Insight

  • Network Spending Trends in 2022

    Enterprise Strategy Group’s annual technology spending intentions report for 2022 surveyed 706 senior IT decision-makers at midmarket (i.e., 100 to 999 employees) and enterprise (i.e., 1,000 or more employees) organizations across North America, Western Europe and Asia Pacific. From an overall perspective, the good news is that 62% of organizations plan to increase overall IT spending. As part of that research, respondents with purchasing influence or authority for networking products and services were asked about their organization’s spending plans in this area over the next 12 months. The data indicates that 52% are expected to maintain the prior year’s budget levels and 43% will increase spending. Only 5% will shrink their networking budget.

    NetworkSpending1Given that modern IT environments are highly distributed and complex, ESG also asked respondents to identify the areas where their organization would make the most significant investments in its network infrastructure over the next 12 to 18 months.

    More than one-third (38%) of organizations will provide additional training to their networking staff on modern IT operations best practices; 36% will deploy cloud-based network management solutions; and 35% will deploy AI/ML for network self-healing and optimization capabilities. The responses largely confirm the demand for technologies highlighted in a 2021 ESG research report on network modernization.

    As organizations modernize their IT and application environments, they recognize that doing so requires training network staff to ensure the network can support these new IT operations and best practices. The faster growth of closely related IT priorities — many driven by post-COVID-19 hybrid work environments — including cybersecurity and distributing applications to the cloud or edge, suggests that network infrastructure will continue to play a vital role in enabling these environments.  

  • Amazon’s Strategy of Operational Excellence

    Cloud

    In the wake of the 4th annual Amazon Web Services (AWS) user conference, AWS has finally emerged as a leader in cloud infrastructure and platform services. AWS now has over 1 million active customers and year-over-year growth in EC2 instances, data transfer, and database use that is close to 100% as of 2015 Q2. AWS did $4.6 billion in revenue in 2014 and expects to see $7.3 billion by the end of 2015 which is close to 60% growth. Amazon is now adding over $1 billion in new revenue per quarter. It’s rare to see these kinds of growth rates in a business that is closing in on 10 years old. This shows the transformative effect that cloud services are having on the IT business.

    But the high growth of AWS is far more than a story about being in the right place at the right time. Although AWS was a pioneer in the IaaS and PaaS market segments, plenty of vendors, including storied names like Microsoft, IBM, and Oracle, now have a strong cloud presence. Survey data also shows private cloud being a preferred path forward which is a path that AWS doesn’t support. So what is it about AWS that sets it apart from its competitors? We believe that it boils down to one factor: operational excellence.

    AWS and Amazon both hold the objective of high volume and low cost as core values that are part of their DNA. While it’s easy for most vendors to make occasional efficiency claims, the growing strategic importance of IT meant that enterprises have been trained that they need to pay to play. This has been especially true since 2000 in the highest growth area of IT, which was software. Much of this software revenue was tied to proprietary products with high price tags and licensing policies that in today’s world seem punitive. While open source software products have been successful as low cost alternatives, they address a different target market due to their unique business model, which impacts their scope and performance. The net result has been an IT market that has grown weary of high prices and is ripe for disruption.

    From the start, AWS has designed its data centers to deliver reliable services on demand at a low price. AWS has now perfected the process of designing, building, and operating data centers. AWS employs purpose-built servers, storage, and networks which enables them to carefully control costs while ensuring delivery of reliable on-demand services. AWS has also mastered how to manage their supply chain to make sure they are well insulated from cataclysmic events given the rate at which they now are bringing capacity online. This operational excellence also extends to how AWS develops software services. These services often have their roots in open source but are reengineered by AWS to improve performance. The result has been 516 new services launched in 2014 and 487 so far in 2015. AWS has now reached a point where from an IaaS and PaaS perspective they have comprehensive offerings with significant depth in infrastructure, security & compliance, integration, analytics, application services, mobile services, development, operations, and support.

    Because all of this has been developed with a continual eye on delivering high volume at a low cost, AWS pricing sets the bar to beat in the industry. While Microsoft and Google monitor and adjust their prices to achieve parity or leadership in some cases, AWS is driving margins of 17%, meaning that it would be hard for them to lose any race to the bottom. Now that AWS has demonstrated that they can deliver reliable on-demand services worldwide, enterprises are taking notice. The number of enterprises now all in on AWS has exploded in 2015 and we see this largely as a recognition that AWS’s focus on operational excellence is a winning strategy. However, while other strategies such as product leadership and customer intimacy are also formulas for success, AWS is pursuing a strategy that is new to the IT market where there is a vast sea of pent-up demand for exactly what AWS is delivering.

  • Cloud-native Applications

    See how IT professionals use cloud-native applications to help advance their businesses into the future with this free Enterprise Strategy Group Infographic, Distributed Cloud Series: Cloud-native Applications.


    For more information or to discuss these findings with an analyst, please contact us.
  • The core tenet of a zero trust strategy is least-privilege access. Yet, organizations continue to rely on user and machine identities that are susceptible to compromise, abuse/misuse, and theft. Risk is compounded by over-permissive, static access rights that provide little to no visibility into who and what is using access and how. Vaguer is how identities are being/should be monitored and protected. Availability of modern, cloud-managed identity services is widespread. Yet organizations have been slow to pivot their security programs from traditional endpoint, network, and SecOps to an approach that focuses on identity orchestration and experiences, which is dynamic and distributed. Where there are no perimeters, a multitude of identity verification services and managed identity services exist.

    In order to gain insights into these trends, ESG surveyed 488 IT and cybersecurity professionals personally responsible for identity and access management programs, projects, processes, solutions/platforms, and services at large midmarket (500 to 999 employees) and enterprise (1,000 or more employees) organizations in North America (US and Canada).

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  • Observability from Code to Cloud

    Organizations continue to try to strike the balance between cloud-native and legacy infrastructure. Whether organizations take a “cloud-first” or a “cloud-when-it-makes-sense” approach to their digital transformation initiatives, the number and variety of infrastructure options and locations continue to expand. Specifically, IT operations teams continue to strive to improve collaboration with developers on building modern application architectures and establishing the related processes. As companies accelerate or embark on their digital transformation journeys, what is the expected role of ITSM in enabling businesses to realize the benefits of automation, observability, intelligence, and optimization?

    To gain insight into these trends, ESG surveyed 357 IT, DevOps, and application development professionals at organizations in North America (US and Canada) responsible for evaluating, purchasing, managing, and building application infrastructure.

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  • Revving Up the V12 for Full Acceleration

    I am at VeeamON 2022 in Las Vegas this week attending the event in person. I had the great opportunity to spend time with a few key executives from Veeam and discuss their latest release and plans for the future.

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  • Environmental sustainability, already a priority of executives in many organizations, has infiltrated IT purchasing to such a degree that it has become the most important buying consideration for endpoint devices. In response, IT leaders are learning to become sustainability advocates, which in turn is driving changes in how vendors position and prioritize features of their devices.

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  • Distributed Cloud Series: Cloud-native Applications

    ESG conducted a comprehensive online survey of IT professionals from private- and public-sector organizations in North America (United States and Canada) between December 6, 2021 and December 17, 2021. To qualify for this survey, respondents were required to be IT, DevOps, and application development professionals responsible for evaluating, purchasing, managing, and building application infrastructure.

    This Complete Survey Results presentation focuses on cloud-native application trends, including bridging the gap between container development, Kubernetes, and IT operations through CI/CD pipelines, as well as building, maintaining, and operating a developer-ready infrastructure without impacting developer velocity.

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  • My colleague Rob Stretchay completed research on the challenges organizations face as their applications become more distributed across clouds. In this video, we discuss some of his findings, including how developers are spending their time – including their time remediating security issues. This is interesting to me because we’ve been talking about developer workflows and whether developers can take on some security processes. Developers want to focus on building software, but they care about quality, reliability, and they don’t want to waste time doing rework. Check out the video to hear us discuss the opportunity for security solutions to help.

    Watch the video below, and be sure to check out the new research: Distributed Cloud Series: Observability Trends

  • Distributed Cloud Series: Observability Trends

    ESG conducted a comprehensive online survey of IT professionals from private- and public-sector organizations in North America (United States and Canada) between November 15, 2021 and November 20, 2021. To qualify for this survey, respondents were required to be IT, DevOps, and application development professionals responsible for evaluating, purchasing, managing, and building application infrastructure.

    This Complete Survey Results presentation focuses on building modern application architectures and establishing the related processes, including the expected role of ITSM in enabling businesses to realize the benefits of automation, observability, intelligence, and optimization.

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  • Women in Cybersecurity: Sharon Goldberg

    This week I’m pleased to share my interview with Sharon Goldberg, the cofounder and CEO of BastionZero. She is also a computer science professor at Boston University. Check out our video below.

    After graduating with a degree in electrical engineering from the University of Toronto, Sharon started her career as a telecom engineer at a power company building communications systems for its different power stations. After a few months, she was bored so she applied and got accepted to grad school at Princeton University, where she joined a team using lasers to encrypt communications. She took a course in cryptography and got hooked, moving more into computer science and internet security, earning her PhD in applied cryptography and network security.

    At the end of her PhD, she says she took the typical route of becoming a professor. Once she had tenure, she had more freedom to work on what she wanted, and realized she wanted to build something that people could use, instead of just doing the research and publishing a paper, and moving on to other research.

    So she started BastionZero to help organizations better manage remote access. It’s built around the concept of cryptography, and it was something she worked on along with her cofounder, Ethan Heilman, for the past decade. 

    “There’s an opportunity to change the way the market actually does remote access…to not have a single route of trust that controls the access but to have multiple routes of trust that control the access…So if there is a compromise, the security of your system doesn’t fall apart.”

    While leading her company, Sharon continues to teach cybersecurity. “When you teach, you can’t just stand there and teach stale stuff. When you teach, you teach on a broad set of topics…When you talk to students and see how they are absorbing the material, it’s an incredible privilege.”

    She says she’s seen progress with women in tech and cybersecurity. She recalls how when she started out, in the early 2000s, women in tech had to prove themselves and were often underestimated. “You always sort of assumed that no one was going to take you seriously and you were just going to show them…a lot of women who got through that era had that kind of attitude. I’ll just show you, you’re underestimating me. Then you go off and do something really hard…I think women who are starting out now are more surprised when they aren’t taken seriously, which is progress.”

    Her advice: if someone underestimates you, don’t take it seriously, it’s their problem. Build a strong network and support system; find people who you click with and who understand your problem area to help you deal with any issues with fear or inadequacy when you start something new. 

    She also says things happen fast in this industry. She uses social media as a tool to connect with people and learn from how much information is shared in the cybersecurity community.

    Check out Sharon’s company BastionZero to learn more. If you’re heading to RSA in a few weeks, you can root for her in the Innovation Sandbox competition where BastionZero is a finalist! You can also follow her on twitter.

    Please visit Enterprise Strategy Group’s Women in Cybersecurity page, where you can also find a link to the full audio interview with Sharon, view past episodes, and join us to hear more inspiring stories in future shows.

  • Cloud-native Applications

    Today’s businesses are evolving rapidly to meet the demands of their customers, but traditional and heritage applications often do not meet the requirements. IT organizations are trying to keep their businesses running while migrating to new, modern approaches to advance the business into the future. Many organizations are taking a “cloud-first” approach to their digital transformation initiatives, which requires building, maintaining, and operating a developer-ready infrastructure without impacting developer velocity.

    To understand cloud-native application trends, including bridging the gap between container development, Kubernetes, and IT operations through CI/CD pipelines, ESG surveyed 387 IT professionals at organizations in North America (US and Canada) responsible for evaluating, purchasing, managing, and building application infrastructure.

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