20 June 2017

Survival strategy for the digital age

(This article was first published in the May 2017 edition of the ARN magazine)

To survive in the digital age, companies must adopt an ecosystem-based business model

The advancement of technology is delivering a myriad of new capabilities for organisations, as traditional business models are being bypassed in favour of more flexible, interconnected ecosystems of complementary services.

This shift is as much of a challenging for CIOs as it is an enabler to future-proof their business. By releasing their organisation from a linear value-chain, where they work with established partners and add incremental value, to being part of a more agile, heterogenous network, they gain a true competitive edge and the opportunity to expand exponentially.

IT evolves from utility to creative force

The shrinking cost of compute power and innovative, start-up-friendly business environments is accelerating the release of game-changing new technology, requiring IT strategy to be aligned with business outcomes, and capabilities to be drawn from external systems.

Public and private clouds, infrastructure as-a-service, and the apps driving the sharing economy, can now be rapidly provisioned and operated with minimal effort by the end-user. Access to powerful new business tools and the ‘network effect’ that comes from a platform of interconnected users, is shaping not only the next generation of products and services organisations are able to deliver, but the unique experience they offer their customers.

“By releasing their organisation from a linear value-chain, where they work with established partners and add incremental value, to being part of a more agile, heterogenous network, they gain a true competitive edge and the opportunity to expand exponentially.”

Gartner recently identified five key pillars for businesses to reinvent their business operations and build a successful digital foundation: information systems, customer experience, analytics and intelligence, the Internet of Things (IoT) and ecosystems. When these elements are working in sync they have a powerful effect on productivity.

For example, IDC predicts that by 2020, for every dollar Salesforce makes in Australia, the company's ecosystem of customers and partners will generate more than four dollars by building applications and services on top of the Salesforce platform.

What’s a digital ecosystem?

Gartner defines a digital ecosystem as an interdependent group of actors (enterprises, people, things) sharing standardised digital platforms to achieve a mutually beneficial purpose.

A digital ecosystem allows businesses to rapidly extend their reach with scalable connectivity to any number of specialised service providers. By collaborating in this way, businesses can achieve shared objectives more quickly, and develop new products or services of a quality impossible without shared expertise and resources.

Any business can tap into a digital ecosystem, but if it is to succeed, it needs the ability to acquire, store, access and transmit huge volumes of data, and integrate a range of services and networks, while maximising security and performance.

“Today, colocation has become a critical resource for building partnerships by enabling dynamic collaboration through flexible interconnections, in a single, secure location.”

Challenges also lie in the amount of redundancy required at all levels – from the physical data centre to the network to the application layer and the supporting layer for cloud infrastructure – which leads to an increase in auditing and compliance, service level agreements and other relevant checks and balances.

Modern businesses need IT infrastructure that can scale and adopt new elements rapidly, and a more agile and complex communications network than what many are presently using. Today, colocation has become a critical resource for building partnerships by enabling dynamic collaboration through flexible interconnections, in a single, secure location.

Harness the power of the data centre

Whatever platform or cloud is being used, as worldwide data flows increase and businesses’ online presence becomes ever more critical, it will be reliant on expanding volumes of bandwidth and a secure, resilient hosting location.

Colocation is a critical component of many organisations’ IT strategies because it can guarantee uptime for key infrastructure, and act as a hub for cloud access and interconnection with the many existing services in its internal ecosystem – which otherwise would be far more complex and costly when run in a customer-owned IT model.

The market is also becoming increasingly intricate: the management and operation of a hybrid compute strategy requires a broad range of expertise to help CIOs shape and implement their strategy for the years to come. These elements include application development, multi-system integration, the IoT and data analytics, through to managing everything from legacy to leading-edge technology for infrastructure, networking and security.

Organisations on the journey to a functioning, resilient ecosystem business model, incorporating a complex array of colocation and private and/or public cloud, can often find all they need inside the one facility. Colocation data centres can encompass an organisation’s entire ‘digital core’ – including carrier networks, access to multiple private and public clouds, as well as a choice of compute, storage, and back-up service.

Safety in numbers

By choosing to host within a colocation data centre, businesses gain access to an ecosystem of providers through fast, efficient and secure connectivity. If they own their own data centre, they don’t get the same benefits of choice and agility or the potential for innovation.

At the same time, providers with a presence in the data centre can begin developing partnerships with other businesses to help cover the broad array of hybrid IT skills their customers are demanding. As complexity increases, it’s becoming harder for one partner to deliver all their customers’ IT needs, and complementary partnerships will cover areas outside of an organisation’s core competencies.

“Organisations on the journey to a functioning, resilient ecosystem business model, incorporating a complex array of colocation and private and/or public cloud, can often find all they need inside the one facility.”

Adopting an ecosystem strategy requires a new way of doing business. IT leaders will need to actively form partnerships or alliances with vendors and service providers to really understand and evaluate how the technology can be used.

By using specialised services from the ecosystem to support different capabilities – for example, mobile, search engine, CRM, or online payments – CIOs can scale their operations to fulfil spikes in demand, and draw on outsourced expertise as new, disruptive IT is introduced.

Rise to the challenge

To adapt their complex business-technology architecture to function in a world of ecosystems, CIOs need to find a way to monitor, select and introduce the latest third-party technologies, while ensuring their team can manage the security issues inherent in an evolving suite of IT products and services.

However, by delivering a customised ecosystem that supports changing business requirements, they can also ensure privacy, security and compliance needs are met, and provide many other components of the hybrid world.

Ultimately, this all contributes to the massive growth and overall value the data centre delivers customers. With this growth comes an unparalleled opportunity for CIOs to navigate the landscape of services and drive a new IT strategy that will support their organisation through oncoming waves of digital disruption.