Gartner: Digital Business and IoT to Drive Investments

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Growth in digital business and the Internet of Things (IoT) is expected to drive significant investments in IT operations management (ITOM) through 2020, according to Gartner, Inc. Lower Cost of Ownership.

“As acceptance of OSS ITOM grows in popularity, traditional closed-source ITOM software still has the largest budget allocation today. In addition, the complexity and governance issues faced by users of OSS ITOM tools cannot be ignored. In fact, these issues open up opportunities for ITOM. Even vendors who are behind the market with ITOM functionality can compete in this area, ”said Laurie Wurster, research director at Gartner.

Gartner believes many companies will turn to Managed ITOM or ITOM as a Service (ITOMaaS) enabled by open source technologies and provided by a third party. With OSS, vendors can deliver more cost-effective and easily available ITOM functions in a scalable manner through the cloud.

By 2020, public cloud and managed services are expected to be leveraged more often for ITOM tools, which will drive the growth of the subscription business model for cloud and on-premises ITOM. However, on-premises deployments will remain the most common delivery method. This imposes multiple challenges on the ITOM providers in place. First, vendors who do not offer a cloud delivery model will face continued cannibalization from ITOM vendors who can deliver ITOM both in the cloud and on-premises.

Second, platform providers, such as Microsoft Azure and Amazon Web Services (AWS), provide some native ITOM functionality on their public clouds. Customers who run workloads only on these platforms may prefer these native features. There are also “hybrid” requirements for ITOM tools that can seamlessly manage cloud and on-premises environments.

The future of cloud and OSS services for ITOM

“Customer demand has driven traditional software vendors to transform and adapt to changing technology and competitive landscapes. The competitive pressure of the cloud (SaaS offers) and commercial free software (offers with a free license and paid support) is forcing ITOM providers to move towards subscription. business models based on cloud and on-premises deployments, ”said Matthew Cheung, research director at Gartner. “This change will eliminate peaks in revenue growth, as the large initial investment seen in traditional models is spread over time in a repeatable revenue stream.”

The influx of new, smaller ITOM vendors focused on one or two major tool categories will continue to disrupt large traditional suite vendors. Given this situation, traditional suppliers will have to respond by changing the way their products fit together. More importantly, traditional vendors need to change the way their solutions are sold as there is significant pressure from customers to switch to offering cloud-based services.

Gartner customers can learn more in the report “Market Trends: Delivering Competitive ITOM by Integrating Open Source and Cloud Services”.

Gartner analysts will provide additional analysis on data center and IT operations trends at the Gartner IT Infrastructure, Operations Management and Data Center Conference, November 27-28 in London and November 4 through December 7 in Las Vegas.

Gartner, Inc. is the global leader in research and consulting. The company helps business leaders in all major functions across all industries and all sizes of business with the objective information they need to make the right decisions. Gartner’s comprehensive suite of services provides strategic advice and proven best practices to help customers succeed on their critical priorities. Gartner is headquartered in Stamford, Connecticut, United States, and has more than 13,000 associates serving customers in 11,000 companies in 100 countries. – SG


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