Digitally Advanced Traditional Enterprises Are Eight Times More Likely to Grow Share by Committing to Advanced Technologies but Still Lag behind Digital Natives
New research from Bain & Company and Red Hat indicates that many
traditional companies are at an early stage in their digital journey;
leaders stand out based on their use of advanced technologies, such as
cloud computing, advanced analytics and modern app development
NEW YORK & RALEIGH, N.C.--(BUSINESS WIRE)--
Bain & Company and Red Hat (NYSE: RHT), the world's leading provider of
open source solutions,today released the results of joint
research aimed at determining how deeply enterprises are committed to
digital transformation and the benefits these enterprises are seeing.
The research report, For
Traditional Enterprises, the Path to Digital and the Role of Containers,
surveyed nearly 450 U.S. executives, IT leaders and IT personnel across
industries and found that businesses that recognize the potential for
digital disruption are looking to new digital technologies - such as
cloud computing and modern app development - to increase agility and
deliver new services to customers while reducing costs. Yet, strategies
and investments in digital transformation are still in their earliest
stages.
This Smart News Release features multimedia. View the full release here:
http://www.businesswire.com/news/home/20161201005729/en/
For those survey respondents that have invested in digital, the
technology and business results are compelling. Bain and Red Hat’s
research demonstrates that those using new technologies to digitally
transform their business experienced:
- Increased market share. These enterprises are eight times more
likely to have grown their market share, compared to those in the
earliest stages of digital transformation.
- Delivery of better products in a more timely fashion through
increased adoption of emerging technologies - as much as three times
faster than those in the earlier stages of digital transformation.
- More streamlined development processes, more flexible
infrastructure, faster time to market and reduced costs by using
containers for application development.
Despite the hype, however, even the most advanced traditional
enterprises surveyed still score well below start-ups and emerging
enterprises that have embraced new technologies from inception (digital
natives). According to the survey results, nearly 80 percent of
traditional enterprises score below 65 on a 100-point scale that
assesses how these organizations believe they are aligning digital
technologies to achieve business outcomes. Ultimately, the report
reveals that the degree of progress among respondents moving towards
digital transformation varies widely, driven in part by business
contexts, actual IT needs and overall attitudes towards technology. It
also uncovers some common themes in the research.
For example, Bain and Red Hat found that while 63 percent of enterprises
surveyed have built processes to respond to digital trends, only 19
percent see rapid innovation as a priority. Additionally, for
approximately 65 percent of survey respondents, the primary motivation
driving their digital efforts is moves made by their competition,
highlighting a highly reactive approach to digital transformation.
“We see many traditional enterprise companies still trailing on measures
of digital maturity, even among the most advanced firms,” said Jeff
Taylor, a partner in Bain’s Technology Practice and co-author of the
report. “As we took a deeper look at these companies surveyed, we saw
that those advancing further and faster on the adoption curve treat
digital as more than just a singular function or activity. They view it
as a comprehensive, cross-functional transformation, implementing
changes across their leadership, organization, product development
approach and processes, IT strategy and investments, data governance and
tools, etc. Building sufficient digital capabilities that will generate
the desired results is not a straightforward journey. Success requires a
sustained multi-year focus.”
As companies progress on their digital adoption journey, they typically
invest in increasingly more sophisticated capabilities in support of
their technology and business goals. The use of modern application and
deployment platforms represents the next wave of digital maturity and is
proving to be key in helping companies address their legacy applications
and infrastructure.
Containers are one of the most high-profile of these development
platforms and a technology that is helping to drive digital
transformation within the enterprise. Containers are self-contained
environments that allow users to package and isolate applications with
their entire runtime dependencies - all of the files necessary to run on
clustered, scale-out infrastructure. These capabilities make containers
portable across many different environments, including public and
private clouds.
In the course of their research, Bain and Red Hat found that enterprises
using containers are beginning to realize material architectural
benefits. Based on the analysis of survey respondents, initial container
adopters could realize a 15 to 30 percent reduction in development
times, and additional infrastructure flexibility gains driven by the
portability benefits of containers. The results of the survey also found
cost savings of five to 15 percent from hardware productivity are
possible.
“Containers are on track to play an important role in not only
application development for highly automated, scale-out platforms, but
also in helping to drive the modern enterprise forward on their journey
towards digital transformation. While most survey respondents - about 80
percent - are currently using containers primarily for web apps, we
expect to see this start to shift to include more mission-critical
workloads,” said Tim Yeaton, senior vice president, Infrastructure
Business Group, Red Hat. “In that time, we anticipate a growing set of
more ‘traditional’ workloads will be prioritized for containerization,
including custom applications, databases and business intelligence.”
The proportion of respondents selectively or broadly adopting container
technology tied to benefits and complementary trends is expected to grow
across all application lifecycle phases - from about 20 percent
currently to upwards of 40 percent over the next three years.
While the opportunities created by these emerging technologies are
compelling, the speed and path of adoption for containers is somewhat
less apparent, according to the Bain and Red Hat report. The biggest
hurdles standing in the way of widespread container use according to
respondents are common among early stage technologies - lack of
familiarity, talent gaps, hesitation to move from existing technology
and immature ecosystems - and can often be overcome in time. Vendors are
making progress to address more container-specific challenges, such as
management tools, applicability across workloads, security and
persistent storage, indicating decreasing barriers to adoption.
For more details, read the full report: For
Traditional Enterprises, the Path to Digital and the Role of Containers.
Methodology
Bain and Red Hat conducted a survey of 449 respondents, broken out
across senior executives, senior IT decision-makers and IT
development/operations personnel, with the latter primarily addressing
specific questions related to containers. The survey focused on
traditional enterprise in the US, and captured a representative
distribution of industries and company sizes.
About Bain & Company
Bain & Company is the management consulting firm that the world's
business leaders come to when they want results. Bain advises clients on
strategy, operations, technology, organization, private equity and
mergers and acquisition, developing practical insights that clients act
on and transferring skills that make change stick. The firm aligns its
incentives with clients by linking its fees to their results. Bain
clients have outperformed the stock market 4 to 1. Founded in 1973, Bain
has 53 offices in 34 countries, and its deep expertise and client roster
cross every industry and economic sector. For more information visit: www.bain.com.
Follow us on Twitter @BainAlerts.
About Red Hat, Inc.
Red Hat is the world's leading provider of open source software
solutions, using a community-powered approach to provide reliable and
high-performing cloud, Linux, middleware, storage and virtualization
technologies. Red Hat also offers award-winning support, training, and
consulting services. As a connective hub in a global network of
enterprises, partners, and open source communities, Red Hat helps create
relevant, innovative technologies that liberate resources for growth and
prepare customers for the future of IT. Learn more at http://www.redhat.com.
Connect with Red Hat
Red Hat’s Forward-Looking Statements
Certain statements contained in this press release may constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements
provide current expectations of future events based on certain
assumptions and include any statement that does not directly relate to
any historical or current fact. Actual results may differ materially
from those indicated by such forward-looking statements as a result of
various important factors, including: risks related to the ability of
the Company to compete effectively; the ability to deliver and stimulate
demand for new products and technological innovations on a timely basis;
delays or reductions in information technology spending; the integration
of acquisitions and the ability to market successfully acquired
technologies and products; fluctuations in exchange rates; the effects
of industry consolidation; uncertainty and adverse results in litigation
and related settlements; the inability to adequately protect Company
intellectual property and the potential for infringement or breach of
license claims of or relating to third party intellectual property;
risks related to data and information security vulnerabilities; the
ability to meet financial and operational challenges encountered in our
international operations; ineffective management of, and control over,
the Company's growth and international operations; and changes in and a
dependence on key personnel, as well as other factors contained in our
most recent Quarterly Report on Form 10-Q (copies of which may be
accessed through the Securities and Exchange Commission's website at http://www.sec.gov),
including those found therein under the captions "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results
of Operations." In addition to these factors, actual future performance,
outcomes, and results may differ materially because of more general
factors including (without limitation) general industry and market
conditions and growth rates, economic and political conditions,
governmental and public policy changes and the impact of natural
disasters such as earthquakes and floods. The forward-looking statements
included in this press release represent the Company's views as of the
date of this press release and these views could change. However, while
the Company may elect to update these forward-looking statements at some
point in the future, the Company specifically disclaims any obligation
to do so. These forward-looking statements should not be relied upon as
representing the Company's views as of any date subsequent to the date
of this press release.
Red Hat and the Shadowman logo are trademarks or registered
trademarks of Red Hat, Inc. or its subsidiaries in the U.S. and other
countries. Linux® is the registered trademark of Linus Torvalds in the
U.S. and other countries.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161201005729/en/
Bain & Company
Dan Pinkney, +1 646-562-8102
dan.pinkney@bain.com
or
Red
Hat, Inc.
John Terrill, +1 571-421-8132
jterrill@redhat.com
Source: Red Hat, Inc. and Bain & Company