3. Why Digital Transformation?
Standardization
of Infrastructure
Social Data,
Mobile Data
Interconnection
of Systems
Decision
Support
Real Time
Analytics
IoT and
Other Data
Intellectual
Property
Source: IDC Developer Research, December 2016
5. DX Supply, Demand Pressures Diverge
Buyer Side Pressures/Challenges Vendor Pressures/Challenges
New competitors emerging and disrupting business
as usual
New startups don’t buy IT, don’t buy software; instead
are writing their code and running it in cloud from day
1
Legacy IT still must be supported, and will remain a
burden for the foreseeable future
Legacy IT will continue to be a cash cow, but that
cash will be needed to help fund a transition to 3rd
Platform compute
Cutting edge talent is hard to find and retain Cutting edge talent is hard to find and retain for
vendors, too
On-premises IT investments are becoming more
difficult to justify
Generic cloud hosting services is ultimately a race to
zero. The value add comes from software services
Technologies emerging faster than can be
understood, implemented, and provide a ROI
New technologies emerge, but often today are open
source based and provide little revenue opportunity
Installed apps generally tied to their host; new apps
typically have few or no dependencies
Operating systems losing their differentiation; Linux
and Windows increasingly close; Linux distro
differences fading
Source: IDC System Software Research, December 2016
8. Open Source Software Inherits the Earth
0
5,000
10,000
15,000
Worldwide Operating Environments Nonpaid and
Paid New License Shipments, Subscriptions and
Nonpaid Deployments (000)
Others
Linux (Paid)
Linux (Nonpaid)
Windows (Paid+Nonpaid)
Linux fought a long battle
to open the door
Open source crossed a
midpoint and is becoming
relevant or dominant in
many market segments
“Open source first” is
increasingly the approach
that users and vendors
Even Microsoft is favorable
to open source today
Source: IDC System Software Research, December 2016
10. Applications Become the Pivot Point
Linux apps stay on Linux
Windows apps stay on Windows
• Starting points dictate
end points
• Apps divide into “legacy”
& “cloud-native” apps
• Could native apps will
emerge as the new
battleground
• Cloud Native and open
source are tightly
intertwined
IaaS Deployment
Containerized
Lift-and-Shift
Replaced with
Cloud Native Apps
Source: IDC Developer Research, December 2016
12. Impact on You and Your IT
Apps
Middleware
Infr SW
Hardware
Storage NW
Apps
Hardware
Open Source
Apps Container
PaaS SaaS
Container
Adoption Continuum
• Open source
• Linux and
Containers
• Cost, service levels
vs. availability
• Pay-as-you-go
• Mobility
• Serverless
computing
Service Provider
Source: IDC Developer Research, December 2016
Standardization has been happening for a long time
First x86 hardware
Second, operating systems
Third: infrastructure layered software
Today: containers and runtimes
Everything interconnected
IP – Software in things
Industry Clouds
Health
Retail
Financial
Government
Energy
Accelerators
Security
AR/VR
IoT
Cognitive
Robotics
3D Printing
Light Blue = orgs are purchasing more of these
Dark Blue = orgs purchasing less of these products
Orchestration, automation, analytics, performance management all on the “purchase more” side
XaaS purchase more
Inhourse resources, testing tools purchasing LESS
Thousands of operating environment new license shipments, subscriptions and nonpaid deployments
Explain colors in chart what the segments are
Open Source ramping up in share
Open source… commercial vendor supported products win in enterprises
Proprietary products least favorable
Starting points dictate end points
VMware unlikely to migrate Windows apps off Windows
Apps divide into “legacy-” and “cloud-native” apps
Most apps will eventually move to cloud, live forever
Few become true cloud applications
Even fewer need to
Expect a lot of “lift and shift” where existing apps
CNAs the new battleground
Expect consolidation in CNA space
Open source SW helped insulate applications from the underlying infrastructure
Linux + containers helps create application mobility cross-server, cross-platform, cross-cloud
“Hardware” (AKA compute services) increasingly measured by frameworks offered, service levels, scalability, availability, bandwidth, and cost/instance
Pay-as-you-go (“subscription” or “as a service”) becomes the default purchase model going forward
Serverless computing is a logical evolution of PaaS, and promises to drive a new generation of applications