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Understand the What, Why & How of Digital Transformation Featuring 451 Research Nick Patience, Founder & Research Vice President, 451 Research Michael Cote, Director of Technical Marketing, Pivotal

Digital transformation

Nick Patience

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Founded in 2000, The 451 Group is a Global IT Research & Advisory 451 Research - Uptime Institute

350+ employees, including 120+ analysts, doing business in 70+ countries

2,000+ clients: Technology & Service providers, IT decision makers, corporate advisory, finance and professional services

50,000+ IT professionals, business users and consumers in our research community including 30,000+ Global Digital Infrastructure Alliance

Over 52 million data points published each quarter and 4,500+ reports published each year covering 3,000+ technology & service providers

Owner of the Uptime Institute Tier Standard for Datacenter Certification

Headquartered in New York, offices in London, Boston, San Francisco, Washington DC, Mexico, Costa Rica, Brazil, Spain, UAE, Russia, Taiwan, Singapore and Malaysia

Research & Data

Advisory

Events

Standards & Certifications

Agenda •  Business imperatives for digital transformation •  Information transformation •  Process transformation •  Platform transformation •  Examples

451 Definition The result of IT innovation that is aligned with and driven by a well-planned business strategy with the goal of transforming how organizations: •  serve customers, employees and partners •  support continuous improvement in business

operations •  disrupt existing businesses and markets •  invent new businesses and business models

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17%

20%

33%

29%

1% We currently have no digital transformation strategy

We are considering it, but have no formal plans

We are in the planning stage - researching to form our digital transformation strategy

We have a formal strategy and are actively digitizing our business processes and technologies

Don't Know

Which of the following best describes your organization’s status with regards to a Digital Transformation effort?

Nearly 1/3 have a formal digital transformation strategy

Source: 451’s 2H 2016 Voice of the Connected User Landscape: Corporate Mobility and Digital Transformation survey, conducted during August 2016. n= >500 IT and line-of-business decision-makers

27%

39% Mobile

Top Drivers

Location-Based Technologies

34%

44% Innovation

Financial Services 44%

60%

29%

41%

39%

No Strategy

Formal Strategy

We have a formal strategy and are actively digitizing our business processes and technologies

We currently have no digital transformation

strategy

Healthcare

63% Over 500 Employees Under 500 Employees

Top Industry

Company Size

Managing Data Growth Managing Risk of Social Networks Top Pain

Point

Top Drivers

Innovation

Top Transformational

Technology

Digital Transformation Comparisons

Business imperatives for digital transformation

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Intelligence Agility Customer-centricity

Intelligence – because those that own the data will win

“We don’t have better algorithms.

We just have more data.” - Peter Norvig, Director of Research at Google

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10

Agility – because digital disruption is coming

-CENTRI

C 11

CUSTOMER

EMPLOYEE CITIZEN

Customer-centricity

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Listening to the customer

Information transformation

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New channels of engagement, new sources of information

15 Source: KPCB Internet Trends 2016

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New Channels of Engagement

Source: 451 Research US consumer data 2010-2015

Inte

llige

nt T

rans

port

Sm

art B

uild

ings

Wearables

Industrial Autom

ation

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The IoT landscape

Source: 451 Research IoT Landscape, April 2016

Machine Learning

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•  Going digital means vast increase in data

•  Impossible to handle manually •  Algorithms improve with more data

– virtuous circle •  Machine learning is force multiplier

Putting information to work with analytics

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Process transformation

Don’t pave the cow paths

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London Map data: Google, Landsat

Collaboration has changed

3 pillars of DevOps

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Culture

Automation

Measurement

Continuous delivery

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Source: continuousautomation.com

Platform transformation

IT as a Differentiator

Hybrid Cloud

Scale-out/Distributed Apps

Mobile Endpoints + ‘Things’

Petabytes and Exabytes

API-based management

Old Style of IT IT as a Cost Center

On-Premises IT

Scale-up client-server Apps

PC Endpoints

Terabytes and Petabytes

Proprietary protocols

New Style of IT

Converged Infrastructure Server, Network, Storage Silos

IT priorities are changing

IT Departments Shift Toward Agility & Risk vs Penny-Pinching

31 Source: 451/Microsoft Cloud and Hosting Study 2016. n=1734, 11 countries

Everyone’s becoming a software company…

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But we don’t all realize it yet.

0 5

10 15 20 25 30 35 40 45 50

Early adopter Pragmatic Conservative Skeptical

Perc

enta

ge

Technology adoption stance

4Q14 (n=706) 1Q15 (n=1050) 2Q15 (n=975) 3Q15 (n=935) 4Q15 (n=1057) 1Q16 (n=749) 3Q16 (n=806) 4Q16 (n=613)

Source: 451 Research, Voice of the Enterprise: Cloud Transformation

4Q14: 9.5% 4Q16: 17.0%

Innovation Top Digital Transformation Driver

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22% 21% 34% 28% 24%

12%

27% 31%

44% 39% 37%

33%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Customer responsiveness

Increasing competitive differentiation

Enhancing our ability to innovate and develop

new products and services

Security Initiatives Transforming business processes to improve

operational efficiencies

Enabling more mobile/remote working

We have a formal strategy and are actively digitizing our business processes and technologies

We currently have no digital transformation strategy

In your opinion, which of the following activities are the biggest drivers for your organization's IT and Business Application investments over the next 12 months?

Workplace

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35

Customer Experience driving Digital Transformation

Current platforms inhibit digital transformation

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New platform to enable digital transformation

37

How? DevOps (Culture, Automation, Measurement)

What? Microservices, Continous Integration, Delivery & Deployment Why? Survival

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Industries

17% 21% 20%

10%

16% 20%

14%

26% 23% 23%

12%

24%

14% 16%

36% 32%

27%

48%

28% 29% 27%

21% 24%

28% 29% 33%

35%

41%

0%

10%

20%

30%

40%

50%

60%

Professional Servies Pharmaceutical/Healthcare

Other Manufacturing Retail Telco, Media and Utilities Financial Services

We currently have no digital transformation strategy

We are considering it, but have no formal plans

We are in the planning stage - researching to form our digital transformation strategy

We have a formal strategy and are actively digitizing our business processes and technologies

Financial Services, Telco and Retail Lead Digital Transformation

Source: 451’s 2H 2016 Voice of the Connected User Landscape: Corporate Mobility and Digital Transformation survey, conducted during August 2016. n= >500 IT and line-of-business decision-makers

21% 24%

20%

27%

14% 16%

29% 28%

15%

8%

21%

12%

28%

23% 27%

41%

28%

37% 35%

41%

17% 19%

9%

23%

16%

CONSUMER RETAIL PRODUCTS & SERVICES

MANUFACTURING EQUIPMENT & SERVICES

FINANCIAL SERVICES TELECOMMUNICATIONS - CARRIER/ISP

HEALTHCARE

Integrating business apps across silos and processes Adapting legacy business apps that are not flexible or customizable Mobilizing business applications Managing data growth Eliminating data silos

Pain Points Vary by Vertical

Source: 451’s 2H 2016 Voice of the Connected User Landscape: Corporate Mobility and Digital Transformation survey, conducted during August 2016. n= >500 IT and line-of-business decision-makers

Finance - banking

Social,mobile,global,localallhaveimplica0onsfordataconnec0vity

“Our busiest branch in 2014 is the 7:01 from Reading to Paddington - over 167,000 of our customers use our Mobile Banking app between 7am and 8am on their commute to work every day.” - Ross McEwan, CEO, February 2014

Manufacturing

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Key Takeaways for Digital Transformation

Survival is not mandatory – just ask these guys

Thank you! @nickpatience nick.patience@451research.com

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In order to grow Citi, we first have to grow our own perspective, skills and capabilities… Our curiosity, our openness to learning and trying new things, our ability to adjust and adapt quickly and our willingness to fail fast and fail small are the essence of a culture that innovates and exposes new value to our clients in real time. Stephen Bird, CEO Citi Global Consumer Group

Source: “A Transformation Journey,” Brad Miller, 2016.

Use small batch thinking, at all levels

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Inception

Hypothesize

Validate w/real use(r)s

Did it work?

Sources: “Good Software is a Series of Little Failures,” Coté, April 2016; The Lean Startup, Eric Ries, 2011. The Lean Enterprise, Barry O'Reilly, Jez Humble, and Joanne Molesky. See also overview of this approach at the IRS from Dec 2015. "Application Modernization, Service By Microservice," Kurt Bittner and Randy Heffner, Forrester, Dec 2015; "Best Practices For Agile-Plus- Architecture," Randy Heffner, Forrester February, 2015.

“We did an analysis of hundreds of projects over a multiyear period. The ones that delivered in less than a quarter succeeded about 80% of the time, while the ones that lasted more than a year failed at about the same rate. We’re simply not very good at large efforts.” Large financial institution

Increasing paint and tools rental revenue

Source: story from interviews, picture from Wikipedia. 50

How much do I owe the IRS?

Source: "Minimum Viable Taxes: Lessons learned building an MVP inside the IRS,” Andrea Schneider & Lauren Gilchrist, 2015.

Βεφορε Αφτερ

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Agile practices and collaboration for product and culture transformation

•  World class application development services

•  Proven transformational methodology

Big Data & Analytics

Modern, open, highly parallelized platform

•  Big data, in-memory, and database software

•  Industries most complete big data analytics offering

Cloud Native Platform Modern, open, highly

automated cloud platform

•  Platform-as-a-Service (PaaS) software with multi-cloud support

•  Record-breaking sales growth and adoption

Agile Product Development

Pivotal Cloud Foundry, layers & capabilities

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Application Framework

Runtime Platform

Infrastructure Automation

Infrastructure

Dev

Dev

Ops

BOSH

Contract: 12 factor app

Contract: BOSH Release

Contract: Cloud Provider Interface

IT Ops

Culture Cloud Native Framework Tools

Go

Source: “Get Started on Pivotal's Cloud Foundry Stack,” Coté/The New Stack, Jan 2016.

Pivotal Labs & Pivotal Cloud Foundry Worldwide, cross industry adoption

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And many more...

Engage with my brand!

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•  Learn more about Pivotal: http://pivotal.io

•  My chapbook on transforming to cloud native: http://cote.io/cloud2

•  Talk further: @cote or cote@pivotal.io

•  SpringOne Platform 2017: Dec 4th to 7th, San Francisco