In the 85th episode of Burning Platform, we host a repeat guest, Dion Hinchcliffe of Constellation Research. Dion is one of the most strategic industry analysts I know and he is always in tune with high level trends CIOs are factoring.
I invited him to present on the morphing world of IT services. We discuss consolidation of providers we are seeing in many companies, near shoring and maturing of S American talent, value pricing in services, the major impact of low-code tools, the coming impact of generative AI like ChatGPT, the emergence of FinOps as CIOs re-balance public cloud loads and optimize hyperscaler budgets.
He is extremely positive - says we are at a plateau of IT productivity.
As I have written in the last few weeks I too am extremely optimistic about new application markets which have emerged as a result of shocks from COVID, the Ukraine energy crisis, digital transformations. From intelligent returns in retail to EV charging infrastructure management and billing in auto to servitization support in industrial markets to smart insurance using new risk analytics, I am tracking over a hundred vertical extensions that have become critical in the last couple of years. Also, my recent trip to India has opened my eyes to application opportunities in emerging economies which reflect their unique regulatory, language and business practice needs. Many more opportunities there.
What’s not to like?
Here’s the reality check. Somebody will have to write these new applications and support them. Service firms will happily custom write them for you but need to accept shrinking revenues from previous legacy relationships. They have resisted previous opportunities to automate their own operations and will face new pressures to do so. Customers can have their own domain experts use new low code and AI tools to write them. Many, however. have forgotten the art of building and supporting new applications. They have become better at buying applications and integrating them. But buy from whom? Many software vendors are cautious about vertical or global extensions and hope partners will write them on their platforms. Lots of wishful thinking.
Both Dion and I are optimists but it is clear new fortunes will be made and many others lost. As Charles Dickens famously wrote “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity ….”
As the recent book I helped SAP execs write, it is imperative you adopt a “Business as Unusual” mindset given the big changes afoot.
Enjoy our banter for a little over 20 minutes
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