It’s easy to make a compelling case that ‘digital’ will ultimately replace what was once ‘IT’ at some point in the future as the former rapidly evolves and the latter become more and more associated with legacy technology and practices. hedging bets on what will happen and when however is a different matter entirely and hugely variable from business to business.
A historical analogy I’ve used frequently is the period when steam power slowly gave way to electrification. Steam enabled the industrial revolution and generations of power creation and transfer expertise. Simplifying, early manufacturing typically had one giant steam engine driving multiple leather belts to various ‘creating’ contraptions.
Along came electrification and boilermakers and belt tensioning experts started to work alongside electric motors and light, but the period when these two power sources co existed was surprisingly long as companies sunsetted their amortization of steam power and invested in electrical.
It wasn’t until the 1930’s that ‘as a service’ from the plug socket and light switch regulated electrical grids were established in north America. Prior to that electrification was very parochial and needs driven for the creation of electric light and to power specific factories.
Just as early use of digital media for marketing is analogous to the creation of neon signs and electric light arrays in cities as soon as their generation was possible, today the focus on ‘digital’ has been skewed towards marketing though social networks and ‘customer conversations’. Electric light displays in places like Times Square NYC were the wonder of the world only 100 years ago, initially hand switched on and off in sequence by staff.
All fascinating history, what has this got to do with our digital ‘as a service’ world? The period when steam power slowly moved to the less visible role of creation of distributed electrical power is analogous to the way enterprise computing has evolved. Cloud and mobile networks have transformed our world on an individual basis but as we all know there’s an awful lot of mainframes and cobol out there.
As HfS’s Phil Fersht recently wrote
When you consider only $15 Billion is being spent on public cloud services (IaaS) this year and $ 1 trillion being spent on services tied to traditional services delivery, there is a huge amount of “legacy” IT and BPO business in play – for another decade and beyond – to enable the enterprise digital experience.
It’s amazing to think that less than 100 years ago people would go by horse drawn carriage to see people turning arrays of lights on and off in Times Square on a Saturday night as ‘advertainment’. The pace of change has sped up enormously just within this century alone: as an example AWS delivered the first storage service (Amazon S3) in the spring of 2006 and compute (Amazon EC2) in the fall of that year.
For the services world the twin speed world we live in of legacy IT and digital evolution has some similarities to the past era of boiler makers and electricians – today most of the work is in keeping the steam boilers ever more efficient in the enterprise world, but everyone knows the increasingly automated grid is evolving fast. Making the decisions of what to focus on with staff and technology – what skill sets are needed and how and where to apply them – is doubly difficult when for decades most of your waking hours have been focused on ‘busy work’ to keep IT systems running. Quote to cash isn’t going to go away but it is certain to evolve and be ever more connected to other parts of the digital continuum most companies now have in focus strategically and aspire to.
Where steam power was rigid, brittle and inflexible despite enormous power generation, eventually ‘ always on’ electrical power provided plug and play secondary, tertiary and on usages (light, power, heat, production lines etc). This is the analogy the services sector are increasingly aware of and where ‘core digital’ is arguably emerging to supersede ‘IT’.
These are absolutely fascinating times, not least because this new world allows an astounding pace of innovation and appetite for the new. Steam power didn’t go away of course – as late as the 1960’s steam locomotives were the way people travelled by rail, and the electricity I am consuming to type this post may well have some steam generated electrons commingled. As the transition and automation of older services yield to newer digital needs here at HfS we will be commenting and informing on where the power and growth centers of the ‘as a service’ world opportunities are.
Posted in : Digital Transformation