5 Enterprise Tech Trends to Watch in 2016

mainframe computerAlso posted to Sonian Blog.

Sonian’s archive, search and analytics platform exists at the intersection of cloud, big data and machine learning. Over the past 8 years we have pioneered many initiatives in order to harness the cloud to solve a hard problem: fast and reliable full-text search and analytics for tens of billions of emails and attachments.

Our greater mission is to help enterprise IT migrate their on-premises systems to the cloud, and we know that archiving and information governance workloads are the first to “move on up to the top.”

We have a knack for identifying enterprise tech trends that are at the beginning of the adoption curve and want to share five trends were monitoring in 2016.

1. IT Becomes the Department of “Yes”

IT’s influence has waned in many organizations because IT, by their own volition, became the “department of no.” Which is ironic since IT previously was the group that brought innovation to their respective businesses. Innovation that gave a competitive advantage. But even IT couldn’t keep up with the pace of innovation in the cloud era and fell victim to legacy thinking and line of business managers found IT obstructing progress. That’s why Salesforce.com, Workday, Hubspot, Intacct, etc. took off. In fact there are over 1,400 enterprise SaaS apps that can be procured without IT involvement. Business managers “pushed ” IT aside and implemented their own solutions. But IT is poised to come roaring back to being relevant.

This situation is about to change. IT will reinvent itself in 2016 and become the department of yes.

In fact, the CIO role will be redefined dramatically. CIO historically means Chief Information Officer, but in 2016 that will shift to Chief Innovation Officer. And a new role is emerging called Chief Data Officer. CIO and CDO responsibilities will merge together as part of ITs’ resurgence.

IT departments will be smaller and more efficient. They will focus on the more value-add services and let the “cloud” manage the undifferentiated heavy lifting. No longer is managing a on-premises Microsoft Exchange server a value add. The cloud can deliver commodity-priced email cheaper than self-managed. This means fewer people are needed and their skills need to be upgraded to focus more on the business needs and less on the mundane technical tasks.

It’s the end of “average IT.”

IT in 2016 will provide overall technical oversight in the form of information security, compliance and governance for SaaS applications. IT will be the guardrails that prohibit a business manager from making a poor technology choice. IT will ensure SaaS vendors are using state of the art and trusted security controls. IT will enforce new standards such as multifactor authentication and vette vendors for best practices.

And IT will provide value added services by analyzing the reams of business data contained in the dozens of SaaS apps used by a modern enterprise.

2. Cloud Continues to Get Cheaper

The cloud will continue to be easier to use and less expensive. We won’t see the dramatic price cuts of the past few years, but with healthy competition, and exponential innovation, the major cloud vendors will keep each other in price check and continue to drive their pricing lower because they are figuring out new ways to manage their infrastructure at less cost.

Amazon’s new Elasticsearch “as a service” is a great example of “cloud getting less expensive.” Previous to this new capability, if you wanted to run Elasticsearch on AWS, you had to self-manage compute (EC2) storage (EBS) and configure various networking settings (VPC & IAM) for reliable operation. Not a trivial matter. Now with the new Elasticsearch service the same capability is available in a turnkey pay as you go offering that requires no Elasticsearch configuration expertise. And its overall less expensive when you factor in headcount costs.

In 2016 we will see three major cloud providers and a handful of niche players. Amazon Web Services, MIcrosoft Azure and Google Compute Platform will be the dominate public cloud providers, each offering an array of similar capabilities and similar price points. Each will succeed based on different factors.

AWS will remain the largest and most advanced. Their five year head start gives them a innovation cadence that is like compound interest on an investment account. It’s really hard for anyone else to catch-up, and AWS’ new services are attractive and virtually guarantee a certain degree of lock-in. Every major new startup (except Snapchat) is running on AWS. Amazon is also figuring out the enterprise after winning the hearts and minds of startup founders.

Microsoft is a major provider because of their dominance in the enterprise, and the comfort IT decision makers have with .NET, SQL Server and Office platforms. Azure will continue to offer more IaaS and PaaS services and price match or be lower than AWS or GCP.

Google needs to figure out the enterprise and will leverage the growing Google for Work platform to make inroads. Some startups that are machine learning or AI focused will choose GCP over AWS as the primary platform.

The cloud market is looking like the other major markets in our economy. Whether automobile, media, airlines or banking, there always seems to be the “Big 3” major providers and up to a dozen smaller players satisfying niche needs. In 2016 we’ll see more evidence of this.

3. Cloud Continues to get Simpler

Another trend to observe in 2016 is the cloud will get easier to use. The major cloud providers are investing heavily in making the cloud more accessible and friendly to enterprise IT. All the raw horsepower at our disposal will be packaged into quick start templates that ensure an easy, secure and reliable deployment. Every on-premises service will have a cloud alternative, no matter how niche.

Cloud ISVs (Sonian is an example) will have access to more capabilities that allow relatively small teams to solve bigger problems. One example of this is “serverless” architectures. New services like AWS Lambda or Microsoft Orleans completely abstract away the notion of managing anything resembling a traditional virtual machine “server” from running your code.

Lambda is farther ahead in this area and is already spawning new projects that do not require teams to manage any dedicated infrastructure (virtual or physical). Write your code, upload to the cloud, and execute on event triggers. No EC2, EBS, etc. to worry about.

Services like Lambda are leaps beyond the trend toward using Docker to containerize applications. But while docker promotes portability across clouds (a positive) it adds more administration overhead and complexity. Services like Lambda are easier, but lock-in is the “price to be paid” for this simplicity. But don’t fret about lockin too much… this another startup opportunity waiting to be solved, and someone will do it.

4. Businesses will be Challenged Managing the Data Deluge

A carryover trend from 2015 into 2016 is the need to implement better methods to manage all the data a modern enterprise generates. Now more than ever the need for central reporting is critical across two important axis: Compliance / auditing / governance and analytics / intelligence / insights. The over 1,400 enterprise SaaS options available have robust APIs to allow access to this important data, but enterprises don’t have the best tools to help them now. This is an area ripe for innovation.

Enterprises will need to find reliable, cost effective systems to store, index and analyze billions of data assets, and at the same time segment machine generated information from human generated content. The goal is for a manager to use this data to create knowledge about the business and make better decisions. To be able to answer these types of questions is now possible with the right systems in place; Which customers are more profitable?, which products have the least support burden?, which employees meet their goals consistently?.

The cloud, machine learning and open source will all play pivotal roles in better enterprise reporting.

5. Millennials Enter the Workforce

Enterprises need to prepare for a new type of employee, in some ways more technically savvy than than they are used to, and in other ways less open to change. In the Spring of 2016, after college commencements, millennials will be entering the workforce. This is the first generation that grew up with the Internet, smartphones and ubiquitous instant access to information.

Millennials don’t use the phone or email on a regular basis. But they are used to communicating asynchronously with short messages and on public forums like Facebook, Twitter and WhatsApp. To them “email” is stale and old fashioned. And doesn’t provide the immediate gratification of a Snapchat experience.

Businesses and millennials will be challenged to find the right balance, and the IT department will be ground central for this trend. IT needs to prepare to train millennials on the installed technology, which will feel backwards to how millennials are accustomed to functioning. And IT should also be prepared to embrace new ideas about enterprise social networking, ESN.

ESN hasn’t taken off like many predicted a few years ago. That is about to change as Facebook prepares to launch FB@Work. The same comfortable user experience billions of people are used to will now be packaged for business to create their own private experience for sharing and collaboration.

It’s no coincidence FB@Work is launching in Spring 2016, just as the largest base of Facebook users enters the workforce.