The Application Economy Evolves


Cloud, automation and orchestration, and big data analytics will be the top three strategic trends in the coming years.

It is time to manage the application portfolio like the business asset it is.
First, focus on the application services required to secure, scale, and digitize
IT and business processes. Automation and orchestration are key foundational tenets in this first phase of digital transformation. As organizations transition to the second phase, it is important to instrument application services to emit telemetry for unified visibility and control over policy enforcement. In the third phase, this telemetry from application services can be studied by cloud analytics tools to provide actionable operational and business insights such as predicting capacity, preventing loss, and delivering differentiated customer experiences.

80% of organizations are executing
on digital transformation—with
increasing emphasis on accelerating
speed to market.


According to senior leader respondents, 4 out of 5 organizations are embarking on digital transformation. Consistent with our findings last year, IT optimization and business process optimization are the top reported benefits of these initiatives. This demonstrates that IT organizations continue to re-evaluate their structures, processes, and workflows to set the stage for the next phase in their digital transformation journey. With organizations beginning to breach the second phase of digital transformation—a period marked by an increase in applications and an expansion of automation—their growing dependence on applications should be no surprise. When we asked organizations why they wanted to engage in digital transformation, it came down to business agility and differentiated customer experiences: the primary driver for organizations was improving the velocity of new product/service introductions (67%), followed by responding to emerging competitors (32%), and the behaviors of new buyers (31%). That every business today is an application business is not just a catchy marketing phrase.

For 62% of organizations, applications are essential to business; without applications, they cannot operate. And 36% tell us applications support their business and provide competitive advantage. Only 2% of respondents globally reported they do not need applications to operate—a group primarily composed of organizations with fewer than 100 employees.

It’s important to note that the use of the term “business” here is not restricted to revenue generating applications. External-facing applications make up less than half (45%) of an organization’s app portfolio. The rest are internal facing and include productivity, process related, and, increasingly, operational applications. These internal-facing apps are critical to digitizing business processes—and making them consistent, repeatable, and scalable. As digital business activities mature, organizations are looking to combine digital services from previously unconnected industries or segments, forming new ecosystems to create value. Senior leaders reported that cloud, automation and orchestration, and big data
analytics will be the top three strategic trends in the next two to five years.

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