This article was originally published on Technology.Info.
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“Every business is now a software business” - or some variation on that theme - is fast becoming an official mantra of the DevOps faithful. But what, if anything, does it mean to business executives at large enterprises? Do they understand this trend’s implications for their own business? Are they ready for the ‘app economy’?
Recently, CA Technologies set out to find answers to these questions, commissioning research company Vanson Bourne to interview 1,425 IT and line-of-business executives at organisations worldwide. Of these, 129 were based in the UK.
The resulting report, ‘
’, published in September, is intended to shed some light on the pressure that having to build innovative apps imposes on companies and how they’re bearing up under the strain.
As the reportputs it, “Yesterday’s enterprise is becoming tomorrow’s software-driven business.” As evidence for this, it presents forecasts from the research arm of conference organiser AppNation, which places the size of the app economy in 2014 at around $151 billion, and from the European Union, which suggests that applications will support 5 million jobs across the EU by 2018.
That’s all pretty tricky to verify, but the responses to CA Technologies’ survey suggests the pressures being felt are real enough. Half of respondents said that they already see significant impact of the app economy on their industry. Forty-four percent, meanwhile, say they see significant impact on their own organisation.
“What struck us most is that there are a lot of companies out there that are simply not geared up to take advantage of the app economy in particular and mobility in general,” said Bjarne Rasmussen, chief technology officer and senior vice president for Europe at CA Technologies, in an exclusive interview with Technology.info.
“It was a surprise to see how many companies haven’t yet embarked on that journey, or do not have executive leadership thinking about this issue and giving their backing to projects in their companies,” he continued. “But what we can clearly see is that those companies that don’t have a clear view on how they want to get started, how they want to assign resources, and how they’ll deal with security issues are also lagging behind on revenue growth, on profits and on market reach.”
In the survey, those participating organisations defined as ‘Leaders’ (as opposed to ‘Laggards’) are achieving more than double the revenue growth, 68 percent higher profit growth and have 50 percent more business coming from new products and services - a key indicator, says Rasmussen, of innovation and likely future success. Of the overall survey base, these Leaders accounted for 24 percent of respondents. Laggards accounted for 16 percent with the remaining 60 percent lying somewhere between the two poles.
The survey also makes a strong case that DevOps needs to become a best practice in organisations that wish to succeed in the app economy. With a view to accelerating delivery of proven, high-quality applications, almost half (49 percent) of the Leaders have adopted DevOps, compared to only 6 percent of the Laggards. And Leaders have, on average, developed four or more customer-facing application, while the Laggards have developed three or fewer.
But companies are not about address their shortcomings by outsourcing app development to specialist third-party partners; in fact, the survey shows that fewer are taking that approach today than four years ago, with the proportion dropping to 33 percent from 44 percent over that period.
Why does Rasmussen think that is? To some extent, it’s a question of integration, he says: “An app is just a front-end to an end-to-end process that reaches back into back-end systems and core processes. It involves and touches the DNA of the company. Some business flows might need to be reconsidered, even redesigned to make them a good fit with a mobile app approach - that’s not something you give away to a third party, no matter how much you trust them,” he said.
But above all, app development is simply too strategic now. “These are key channels for interactions with customers and employees. If a company doesn’t get a good handle on application development, it will quickly lose competitive advantage.”