Forrester’s 2019 prediction report that the coming year will see organizations shift from implementing ambitious, enterprise-wide digital transformation efforts to a pragmatic, surgical approach. According to Forrester, this is primarily the result of 50% of digital transformation efforts stalling throughout 2018.
The report cites several principal causes of digital transformation problems:
- Underestimating the work required
- A need for new back-office technology
- A lack of cohesion between both internal teams and internal and third-party partners
The Way Forward: Embracing a Digital Ecosystem
At Hanu, we’ve found that the way to overcome these barriers to driving business outcomes through digital transformation is to understand and adopt the concept of a digital ecosystem.
A digital ecosystem is the connection of people, processes, companies, data and things that share the use of digital platforms. The idea is to create a flexible ecosystem of platforms and services that come together to adapt to the needs of the business.
What a Successful Digital Ecosystem Looks Like
A perfect example of a digital ecosystem making waves today is Spotify. With over 100 million users, Spotify has changed the entire music industry. They provide an attractive service for music listeners as well as a new revenue model for musicians and record labels. Spotify also uses emerging technology to create new value propositions for their users. This is seen in the use of machine learning to track user behavior and listening habits to create custom playlists and suggested artists.
Another example of digital ecosystems in action is GM’s $500 million investment in ridesharing platform Lyft. The wealth of data and business insights gathered and shared creates immediate value for both companies and the potential for them to extend their reach into new markets.
Digital ecosystems aren’t just for unicorn startup apps and multibillion-dollar auto manufacturers. Any organization can implement these principles to drive business outcomes – provided they understand how to implement the right IT infrastructure.
Digital Ecosystems are Built on Platforms
A hallmark of digital ecosystems is their ability to run on third-party platforms. Digital ecosystems are seen as a welcome contrast to the rigid architectures and business processes that dominated IT until the early 2010’s. They’re built on cloud-enabled digital platforms such as the Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS), provided by services like Microsoft Azure and AWS. Distributed networks such as these are required for businesses to leverage technologies like Internet of Things (IoT), machine learning and AI, digital twins and blockchain for business outcomes.
To succeed on these cloud-based digital platforms, there are three primary technologies that companies need to adopt: containers, microservices, and serverless computing.
Containers and Microservices
An approach to application development, microservices involve building apps out of many self-contained, modular “microservices.” These loosely-tethered microservices can be moved between application workloads with ease and used for new or unrelated projects, enabling organizations to not only support a large number of platforms but to introduce radical agility into their DevOps and app/dev strategies.
Containerization is the method by which microservices are organized and distributed. Rather than host entire applications on one centralized machine, businesses host resource-isolated containerized environments on a virtualized operating system. These containers can then be mixed-and-matched to optimize network efficiency, increasing control over resource allocation and scaling. It also provides more flexibility in connecting to third-parties, as containers can be moved between platforms with the touch of a button. This is in contrast to traditional application hosting in the cloud, which often requires applications to be entirely re-built for new platforms.
Serverless Computing
Serverless computing is when a Cloud Service Provider (CSP) completely manages applications and distributes resources for businesses as needed, instead of charging for dedicated capacity and servers. This involves virtualizing runtime and operational management, which enables the third-party to manage servers, databases, and application logic functions that are typically administered by internal developers. This is seen by some as the next evolution of IaaS.
Serverless computing lets businesses reallocate development resources away from infrastructure administration. This saves overhead costs while allowing developers to focus on innovation, without the need for them to worry about maintenance and support.
When serverless computing, containerization and microservices are combined, the result is extreme agility for your DevOps team, flexibility in adopting new technology and platforms, and the ability to scale at whatever rate your business needs.
Closing Thoughts
A thriving digital ecosystem touches your entire organization, bridging the gap between traditional industries and emerging technology. It enables new partnerships which, when leveraged correctly, create the business growth digital transformation evangelists have been promising for nearly a decade.
Want help building your digital ecosystem in the Microsoft Azure cloud? Contact the experts at Hanu today for a free consultation.
And if you want to learn more about technology that is driving growth in digital ecosystems, check out our series on artificial intelligence and machine learning, and our series on Internet of Things.
