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7 trends defining the enterprise IT market today

7 trends defining the enterprise IT market today

What’s new in enterprise software and services? Plenty. Here’s a quick rundown of the key trends IT leaders should be following.

When Tim Potter, principal at Deloitte Consulting, surveys the current enterprise software and services landscape, he sees potential for IT organizations to spur both innovation and rapid growth.

“Enterprises continue to seek software and technology solutions to improve services, deliver more compelling products, streamline internal processes, and increase productivity,” he says, adding that new technology advances are continually being introduced to help meet enterprise demands.

“Supporting the business while protecting corporate data will continue to be a challenge for CIOs,” Potter notes. “As such, IT leaders have, and will continue to, seek software and services that enable them to manage this increased complexity.”

Here is a look at the latest trends in the enterprise IT software and services market, to help IT leaders make the most of what’s emerging today.

AI takes aim at the enterprise

From front-office transformation to new go-to-market strategies and business models, artificial intelligence is poised to reshape the enterprise, says Michael Shehab, innovation leader at PwC US. He advises IT leaders to examine their current operations to identify issues that can be resolved with AI. Doing so will require building new skill levels across the organization to ensure that teams are able to successfully deploy AI systems and design software and data environments that are fully compatible with the new strategies.

Shehab observes that enterprises are already making massive investments in AI. According to PwC research, AI has the potential to provide $15.7 trillion in global economic growth by 2030. “With the recent influx of new AI-driven tools and solutions, such as generative AI, most enterprise organizations today want to get their hands on the advanced tech to transform how their company does business,” he says.

ChatGPT captures enterprise imagination

Given the incredible virality ChatGPT has experienced since its launch, generative AI is currently at the forefront of many people’s minds, observes Brandon Jung, vice president of ecosystems at Tabnine, which is developing an AI-code writing technology. “There’s a lot of chatter around its future applications, its potential, and what this means for the future of AI, some of which is accurate and some of which is false.”

The potential enterprise applications for conversational AI tools are vast, and enterprises are exploring the possibilities of generative AI, albeit cautiously. “The more structured the content, the better these tools will perform,” Jung says. “Programming code is an example of a structured language that has excellent opportunities available.”

Customer-service chatbots are also improving rapidly, Jung says. “We will also see applications in basic boilerplate HR templates, legal documents, news reports, instruction manuals, and so on.” Algorithm creativity is currently limited by the limited state of training data sets. “While the AI output might be unique, it will likely follow the style, word choice, and construction of the underlying training data,” he explains. “It won’t be writing award-winning fiction novels any time soon.”

Edge computing arrives

The edge economy is one of the most important trends this year in the enterprise services market, says Ken Englund, technology, media, and telecommunications leader at EY.

With the internet of things (IoT) expanding, enterprises are finding themselves processing increasing amounts of data. “Transferring this data back and forth to large enterprise cloud platforms for processing is very costly and time consuming,” Englund observes. “Therefore, enterprises need intelligence in their network at the level where the data is collected — locally — at the edge of the network.”

Englund advises CIOs to consider investing in edge ecosystems, given their ability to streamline processes and improve customer experiences. “It’s important for vendors to explore opportunities with edge ecosystems to disrupt existing business models, even if it puts them in competition with their own legacy business,” he adds, noting that the benefits edge ecosystems provide customers are worth the investment. Englund also believes that the payback window will eventually compress, potentially fueling even more innovation and technology investments.

Private wireless picks up steam

Private wireless adoption is accelerating, providing enterprises with an increasingly attractive and viable communication option, observes Roy Chua, founder and principal at research and analysis firm AvidThink. “Recent technology improvements, increasing awareness of 5G’s benefits, and more open government spectrum policies have increased the adoption of private mobile networks.”

Private wireless networks deliver both low latency and high throughput. The technology also allows enterprises to add new services quickly while responding to data traffic growth. “Transformative use cases include Industry 4.0, smart agriculture, campus automation, smart cities, autonomous robotics, and telehealth,” Chua says.

Chua notes that research firm Analysys Mason estimates there will be more than 20,000 private wireless networks — both LTE and 5G — by 2026, and that enterprises will spend more than $5 billion on these networks in the next four years. Innovative CIOs see the promise of private 5G and want to get ahead to ensure early learning and understanding of how private 5G innovation can drive business value, Chua says.

“They start with an innovation lab or starter network with a few 5G base stations and 5G access devices — phones, tablets, 5G modems, and routers, to connect with industrial devices,” he explains. Private wireless networks can be rolled out within just a few weeks, but it’s important to find a service provider has expertise in shared spectrum technology, network deployments, solution integration and 24/7 network monitoring and support, Chua adds.

Digital transformation enters 2.0 phase

The way CIOs approach digital transformation programs is changing dramatically, says Shafqat Azim, a partner with global technology research and advisory firm ISG. He notes that transformation initiatives are coming under greater scrutiny as CIOs seek to drive real-world business value.

Azim predicts that enterprises will continue moving away from transactional-SLA-focused service projects that don’t include any transformative elements. “Digital transformation will get embedded within run-and-operate service delivery models, moving from a large transformation program mindset to a continuous transformation mindset,” he says.

Azim advises CIOs to begin viewing digital modernization investments through a value realization and cyber risk management lens, along with a traditional cost optimization focus. “Ensure that solutions for large-scale application and platform transformation … have an explicit overlay of end-to-end digital threads,” he adds.

Passwordless authentication goes prime time

The world has moved beyond the point where a simple password can provide sufficient protection, states David Burden, CIO with open-source identity and access management technology firm ForgeRock.

Spurred by the FIDO2 standard, the move to passwordless authentication is gaining momentum. It’s now the largest trend for enterprise software companies, Burden says. “The industry’s biggest players, including Apple, Microsoft, and Google, among others, have assisted with expanding the FIDO2 standard, announcing plans to enable passwordless authentication across multiple devices, browsers, and platforms.” He points to Gartner’s prediction that by 2025 over 50% of the workforce, and more than 20% of customer authentication transactions, will be passwordless — a major increase from the fewer than 10% today.

Passwordless authentication also promises to significantly enhance customer experience. “With an extensive enterprise authentication process, a user can log into an online account without having to enter a password,” Burden explains. “This eliminates the concern for forgotten passwords and the burdensome task of password recovery.”

Passwordless authentication also saves time. “It protects the most commonly used and vulnerable enterprise resources while also delivering an outstanding user experience and boosting workforce productivity,” Burden says. Overall, he notes, FIDO2 has the potential to improve both security and ease of use for online access while greatly diminishing the risk of stolen credentials by cybercriminals.

Cloud-native as platform of choice

Rajesh Kumar, CIO at digital transformation company LTIMindtree, predicts a bright future for cloud-native platforms, a way of building and running applications that takes advantage of distributed computing capabilities supplied by the cloud delivery model.

Cloud-native apps are designed and built to exploit the scale, elasticity, resiliency, and flexibility of the cloud, an approach that allows adopters to go live via platform configuration without the need for significant custom development. “Any extensions and customizations are built externally by integrating with the platform,” he explains.

Serverless applications running on cloud-hosted platforms differ from traditional enterprise software deployments, in which software is deployed on server infrastructure hosted either on-cloud or on-prem, Kumar says. “This trend extends to developing end-user applications using low-code platforms.”

The concept of developing systems based on requirements built from the ground up is becoming dated. “Today’s approach is to choose the right platform and plan the configurations or development project without having to worry about a deployment plan or scalability architecture,” Kumar says. “With the advent of widely available APIs and platform-driven solutions, CIOs can now focus on innovations that drive business outcomes rather than getting consumed in topics such as infrastructure, hosting, network, and scalability issues.”

Hyperscalers, such as Microsoft, Amazon, and Google, have a major presence in this space, since they possess the horsepower needed to host large-scale platforms while offering massive scalability, Kumar observes. He notes that secondary market players include cloud-native platform providers such as Salesforce and ServiceNow.