5 Opportunities in Enterprise Infrastructure for 2013

Posted by | January 25, 2013

I’ve spoken with a number of CIOs recently, and they all recognize that almost all of their enterprise infrastructure must be reimagined. Technologies like mobile, big data, in-memory databases and virtualization are fundamentally altering the foundations of computing—processing, memory, network, storage and even the physical boundaries.

Meanwhile, the cloud (private, public, hybrid) is changing the economics of computing. Social computing and machine-to-machine are flooding enterprise computing platforms with information storms. Agile development teams are releasing new code at a rate of three to five times faster than previous methodologies (such as waterfall and RAD). Everyone agrees—change is coming in waves faster than ever before. Consequently, enterprises need to change the way they look at their technology infrastructure. All of which is creating great business opportunities for startups and emerging growth companies.


CIOs’ new priorities for enterprise infrastructure

In computing parlance, we are in our fourth generation of enterprise infrastructure. In previous generations, large technology vendors fought fierce commercial infantry wars to occupy an enterprise’s technology stack. It took months and sometimes years for an enterprise to select and adopt a very small component of a computing architecture, such as a server operating system (OS/2, Windows NT, HP UX, etc.) or a development language (Visual Basic, Java, etc.). These were expensive battles, and only a few large technology companies, such as Microsoft, HP, Oracle and IBM, had the resources to compete.

How different the world is today. Enterprise boundaries are dropping and the barriers to entry for enterprise infrastructure vendors are dropping even faster. Once exclusively the province of just a few large well-capitalized technology infrastructure companies, new competitors are emerging from all corners of the enterprise infrastructure industry.

To give you an idea of the extent of the proliferation, CRN published an article about the 100 coolest cloud computing vendors last year. Think about that: 100 enterprise infrastructure platform vendors from which to choose. From Amazon, HP, Unisys and Rackspace to the New York Stock Exchange, vendors are offering infrastructure as a service. Vendors like Microsoft, Google and EMC are providing application-level services, and vendors like EngineYard, SAP, Salesforce.com and Oracle are providing application-level services with Platform-as-a-Service models. CIOs are wading through this overwhelming panoply of choices to decide where their next application is going to be written and run.

The best CIOs I know are rising above the din of choices and unshackling themselves from old definitions of “their enterprise.” Instead of trying to constantly harness waves of change into existing frameworks, they are establishing core sets of priorities that define how they are going to manage in the future.


Opportunities for startups and emerging growth companies

Smaller, emerging companies have foreseen this developing market and are capitalizing by building a new wave of infrastructure tools. These companies represent tremendous investment candidates for private equity, venture capital, and other organizations that share their vision. Specifically, we are seeing a distilling of priorities inside enterprise IT in five core areas, each of which transcends vendors and physical deployment decisions:

  • Security: Are my applications and data secure? Do the right people have access to the right resources?
  • Data: What data do I have? How do I access it? How can I make it a compounding asset?
  • Monitoring: Are my applications performing (available, scalable) and supportive of the business?
  • Skills: How do we harness the best available talent to execute regardless of physics?
  • Economics: What are my costs, and how can I manage them?

In past generations, a CIO would often manage security, data, performance and developer skills in a silo. Vendors optimized their tools around specific technology stacks. IT departments built up large investments in management tools and skills around their chosen platforms. New applications that were going into production needed to ensure that they were able to integrate cleanly into an enterprise’s security, data, monitoring, and development environments.

However, as noted above, these questions are becoming exceptionally hard to manage as security, machine, and application boundaries are becoming increasingly ambiguous. In this new world, IT departments need management tools that are enterprise infrastructure agnostic and that can keep pace with the “new normal” of application developer productivity.

This is why we love the enterprise infrastructure tools space. All of the traditional tools that have been used to manage security, data, performance and economics were focused on vertically integrated enterprise stacks—the old winner-take-all models. As a result, we see five opportunities for disruption for young companies. (You may not be surprised that they are in line with the five enterprise needs outlined above):

  • Security: Enterprises can’t keep up provisioning and security management for all the cloud-based applications that are popping up (Who has access to SalesForce.com? Who’s using that customer service tool we built on Microsoft Office 365? What cloud vendors need to be de-provisioned when an employee leaves or a department is reorganized?).
  • Data warehouses: Data proliferation is outpacing data warehousing. Access and management of data will need to be reimagined. Big data for most vendors means “bring me all your data, put it in my structure, and I will give you answers.” The reality is that this approach simply can’t keep up with the rate and variety of data creation.
  • Application performance monitoring: Enterprises need to correlate performance data, business metrics, and log data across a single application and all their applications across all of their cloud vendors. APM needs to move to the cloud and needs predictive analytics to monitor and avoid negative business impact.
  • Developer skills: There will be a rush to PAAS vendors as enterprises become increasingly fatigued with too many low-level development platforms.
  • Economics: There’s a big opportunity for someone to help enterprises manage and compare the economics of hundreds of vendors—application by application, and across the enterprise.

Oh, and by the way, we agree with IDC that this will be a $100 billion market by 2016, and we also believe that enterprises are adopting the cloud for application development. As a foot soldier in the enterprise infrastructure ground war, I saw firsthand the movement to the world of PCs. It felt exactly the same—at first PCs were unsecure, unscalable, unmanageable, then, what seemed like overnight, they were the infrastructure that business was run on. The current wave of new technology dwarfs that wave – in size, in amount of change, and in the opportunity for value. But tools will be needed to manage a world of unlimited choices.

This post originally appeared on Forbes.com.


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