What's Important in IT in 2016? It's the Applications, Stupid

NEWS ANALYSIS: What should organizations invest in next year? Applications, of course. In particular, customer-focused applications.

2016 outlook

Trying to predict what will happen in the next 12 months in the IT industry is like trying to predict if rookie NFL running back David Johnson will score 46 fantasy points and save your season. After all, this is a game of skill, not chance, right?

So let's first turn to the experts. Gartner surveys show that IT spending will increase next year—up 2.3 percent in North America, according to a survey of almost 3,000 CIOs presented at the recent Gartner data center conference.

"It's time to double down on transformational initiatives," said Gartner Research Vice President Mike Chuba. Figuring out what exactly those transformational initiatives are, however, is where you have to apply some skill, and maybe some good old-fashioned business intuition. Invest in the data center? Application development? The cloud? In short, it depends on where your business opportunities are, where they will be and how agile your business is to make transformational changes. But transform into what?

The Gartner survey data shows a trend where the typical spending areas—BI/analytics, data center infrastructure, cloud, ERP and mobile—are still important, but their share of the priority pie is smaller than it was two years ago. Taking up a much bigger slice is digitization and digital marketing. Five-year investment intentions data also shows that customer experience management and digital marketing are way ahead of analytics, cloud and big data, while other "hot" topics like Internet of things and social collaboration are back in the pack.

What this points to is companies starting to believe that knowing and reaching customers is a primary function of the business—what Forrester analysts call being "customer obsessed"—and that technology is the means to feed that obsession.

But customer-obsessed companies don't want to get too carried away with all technology. Installing a new flash storage array or deploying software-defined networking won't necessarily make your business more responsive to customers. They could, though, if you have customer-focused applications that need the performance of flash or the programmability of SDN.

In other words, it's the applications, stupid. When you decide what kind of applications you need—mobile- or cloud-based, ERP or CRM, etc.—then you can build or borrow the best infrastructure for those apps.

There's been a lot of news on the infrastructure side of things this past year, from the cloud all the way down to advanced 3D XPoint memory chips. But infrastructure—an agile infrastructure that can respond quickly to business needs—is table stakes in the big picture of IT going forward. The business applications that reach customers or feed information about those customers to the business are where the true value of IT will be found.

What's also apparent is that innovation on the infrastructure layer the past year or so has paved the way for this line of thinking. Containers, hyperconvergence and everything becoming software-defined are the stepping stones toward (one day perhaps) fully abstracting away the underlying hardware in order for developers to be able to create more responsive, nimble and portable applications.

Look for news and trends in this area in the next year. If enterprises have problems to solve and opportunities to take advantage of, just be sure that the technology decisions your organization is making are for the business and its customers, and nothing else—and don't leave anything to chance.

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,...