At Amalgam Insights, we have been focused on the key 2018 trends that will change our ability to manage technology at scale. In Part 1 of this series, Tom Petrocelli provided his key Developer Operations and enterprise collaboration predictions for 2018 in mid-December. In part two, , Todd Maddox provided 5 key predictions that will shape enterprise learning in 2018. In the third and final set of predictions, I’m taking on key themes of cloud, mobility, telecom, and data management that will challenge IT in terms of management at scale.
- Cloud IaaS and SaaS Spend under formal management will double in 2018, but the total spend under formalized management still be under 25% of total business spend.
- The number of cellular-connected IoT devices will double to over one billion between now and 2020.
- Technology Lifecycle Management will start to emerge as a complex spend management strategy for medium and large enterprises.
- Ethical AI will emerge as a key practice for AI Governance.
Key IT Management Predictions for 2018
1) Cloud IaaS and SaaS Spend under formal management will double in 2018, but the total spend under formalized management still be under 25% of total business spend. Based on a combination of vendor estimates and reported spend under management, Amalgam estimates that less than $15 billion in Cloud SaaS and IaaS subscriptions are currently being monitored and optimized on a monthly basis by tools that can effectively manage multiple vendors. From a practical perspective, Amalgam believes this means that about $85 billion in cloud spend is currently being under-managed leading to leakage of approximately $25 billion in global cloud spend.
Up until this point, this spend leakage has fallen under the radar of companies that decided that these costs simply didn’t matter or were the “cost of being innovative.” But companies that accept that cloud computing is a core part of their operations now need to also accept that cloud cost management is a core part of their sourcing and financial management responsibilities. Between increased IT and financial visibility to this issue and improved vendor software and service solutions to manage cloud spend, 2018 will be a fundamental opportunity for companies to gain financial control over the cloud.
2) The number of cellular-connected IoT devices will double to over one billion between now and 2020.
From a telecom expense perspective, the most important trend in IoT is tracking the number of devices with a cellular component, as those are the ones requiring ongoing data plan and carrier support.
A variety of analyst and industry sources estimate that we crossed the 500 million cellular IoT subscriber mark in 2017 and that we are adding approximately 200 million IoT devices per year.
Amalgam posits that analyst firms are struggling to measure the demand for IoT because celluar IoT demand is increasing quickly as an emerging technology across automotive, utilities, manufacturing, and physical security use cases. Based on the number of 6-figure corporate IoT device deployments that Amalgam has run into, the increased demand for proactive and real-time support, and the emergence of artificial intelligence as both a new analytic and interface tool for data, Amalgam Insights believes that this combination of business drivers will lead to cellular IoT adoption that exceeds current market estimates and reaching the billion cellular IoT connection mark one-to-two years earlier than predicted by other sources.
This trend will require enterprise organizations to rethink their mobility management strategies as cellular IoT endpoints eclipse cell phones as a management challenge across staging, kitting, sourcing, procurement, logistics, security, and a fully closed-loop supply chain.
3) Technology Lifecycle Management will start to emerge as a complex spend management strategy for medium and large enterprises.
Technology Lifecycle Management is the practice of supporting all employee technologies through a single view, including end-user computing, telecom, network, Software as a Service, and Infrastructure as a Service. With SaaS and IaaS emerging as $50 billion+ markets, these cloud services have reached the same scale that enterprise mobility reached when they started to get IT’s attention. IT is being forced to simultaneously inherit mobility, Internet of Things, SaaS, and IaaS spend that were all started by line-of-business or project-based initiatives and have evolved to require enterprise governance, spend management, and inventory management. To keep up, IT must adopt a hybrid framework that effectively charges back assets, services, and usage costs while enforcing negotiated contracts, which Amalgam refers to as Technology Lifecycle Management. In general, as new spend categories reach $100,000/month, Amalgam recommends that these categories should be incorporated into a formal TLM program with dedicated personnel, services, and/or software.
4) Ethical AI will emerge as a key practice for AI Governance
In 2018, we will see the emergence of more codified Ethical AI where the fundamental question will shift from “Can we do this?” to “Should we do this?” with the understanding that just because technology can affect rapid wide-ranging societal change does not mean that it should be allowed to do so without review, analysis, and consequences. This change will be aided by the creation of AI ethics institutes both internal to large AI departments and attached to leading third-party research institutions.
With the emergence of AI as a mainstream technology that has already served as the foundation for the current wave of technological growth and had wide-ranging effects on commerce, politics, and the fundamental distribution of information, the need for AI governance has become increasingly necessary from a corporate and societal perspective. However, until AI reached the critical mass and visibility that occurred in 2017, this governance was previously relegated to the technical governance of “is this possible” and “is the data accessible?” Amalgam is currently working on an initial framework for AI Governance that is somewhere between the bland suggestions to “create a Center of Excellence” and an overly academic approach to “compare Hegelian and Kantian discursive on the nature of cognition.” On January 30th, Amalgam will be sharing our view of ethical data, analytics, and AI on a free BrightTALK webinar Developing Ethical IT in Your Organization
If you have any questions about any of these predictions and how they impact your IT organization, please contact us at firstname.lastname@example.org. And if you liked these predictions, please share below on Twitter, LinkedIn, and Facebook!