2016 was another unpredictable year in IT, with Microsoft rediscovering its mojo as an innovator, and widespread political changes influencing our sector. Here’s my personal view of some of the more noteworthy trends.
Microsoft the innovator
For me, when I look back on 2016, one of the most significant changes was that Microsoft has really gone back to its roots as a software developer. Their new CEO, Satya Nadella, is a developer, and with him driving the changes, it seems to be at the top of its game, and catching up in many areas.
A prime example is the Surface Studio, and its Surface Dial interface. With this, Microsoft is innovating and developing their own hardware that could attack the Mac market, to complement their core focus on software. I think a lot of former Mac users may well buy a Surface Studio to run Photoshop, particularly as they can use it well with a pen.
Previously, Microsoft might have been a little complacent with Office, but as Google and open-source alternatives have become credible, Microsoft has had to respond. It’s also becoming more flexible in its approach to open platforms and working with the likes of Linux and Docker.
Office365’s subscription model has been a success – users like being able to install it on multiple machines, and lots of people I speak to are using it. It’s meaning that a lot of users can now easily get access to the applications they need, which provides an alternative to Citrix’s application delivery approach. Citrix is also now starting to become the remote app of choice for Azure.
Overall, vendors such as Microsoft are driving revenues through applications and services, rather than hardware as they have done traditionally. That focus is changing more and more.
Cloud adoption still gradual
In cloud, Microsoft is providing Azure Stack, an on-premise version of Azure, which is being used to bridge internal IT systems with the cloud. This is giving Microsoft a boost in its attempt to catch up with AWS, which doesn’t provide on-premise services.
Overall, while we’re seeing a lot of people running their email or backup in the cloud, they’re still only really dipping their toes in cloud, and not trusting it for everything. There’s not many companies running a fully cloud system, and a more common approach is a hybrid, best-of-both-worlds solution that keeps some systems on-premise, such as ERP and databases.
With more powerful on-premise systems and the increased functionality through hyper-converged infrastructure solutions such as Nutanix, there is a shift towards people adopting this hybrid approach, and bursting out services into the cloud to take care of variable workloads, with core business systems then managed on-premise. Cloud provides the invaluable flexibility of burstable infrastructure to handle peaks and troughs in demand.
A changing political world
At the end of 2016, we’ve started to see concern about Microsoft’s planned 22% price rises for cloud services, which have been a response to the weaker value of the pound following June’s EU referendum.
Overall, the shifting Sterling/dollar exchange rates have a massive effect on the IT industry, with many major suppliers and cloud providers adjusting their prices upwards.
With Brexit coming up, some companies, such as banks, are moving their data centres into different countries to ensure their data is in the right place. Companies are managing their risk, by taking careful decisions where the future is uncertain.
Another trend we’ve seen in 2016 is consolidation amongst distributors, as hardware margins are shrinking year on year. All of are buying service capabilities to protect themselves and stay relevant in the market, and distribution is shifting to other revenue based models as traditional IT shifts to the cloud.
For end customers, the decrease in competition could mean price reductions become harder to come by, with some predictions that there will eventually only be two distributors in the UK.
There has also been steady consolidation amongst vendors, such as Dell snapping up VMware. While VMware had tried to open their own data centres, they’d struggled to compete, so it makes sense they’re now working with AWS to help meet end users’ needs.
As solutions architects, my colleagues and I find that we tend to be exposed to a greater portfolio of IT product offerings, due to dealing with multiple businesses. This means we can go out and speak to customers, and give them the information they need to make informed decisions.
Looking back, this year has seen an almost unprecedented number of unexpected developments. To name just one, who would have thought that Microsoft would buy LinkedIn? The acquisition shows that data mining and analytics are highly valuable to companies, for example to help with marketing, targeting customers and evaluating trends.
With such a rate of change, it’s almost impossible to keep up. If you look five years back it was easier to keep track of new developments, but the acceleration in the last two years has been massive, and in the future IT will continue to evolve to help solve business challenges. But, of course, that’s what makes our jobs in IT so interesting – I wouldn’t have it any other way.