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Technology alone isn’t enough for customers, and what the data tells us

Now to look IT-specific, Gartner has released new research around cloud usage and highlighted how cloud spending will overtake spending on traditional IT solutions in 2025. The research firm’s “cloud shift” research focuses only on enterprise IT that can transition to the cloud, including application software, infrastructure, business process services, and system infrastructure.

Quoting Commercial Integrator, in about three years, 51% of IT spending in those four categories will have shifted from traditional solutions to the public cloud, compared to 41% this year. A large part of cloud spending will be on application software, with about 66% of spending on that technology directed toward the cloud. That’s up from 57.7% this year, according to Gartner.

This year, traditional on-premises offerings will make up 58.7% of the addressable revenue, but growth in traditional markets will be much lower than in the cloud. 

Separately, a survey from IDG focused on digital transformation highlights that the tech behind it may not be ready.    Eighty-nine percent of IT executives admit that existing infrastructure, operations, and culture constrain innovation and strategic business growth. At least half the survey group, 49%, say their IT infrastructure inhibits business growth “to a great extent.” 

Eighty-seven percent indicate that the working relationship between developers and traditional IT is “hindering their ability to take full advantage of digital transformation.” It appears not a whole lot is being done yet to address this — just 20% are in progress with implementing platform teams that collaborate with DevSecOps or agile team. 

And tech alone doesn’t unlock success – in research from Infosys Knowledge Institute, having digital technologies alone isn’t enough to meet business objectives and drive profits. Instead, it must move behind traditional IT metrics.    As digital adoption rates soared during the pandemic, the study also indicated a point of diminishing returns for companies with high levels of adoption. Companies with above-average adoption rates generated slightly less profit growth than those with lower adoption, while those with average rates generated the most. The study data suggest that mere adoption is not enough; what matters most is the effectiveness with which companies use their technology.

Why do we care?

I won’t lead with the “cloud is coming”.  I’ve said that too often recently.

Instead, that last research study.  Having technology alone isn’t enough, it has to be made effective.    The positive to that is that this is a huge opportunity for those who focus there.  The negative is that many IT providers have gotten by just keeping the lights on, and the data says that simply isn’t enough any more.   

The data tends to be a bit obvious in the direction when put together this way – that’s not to say it’s easy, but the direction feels very clear.