. 64
  63. 63. II.1 OutlookBy 2020, the role of the CIO will be transformed from thetechnology expert of yesteryear to that of a business engineerwho is pivotal to the strategic growth of the enterprise. Continuingthe path of automating business processes and adding a webfront-end to existing products and services will not be enough. 65
  64. 64. II.1 Outlook “This is the most exciting time in IT since the early 1980s when 
 PCs came about and changed everything. It’s an enormous 
 sea change,” says Dr. Robert N. Charette, president, ITABHI Corporation. This change involves moving from infrastructure builder to power broker. Tomorrow’s IT leaders will run smaller in-house teams while managing a mosaic of service providers. Driven by information and centered on innovation, their enterprises will demand instant flexibility and require protection from a variety of omnipresent security threats. How do you get there from here? Begin with an understanding of the forces at play. 66
  65. 65. II.1 Community Discussion HighlightsRedefining Bastiaan van der Water believes effective CIOs should focus less on the business aspect of the position and more on the IT aspect. “I see too many CIOs without proper IT education that choose for short termthe CIO development and bleeding for long term. The CIO is the IT person, not the business person,” he writes. IT is not something you can do if you cant find work in your original line of education.”Enterprise 20/20 is a collaborative effort with our community members, Changing skillsets, changing structuresand their comments help shape each chapter well after it’s published. Onthis page we take the pulse of the community and highlight some Other community members see the role of the CIO evolving asthoughts from the Discussion Hub. technological shifts force changes within the enterprise. “The CIO becomes mainly the builder and broker of IT based on collaboration, The role of the CIO in 2020 is being heavily debated in the community, increased agility and faster revenue growth,” writes Thomas Abel. 
 with many believing CIOs will become “stewards of innovation” within “The CIO must bridge legacy and as-a-service worlds.” their companies and manage IT from the standpoint of driving both efficiency and growth. Some members even believe the role of the CIO will become even more important as business processes map “ The CIO must bridge legacy and 
 ever closer to IT, from marketing to employee recruitment 
 and retention. as-a-service worlds.” 
 – Thomas Abel“CIOs must not only work at the strategy level, but also understandand relate to the details,” notes Charles Bess. “They must understandand preserve that which is optimally efficient, yet also muster the courageto find what could work better. ... No other position in the modern “The better question is, ‘What functional responsibilities does theenterprise requires the executive to excel in so many capacities.” organization need to address as they relate to technology?’ “ 67
  66. 66. II.1 Community Discussion Highlightsqueries Joshua Brown. “How many people, with what skill sets, wouldbe necessary to cover all these responsibilities?"As enterprises evolve and job functions shift, some communitymembers even question the need for a separate CIO. “... [T]here hasbeen a great deal of discussion about the Chief Marketing Officertaking on many of the CIO’s functions in some organizations — or atleast align the work otherwise both will become irrelevant,” notesCharles Bess.Others, however, see the CIO’s role becoming even more critical.“From the ebook we can see that the CIO in 2020 will be responsiblefor a multitude of functions and capabilities,” writes Gary White. “Couldthis change the ‘I’ in CIO from ‘Information’ to ‘Intelligence’?” 
 Fig Go to the next Community Discussion page 68
  67. 67. Challenges and Opportunities
for the CIO of 2020A number of concurrent trends are shaping the IT department of the future,presenting both challenges and opportunities for CIOs. To stay relevant, CIOsmust take action, and:• Innovate with the business.• Jettison all that’s not core.• Support mosaics of small companies and free agents.• Create solutions that optimize mega-systems.• Focus on the “I” in “IT.”• Balance privacy and security with personalization and access.• Manage IT performance versus risk. 69
  68. 68. II.2 Challenges and Opportunities for the CIO of 20201 Mark Potts, CTO, HP Software, agrees: “It’s important to look at what Innovate with the IT means, going forward, in terms of a responsibility rather than as the business an as an organization a construct, as companies look for greater agility, but the responsibilities for managing brokered hybrid delivery and the associated quality, risk and cost management won’t beAs 2020 approaches, CIOs must move from providing a business abdicated, and the CIO is likely to have to manage this acrosssupport function to becoming part of business teams and helping them enterprise.”create innovative products and services. CIOs who do not stage thistransformation will become marginalized by cloud providers and Businesses are increasingly looking to IT to create differentiation andbusiness IT groups that will introduce high-level business processes, innovation for their products and services. Today, IT is only used toapplications and data analysis development tools. drive competitive advantage in 50 percent of enterprises.1 (See Figure 1.) Patrick Dixon, the British futurist, believes that the board of theToday, IT is only used to drive competitive future will have a CTO on it to ensure that technology is applied wherever possible to create competitive advantage.2advantage in 50 percent of enterprises This trend is not about IT partnering with the business. It’s about IT“As computing becomes increasingly ubiquitous, the IT department will professionals becoming members of business teams and beingnaturally spread across the corporation,” says Charette. measured and rewarded in the same way as the business teams with whom they work. 70
  69. 69. II.2 Challenges and Opportunities for the CIO of 2020“I don’t know how you talk about an “IT department” any more—we’re In order for IT to become a valuable member of business teams, thenow all part of IT in a way,” says Charette. CIO of 2020 needs the tools and the people to provide a number of critical servicesIT must be committed to the same goals as the business itself. Arecent Economist survey found that in 16 percent of enterprises, the • Business processes: IT consultants need to be able to quicklyCIO doesn’t set IT strategy – he or she is only consulted once the design and modify business processes, many of which will call onstrategy is set. This must change. external cloud services to perform process tasks.A recent Economist survey found that in • Multi-device applications: Applications that are able to understand both voice and gestures and synchronize across the landscape of16 percent of enterprises, the CIO devices will be common. The CIO of 2020 needs to put in place skilled people and systems to create such applications.doesn’t set IT strategy – he or she is • Real-time analytics solutions: IT will need to be able to create 
only consulted once the strategy is set. real-time analytics solutions quickly for the business. This must include not only familiar structured data but also unstructured data such as information generated by social media interactions, and the sensor data that will be pouring into the enterprise. 71
  70. 70. II.2 Challenges and Opportunities for the CIO of 2020• SaaS: Enterprises are already asking, “Can we change the applications we currently provide for our customers into SaaS services?” This will be a strong trend through 2020, resulting in many enterprises offering applications as a service for their customers. We may see the part of IT that manages such SaaS services get spun off as a revenue-generating entity within the enterprise.• Cloud services for smart products: Products like cars, refrigerators, health monitors, shopping carts and buildings will become increasingly intelligent. They will “call home” to cloud services provided by enterprises. The IT department of 2020 will need tools and skills to provide valuable back-end services for these smart products.In order to provide these services to business teams, IT needs to focusmore than it ever has before. 72
  71. 71. II.2 Challenges and Opportunities 
 for the CIO of 20202 Jettison all that’s not coreGeoffrey Moore (author of Crossing the Chasm and Inside the Tornado)has a model for the use of cloud. “Low-cost economies are entering theinternational sphere on the basis of cost. If you are in a high-costeconomy, you must therefore differentiate to sustain margins,” 
he says.4 Many global enterprises are taking advantage of this trend byshifting hiring and operations to low-cost economies. But they mustalso have a maniacal focus on differentiation, as cost advantagesdisappear rapidly with globalization.Increasingly, it is the thinking that IT brings to the table that enablesorganizations to create differentiated, innovative products and services.In order to do this, however, IT needs to become hyper-focused oninnovation and offload everything that might distract from this goal.IT needs to become hyper-focused oninnovation and offload everything thatdistracts from this goal. 73
  72. 72. II.2 Challenges and Opportunities 
 for the CIO of 2020 Focus on “core” is not a new concept. Many consumer electronics companies have exited the manufacturing business altogether and now just focus on what differentiates them—design and marketing (and the ecosystems around their products). Car manufacturers focus on those elements of design and production where they feel they can differentiate, leaving commodity items to others. “Divest yourself of non-core processes,” Moore says. Such processes and applications might include payroll, expenses, travel, email and other communication tools. Provided we can get these functions from a cloud provider at a level of performance, availability, security and cost that is acceptable, we should jettison them from our IT departments. By 2020, SaaS and Business Process as a Service (BPasS) providers will be the norm, and most development and testing environments will be delivered by cloud providers, as will many production environments.“Divest yourself of non-core processes.”
 - Geoffrey Moore, author, Crossing the Chasm and Inside the Tornado