Businesses today have to contend with a new wave of innovative technology start-ups that are able to move quickly to capitalize on changes in the business environment. To compete, traditional businesses will have to change their operating model and look to IT as a source of innovation and competitive advantage.  In line with this, 2016 will see businesses shift their IT focus from infrastructure to application enablement, with more of the IT budget going to application development, analytics and big data. This sets the stage for some of the key IT trends that we see emerging in 2016.

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An example in the hospitality business is Airbnb. This is a company that was started in 2008 and now has a $25.5B valuation compared to a large hospitality corporation like Marriott, which was started in 1927 and has a current valuation of $20B. Airbnb is a software company and their IT is in the cloud. They connect people who are looking for lodgings with people who can provide lodging for a fee over the Internet.  In his state of the Union message in  January last year President Obama urged that the United States end the 50 year embargo against Cuba creating a surge of demand for expats, businessmen, and tourists to go to Cuba. By April Airbnb was booking rooms in Cuba. How long do you think it will take Marriott to have hotels in Cuba?

There are two major disruptions happening here. First the most obvious is that Software and services businesses that use the social, mobile, analytics and cloud are more agile than brick and mortar businesses becasuse they can focus more on applications than on infrastructure. The second disruption is on the customer side. The consumer that used to book a standard room at a hotel, is now a “pro”sumer, who is empowered to book whatever, where ever, and at any fee that he chooses. Are there many people who want to find lodging this way?  The meteoric rise in Airbnb’s valuation would suggest there is.

To compete, traditional businesses will have to transform their operating model to become more agile and connect with customers who are more sophisticated and empowered.  Business will need to look to IT as the Information Technology experts for innovation and competitive advantage.  In line with this, 2016 will see businesses shift their IT focus from infrastructure to application enablement, with more of the IT budget going to application development, analytics and big data. IT transformation will be a key driver for success in 2016.

The value of traditional IT can be thought of as a triangle with more than 50% of the value and focus on infrastructure. In this new business environment, we need to turn that triangle upside down, and focus on the value that we bring to the end users through application development and analytics.

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Infrastructure is still very important.  In fact it is still at the base and is the tip of the spear that facilitates the penetration of development platforms and applications. However, infrastructure must take less of IT’s time, effort, and budget. This can be done through virtualization, automation, software defined, and cloud. Hitachi Data Systems is providing virtualized, converged, and software defined infrastructures that enable the upper layers in the IT stack, development platforms and applications/analytics, to become more agile and scale to meet businrequirements

SAP is a key contributor to this transformation in IT. The move to in-memory databases will gather momentum as faster reporting and analysis deliver a clear competitive advantage in today’s real-time business environment. The consolidation of SAP’s business suite onto the HANA in-memory database with S/4HANAis a great example of how we can turn the IT cost triangle upside down.

SAP S/4HANA allows for a radically different application architecture to simplify the data model. The transactional processing is drastically simplified where all data is completely in memory, using only one copy of the data in a columnar store. A new UI and a new framework for modifications and extensions enables more resources to be shifted from operations to applications and realtime analytics.

Hitachi Data Systems partners with SAP to simplify and optimize the infrastructure through converged UCP systems that are tested and certified for SAP HANA. oXya, a subsusidiary of Hitachi Data Systems, provides SAP technical and managed hosting services. oXya is SAP Certified in hosting and cloud services, supporting global and midsized organizations and hosting nearly 250,000 SAP users worldwide across all industries. oXya can work with customers to design a dedicated infrastructure and tailor IT solutions to meet their stringent  SLAs for SAP.

Hitachi Data Systems, oXya, and SAP are positioned to help transform IT

Blog originally posted on the HDS SAP Community by Hubert Yoshida

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