View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
  2. Data
October 10, 2016updated 12 Oct 2016 11:22am

Enterprise IT is not so big – it’s spend is a little less than $1trillion

But the real question is whether it can become strategically important

By Sam

If annual global economic output is $73.8 trillion – as estimated for 2015 by the WorldBank   – then Oracle CEO Mark Hurd’s statement at a briefing in London last week is about right.

He said that IT is not so big – it is a couple of trillion dollars with half of that in consumer that has ‘grown like crazy over the last dozen years’ and the other half in enterprise IT.

Growth in Enterprise IT on the other hand has low CAGR, especially over the last couple of years when it has been ‘flatish,’ says Mr Hurd. Read the report on Mark Hurd’s views on when cloud spending will peak and whether industry consolidation will continue.

The numbers are important because it points to where the next wave of investment on the supply side is going. But on one level whether the numbers are are truly accurate is almost irrelevant.

What really matters is whether IT is important. And how important will it be to business going forward.

Digital Realty takes on Equinix with Service Exchange.

From data centre to cloud – the emphasis needs to be on the data



Content from our partners
Scan and deliver
GenAI cybersecurity: "A super-human analyst, with a brain the size of a planet."
Cloud, AI, and cyber security – highlights from DTX Manchester









Spending $1trillion for businesses to keep records, issue invoices, and generally reduce general admin costs by streamlining and digitising processes is great as it drives efficiency, helps productivity and provides the tools to accurately report data.

The slightly less than $1trillion in spend cited by Mr Hurd sounds about right. Other data says companies tend to spend between 2% and 4% of revenue on IT – so we’re probably in the right ball park.

The question going forward is whether the Enterprise IT industry spend will become bigger as a percentage of revenue generated and grow in terms of global output. To do so it must become become strategically important.

The message from inside the tent on whether this will happen is a resounding yes.

Digital transformation is driving the agenda for CEOs around the world. Digital disruption of markets is forcing established industries to change their strategies. In the commercial space digital disruption is the threats posed by either large scale ‘born on the internet’ disruptions or shoals  of nimble piranha-like agile entrants nibbling away at markets and the existing customer base by offering web type services, better value and personalised customer experience.

Data is key. This is a data revolution.

As Pure Storage EMEA CTO Alex McMullan told me, it is all about fidelity – getting at the truth.

Where is this truth coming from: Structured data being interrogated and analysed as never before. IOT data being generated at unprecedented scale. Unstructured data (mostly consumer mobile ) being shared instantaneously across more and more platforms.

At the moment the buzz is machine to machine learning and Artificial Intelligence based big data analytics. This will drive business intelligence.

So can IT become strategically important to business?

The short answer is yes.

But one of the key challenges is that inside the enterprise IT practitioners must realise that being the curators of the infrastructure on which data resides is a cul de sac. It is yesterday’s game – unless you work for Google, Amazon, Microsoft, Oracle, Facebook, Apple or Alibaba.

It is by keeping ahead of the curve on the technology developments to provide deeper understanding of the value of the data that resides inside the organisation that will allow IT to become strategic.

For the IT supply side that means cloud. Selling boxes for compute, network, and storage of data and the software to run them with no understanding of what the data is and why is it important to the business will see the IT industry facing the same issues faced by traditional telecoms whose customers are wont to say “thanks for keeping it ‘fat and flat’ but we’re paying too much for it.”

IT has no strategic future by providing massive over capacity and dumb pipes to push data from here to there.

IT must get into the data or face being pushed out of the game.

Topics in this article : , ,
Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.