Cloud

Digital transformation will lead 60% of enterprises to move IT off-premises by 2019

The top three IT initiatives for 2018 include business intelligence, artificial intelligence, and big data, according to 451 Research.

Building a slide deck, pitch, or presentation? Here are the big takeaways:
  • 60% of enterprises plan to shift IT off-premises by 2019, driven by digital transformation and big data. — 451 Research, 2018
  • The top three IT initiatives for 2018 are business intelligence, artificial intelligence/machine learning, and big data. — 451 Research, 2018

Digital transformation and the big data revolution are leading businesses to reshape their IT departments, according to a new report from 451 Research. Some 60% of enterprises report that they will run the majority of their IT operations off-premises by the end of 2019, primarily through public cloud infrastructure and Software as a Service (SaaS) offerings.

This matches recent growth in the cloud market: Public cloud services grew nearly 29% in the first half of 2017, with revenues of $63.2 billion spread across SaaS, Platform as a Service (PaaS), and Infrastructure as a Service (IaaS), as reported by our sister site ZDNet. SaaS accounted for 69% of the overall public cloud market share, ZDNet reported, and can potentially help IT departments lower costs.

Enterprises report that the largest spending increase this year will be for IT delivered as a service, as opposed to on-premises, the 451 Research report found. Security will also receive an influx of money, with 16% of organizations saying that it will get the largest budget increase in 2018—not a surprise, given the number of high-profile attacks hitting headlines.

SEE: IT leader's guide to achieving digital transformation (Tech Pro Research)

Tech giants are becoming the most strategic technology suppliers for large enterprises: 35% of organizations said Microsoft will be their most strategic partner by 2019, while 17% say Amazon Web Services (AWS) will be, the report noted.

Top IT initiatives for 2018 are all data-centric, the report found: Business intelligence (named by 45% of enterprises), machine learning/artificial intelligence (AI) (29%), and big data (28%).

Meanwhile, emerging technologies such as blockchain, edge computing, and biometrics came in at the bottom of the list of priorities. However, businesses can expect those to continue growing in the future, the report noted.

Companies say digital transformation is driving many of these changes; however, many transformation plans remain murkey. Some 60% of enterprises reported that they had no formal transformation strategy in place, and many said they face challenges achieving strong IT-business alignment.

"The survey suggests that many - but certainly not all - organizations are finally reaching the point where they can focus on endeavors that help differentiate the business, instead of merely keeping the lights on," Melanie Posey, research vice president at 451 Research, said in a press release. "In 2018 we expect to see much of this effort focused around a new set of approaches to data optimization and analysis."

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Image: iStockphoto/gorodenkoff

About Alison DeNisco Rayome

Alison DeNisco Rayome is a Senior Editor for TechRepublic. She covers CXO, cybersecurity, and the convergence of tech and the workplace.

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