Over the past 20 years or so that I’ve been involved in the enterprise software industry, I’ve heard endless predictions about how the industry is going to dramatically change and how this technology or that technology, or new delivery models like software as a service are going to put the established vendors out of business.
As far as I can tell, not that much has actually changed. Sure enterprises are using some cloud apps and improving mobile device support. But where the rubber actually meets the road, enterprises are still running their own infrastructures and closely guarding their content and data behind layers of IT administrators. The players aren’t changing much either, with Microsoft, Oracle, IBM and SAP accounting for the lion’s share of revenues.
Now, for its 2016 industry predictions IDC is saying that converging technology forces – primarily mobile computing, cloud services, big data and analytics, and social networking – will lead to wholesale digital transformations that will essentially blow up everything we know about enterprise software today. As enterprises embrace emerging technologies, IDC predicts we’ll see the creation of what it’s calling the “DX economy.”
According to IDC, besides determining the winners in nearly every industry – the companies that embrace the new technologies will win while those who don’t will lose – the DX economy will fracture the enterprise software industry. Per IDC’s press release about its research:
Nearly a third of today’s IT suppliers will be acquired, merged, downsized, or significantly repositioned. In this environment, enterprises will have to constantly monitor and assess the solutions offered by their suppliers and partners and be prepared to realign these relationships as needed.
Talk about disruption.
But the big question is whether IDC is right. Is this the moment when the enterprise software industry truly changes, or is this just another hype cycle?
Both sides have a case. On one side, you have the massive investments enterprises have already made in hardware and software which simply aren’t going anywhere. On the other, you have increasingly tech-savvy customers demanding a more cohesive and personalized experience than ever before. There’s also the much-discussed Internet of Things (IoT) that IDC says will be a “fertile area” for DX.
There’s little question that digital transformation is one of the hottest topics in the enterprise space today. But is it real or just another passing fad? Let us know what you think.
In your spare time, be sure to head over to IDC’s FutureScape landing page to soak in a series of 33 on-demand presentations covering many different industries and market segments. Full disclosure: I have not actually watched them all, but many do look promising. I’m interested in learning what’s up with wearables, for instance.