Held in March in the heart of Silicon Valley, “IDC Directions” is the analyst firm’s largest annual event focused on trends in information technology (IT). GE Digital was there, taking notes…

Rising disruption: industrial platforms

Themed “Transformation Everywhere: Battles for Leadership in the 3rd Platform Era,” this session was squarely focused on software platform innovation. Entire industries are being disrupted, including underlying business models, vendor landscapes, and vendor-customer-partner relationships.  Product vendors are becoming services vendors. Customers are becoming suppliers, channel partners, or competitors.

At the core of this disruption is technical innovation in the following areas:

  1. big data/analytics
  2. cloud
  3. mobile/social
  4. IoT (Internet of Things)

According to IDC, keeping up with innovation requires a new model for software development and delivery: the “3rd Platform.” This new model is clearly differentiated from older generation platforms such as mainframe, client/server, or earlier cloud architectures. IDC also posits that a new generation of vertical-focused “industry platforms” 3rd Platforms will turn up the heat on traditional (horizontal) software platform vendors and entire industries will “Amazon-ize.” According to one IDC speaker,  “By 2018, industry platforms will disrupt on third of the top 20 market leaders in most industries.”

Big data grows up

Big data/analytics is at the core of 3rd platforms, with differentiation increasingly growing upwards to the ‘analytics’ layers of the stack – a shift indicated by where the venture capital (VC) community is increasingly investing.

The domain area is also seeing a shift: New analytics were traditionally focused on “money” (finance) and “people” (customers, employees), but increasingly the focus has shifted to “things” (machines, products, materials). In fact, the leading driver for corporate big data initiatives today is “product and service improvements and innovations” (e.g., predictive maintenance, asset and operations optimization, and demand sensing).

Technology is innovating, too, in the areas of planning (relational databases, data warehouses, in-memory engines), execution (streaming databases, complex event processes), and prediction (Hadoop, NoSQL, graph databases, schema-less databases).

Applications everywhere

With the availability of new innovation platforms, IDC expects “new killer apps” to proliferate by 10x over the next five years. Increasingly disposable and very different from the past ERP type “heavy” applications, the new “lights” apps are fast to develop, build, and deploy (and similarly easy to retire). They also will be increasingly diversified, with two thirds of new solutions specific to industries and roles, and data  intensive, with a heavy focus on the Internet of Things (IoT).

So who will build all those apps? Not your traditional developer. According to IDC, the approximately 11 million traditional “coder” developers will increasingly be complemented by “citizen” (casual) developers, growing by 3x to 8 million over the next few years. Of course, development environments need to change too, from traditional IDE’s to mash-up type composition workbenches.

Business in control

Platform decision power is shifting from IT to business leaders – at a surprising rate. Already in many organizations today, IT is no longer in charge of selecting technologies, and instead focus on implementing and supporting technology choices made by the business. IDC shared a recent research, with regard to IT projects:

  • 23% done without IT involvement (biz funded)
  • 17% with shadow IT (biz funded)
  • 21% joint biz / IT projects (biz funded)
  • 20% joint biz / IT projects (IT funded)
  • 19% IT projects (IT funded)

In summary, 61% of IT projects are already business funded.

Indexing the world’s machines

IDC confirms that a transformation is underway across industries, and a new technology platform is at the center of the change. IDC refers to this category as the 3rd platform, and GE’s software platform for the Industrial Internet, Predix™, is a leading example of this phenomenon.

IDC kicked off the session with a list of leading software vendors:

  • Index the world’s information – Google
  • Index the world’s people – Facebook
  • Index the world’s professional contacts – LinkedIn

With Predix in mind, they may soon need to add another:

  • Index the world’s machines – GE