‘Digital Transformation’ Uneven, Survey Finds
"Traditional" enterprises, a label attached to established companies struggling to make the transition to cloud and other digital platforms, get a failing grade when it comes to upgrading their IT infrastructure when compared to so-called "digital natives".
According to yet another vendor survey on the state of digital transformation, this one released Thursday (Dec. 1) by Red Hat (NYSE: RHT), most established companies are merely reacting to digital moves by competitors. Hence, the survey conducted by Bain & Company gives these firms a failing grade, with about 80 percent of those surveyed scoring below 65 on a 100-point scale use to assess progress in aligning digital technologies with business outcomes.
While agile "digital natives" are launched based on a growing menu of cloud-native applications, the challenge for established companies is finding ways to mesh cloud computing and agile application development based on emerging technologies such as application containers with legacy infrastructure and applications.
Meg Whitman, CEO of Hewlett Packard Enterprise (NYSE: HPE) addressed this conundrum in explaining why the company was selling off its application software assets: "Most people who work in the software business and Silicon Valley want to grow assets. And actually some of these assets should actually be maintained on a stable platform that extends the value for customers."
Meanwhile, the Red Hat survey found that the business case for shifting to cloud and other digital infrastructure varied based on current IT requirements and the nature of a respondent's market segment. For those taking the leap, the key incentives besides keeping up with competitors were boosting market share, accelerating the delivery of new products and services along with streamlining application development.
Related to the last point were a growing desire to make existing IT infrastructure more flexible, speeding time to market and cutting costs. Hence, the Red Hat study asserts that more companies are embracing application container technologies that Red Hat has been at the forefront of developing.
Despite a slow rollout in production and lingering security issues along with practical consideration such as pervasive storage across container infrastructure, Red Hat asserts the technology is attracting customers because it offers flexibility in the form of portable containers that run across public and private clouds.
According to the survey, initial container adopters are reducing application development time by as much as 30 percent while gaining infrastructure flexibility. The survey further argues that hardware productivity increases linked to container adoption could yield cost savings as high as 15 percent.
First, however, enterprises must be convinced of the return on investment in cloud-based technologies such as containers. What that in mind, Red Hat and others—including the Kubernetes startup Heptio launched earlier this month—are striving to take application container mainstream.
As the Red Hat survey reveals, however, many so-called "traditional" enterprise have yet to be convinced.
Red Hat said the Bain survey includes responses from 449 senior IT executives and DevOps personnel across different industries and company sizes.