Gartner Says Enterprises Must Embrace Digital Transformation in 2018

NEWS ANALYSIS: Gartner executives speaking at its annual Data Center Infrastructure and Operations Conference say enterprises should start implementing digital transformation projects in 2018 or risk falling behind their competition.

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LAS VEGAS—Every year about this time Gartner Inc. convenes its data center analysts and clients at its Data Center Infrastructure and Operations Conference.

Here at Gartner's longest-running conference, now in its 36th year, the discussion always has a sense of urgency, since the data center is the heart of enterprises' business operations and central to IT strategy and costs structure.

But this year the urgency seemed a bit more intense, because of the rapid growth in certain technologies, particularly artificial intelligence and connected devices that are starting to have a real impact among disruptive users, while most enterprises lag behind.

As 2018 approaches, the future milestone year of 2020, on which many predictions have been based, does not seem so far away any longer. Companies do not have the time to think about how to embrace digital transformation. They must embrace it—now.

Gartner executives Dave Russell and Milind Govekar hammered home that point in Monday's opening keynote. "Digital is real and it is disrupting, attacking the weaknesses of incumbents," said Govekar, Chief of Research with Gartner's Infrastructure & Operations group.

"It's time to rethink infrastructure and operations or you will end up as custodians of legacy technology," said Russell, Gartner Vice President and Distinguished Analyst. "Enterprises need to ruthlessly seek to retire infrastructure that has no more useful life and to stop deploying systems that create high technical debt."

The oft-repeated takeaway from conferences like these--don't deploy technology for its own sake, but rather for solving business problems--has a new resonance now.

Technologies like AI are moving so quickly that if users don't start looking into it now, it may soon be too late, Gartner says. One strategic planning assumption that Russell and Govekar discussed states that by 2020, "30 percent of data centers that fail to apply AI or [machine learning] effectively in support of enterprise business will cease to be operationally and economically viable."

The pressure is on businesses to change their perspective on technology and how to measure successful use of it. "You should not be known by infrastructure you keep, but by outcomes you provide," Govekar said.

In other words, businesses should develop cloud or AI strategies, but only in terms of how they enable "business outcomes" such as bringing in new customers, growing revenue, and gaining market share.

In his talk, "2018 Top 10 Trends and Their Impact on I&O," Gartner Distinguished Analyst

David Cappuccio said data centers should be treated as a service, whether they are cloud-based or not.

"Think of services delivered, not infrastructure driven," he said. Rather than struggling to put old technology in the cloud, "put new services first, focused on business outcomes."

The tasks required of the modern day data center infrastructure and operations leader are always easier said than done. It's hard to "keep the lights on" while innovating in new areas, Cappuccio said.

Furthermore, the skills available to enterprises are not lining up with what they need to drive innovation. In another leading indicator, "75 percent of enterprises will experience business disruptions due to skills gaps."

While that may be difficult to overcome, the really hard task will be for businesses to adjust to the next generation of consumers.

"This is not a technology revolution, but a human revolution; not an extension of the past, but a reinvention of it," said guest speaker and futurist, Chris Riddell. "The next three years will shape the next 100 years as never before."

Scot Petersen is a technology analyst at Ziff Brothers Investments, a private investment firm. He has an extensive background in the technology field. Prior to joining Ziff Brothers, Scot was the editorial director, Business Applications & Architecture, at TechTarget. Before that, he was the director, Editorial Operations, at Ziff Davis Enterprise. While at Ziff Davis Media, he was a writer and editor at eWEEK. No investment advice is offered in his blog. All duties are disclaimed. Scot works for a private investment firm, which may at any time invest in companies whose products are discussed in this blog, and no disclosure of securities transactions will be made.

Scot Petersen

Scot Petersen

Scot Petersen is a technology analyst at Ziff Brothers Investments, a private investment firm. Prior to joining Ziff Brothers, Scot was the editorial director, Business Applications & Architecture,...