Technology Pulse Report - April 2017

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Technology Pulse Report - April 2017

Executive Summary

Continuing our discussion of Digital Transformation, we explore the challenge of starting such a transformation and the related risks of introducing new technology while you still have to maintain the old. Turns out that’s harder than we think and it adds a lot of risk to an already risky undertaking. But there’s no stopping the move to the Cloud (which is an admittedly simplistic way of discussing the replacement of older technology with newer technologies). Last month we introduced the technology leadership perspectives of Operate, Innovate and Secure. This month we focus on Operate - the traditional domain of the CIO.

In our recurring review of Risk trends we saw Insider and Privilege Misuse jump from #8 to enter the top five at #5. Who knew the enemy was so close?

Finally, we review the top 10 Innovation trends from our technology management radar, the gradual slip of blockchain out of the top 10, and we introduce a few new technologies that will vie for attention in next month’s radar.

These are among the key findings from Fortium Partners’ April Technology Pulse survey, a brief but long-term study of the essential financial, risk and innovation trends among the world’s foremost technology leaders.

The Technology Pulse survey includes a brief series of information-dense questions to C-level technology strategists who deliver answers according to the current state of their business. The three key categories - Financial, Risk and Innovation - have the greatest long-term impact on the success of the application and management of technology in business. Business leaders globally can gain valuable insights into the behaviors and drivers of CIO, CTO and CISO behavior in the existing and near-term market.

Technology Leadership-as-a-Service - Operate

In the March 2017 issue of the Technology Pulse report, we shared our findings on the extent to which Digital Transformation is real and affecting technology leaders. We found that 87% of respondents are experiencing some effects of the digital transformation trend and 100% are either making the push to adopt technologies to transform their business or monitoring their industry to find the right area in which to invest. We then outlined Fortium’s threefold perspective on Technology Leadership (Operate, Innovate and Secure) and how we believe that leadership can impact a company’s path toward an effective transformation that leverages technology for better business outcomes.  

This month we focus on first of those three perspectives: Operate. We proposed that achieving a state of transformation-readiness involves “reducing the footprint of traditional IT such that these needs of the organization are met by the simplest and smallest organization that will work while managing the least amount of internal technology possible to free up resources to focus on transformation.” In our April survey, we asked three questions related to this idea of transforming traditional IT:

  1. Approximately how much of your technology infrastructure is legacy-based versus cloud-based?
  2. How do you see your technology infrastructure changing in the next 18-24 months?
  3. One of the biggest challenges for technology leaders today is keeping legacy technology investments optimized in parallel with new innovations that help drive the business. What are the toughest parts of this hybrid technology integration in today's business environment?

Balancing Legacy Technology with Innovation

We’ll get straight to the point: 50% of our technology leaders only had 25% of their technology infrastructure moved to the cloud, and a full 86% had 50% or more of their technology infrastructure defined as “legacy” (‘not cloud’ for simplicity). A full 66%, however, say they will seek more cloud-based or subscription services in the next 18-24 months. So there still a lot of work to do and it appears it will happen quickly.  

But the answers to our third question speak to the challenges of maintaining both old and new technology strategies (what some call bi-modal or two-speed technology). They are:

  • It’s harder to keep information secure with a misaligned enterprise architecture (one which must service both the old and new)  - 38%
  • There is a talent shortage on the legacy systems that help run my business - 34%
  • Governance and compliance are completely different for legacy systems than for my hybrid systems (resulting in double the work) - 31%
  • My hybrid system is not delivering the type of data that we need to move to the next phase of delivery - 28%

While our survey this month didn’t speak directly to why technology leaders are moving from legacy to cloud (see last month’s issue regarding Digital Transformation), it is clear that they are moving, and the longer it takes them, the more painful it is.  

Transformation-Ready is the Goal

Technology leaders often find themselves in this place of trying to take advantage of advances in technology only to find themselves stuck between two powerful forces which make their companies prime candidates for disruption:

  • The promise of technological innovation, and the stories of those taking advantage of it, drive organizational leaders and their technology leaders to move from a stable state to a less-stable state of change, and

  • The pain of living in the midst of the transition (see above) causes the organization to question their resolve to complete the transformation

The longer the transition, the more painful and risky the journey. When pain and risk cause organizations to abandon transformation and return to a stable state, what feels like stability is actually setting the organization up for future, greater risk. The wider the gap between where a company is and where they need to be, the less likely they’ll be able to make the transition without serious disruption to the business.

The Agile movement has taught us that small, incremental changes are less risky and more successful than large, ambitious changes. The Lean movement and similar concepts have taught us that the more we do something with a genuine feedback loop for improvement the better we get at it over time. Applying these concepts to Technology Leadership, we must be making small changes consistently to maintain small gaps between where we are and where we want to be. When we do this, we maintain a state where the risk and magnitude of change remain small and the effort to maintain alignment with the external environment is minimized. We call this Transformation-Ready. But how do we get there and stay there?

TLaaS Operate - Getting to Transformation-Ready and Staying There

The Operate perspective of Technology Leadership-as-a-Service (TLaaS) is primarily concerned with how the organization uses technology to support the known needs of the business in the most efficient and effective manner. Operate is the domain of the Chief Information Officer (CIO) and, in most companies, it is the CIO who has the most overall responsibility for the success of Information Technology (IT) and commands most of the resources (money and people) dedicated to supporting the needs of the business through technology. And, in most companies, the majority of those resources of money and people are dedicated to maintaining the existing technology - leaving fewer resources to apply to innovation and security.

While the CIO often owns responsibility for innovation and security, s/he is often so burdened with the Operate responsibility that the promise of innovation and the risk management of security are often not optimized. We address this problem in two ways:

  1. Separate the responsibility for Operate (the CIO) from Innovate (CTO/CDO) and Secure (CSO/CISO).

  2. Allow the principles of Operate to continually achieve the greatest effectiveness in the smallest, most secure footprint in order to take advantage of greater innovation.

The entire process of achieving transformation-readiness is beyond the scope of this article but involves iterative cycles of Assess (where we are), Align (where we need to be, in measured amounts) and the Agenda (roadmap) to get there with a bias toward a smaller IT organizational footprint. It also includes more reliance on external partners such as cloud, SaaS, managed service providers (MSPs), robotic process automation (RPA) and, increasingly, artificial intelligence and machine learning. Such an organization is better able to maintain equilibrium with the external environment, avoid external disruption, and direct more resources toward innovation and customer intimacy.

If you or your organization would like more information on how Fortium’s Technology Leadership-as-a-Service is helping companies become Transformation-Ready, contact us right away.

Risk

Our April 2017 round-up of business-impacting events added Insider and Privilege Misuse to the top five incidents affecting leading technology leaders:

  1. Malware/Virus (35% down from 42%, up from #2)

  2. Phishing/Spear Phishing (33% down from 45%, down to #2)

  3. None (28% down from 33%, Still #3)

  4. Ransomware (21% up from 19%, Still #4)

  5. Insider and Privilege Misuse (18% from 9%, up from #8)

Innovation

The top ten this month in The Technology Management Radar includes:

  1. Software-as-a-Service

  2. Cloud

  3. Software-Defined X (Network, Data Center, Storage, etc.)

  4. Internet-of-Things

  5. Machine Learning (up from #6)

  6. Desktop-as-a-Service (down from #5)

  7. Robotic Process Automation (up from #9)

  8. Cognitive Computing (down from #7)

  9. Device Mesh (up from #10)

  10. Virtual/Augmented Reality  (up from #11)

Blockchain technology appears to be at a crossroads, with few major production deployments likely to happen in 2017 and its future still being debated.
— Larry Sikon, Fortium Partner

You’ll notice the conspicuous absence of blockchain from the top 10, even though it ranked #8 last month. This comes as no surprise to us, as our own blockchain expert Larry Sikon published an explanation of what's happening in his March article, Blockchain at a Crossroads. That allowed virtual/augmented reality to re-enter the top 10 at #10. While blockchain seems to be cooling off, it is definitely still being discussed in tighter fintech circles. We’ll continue to monitor its progress but perhaps it is being overshadowed by these write-in technologies that will be added to the radar next month:

  • Artificial intelligence (will be combined with Machine Learning)

  • Big Data/Data Lakes

  • Bots

About Fortium Partners and Technology Pulse

Fortium’s Technology Pulse report monitors technology trends impacting businesses now and in the future. We combine the insights of world-class technology leaders with analysis and commentary from its growing roster of partners – CIOs, CTOs, and CISOs on the forefront of delivering Technology Leadership as a Service to clients of all sizes and industries. For more information, visit FortiumPartners.com.

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Technology Pulse Report - March 2017

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Technology Pulse Report - March 2017

Executive Summary

We can’t read popular business literature these days without the mention of digital transformation and its closely-related cousin, disruption. But we wanted to know if digital transformation is really happening inside the companies our technology leaders serve. Moreover, is it just another buzz-phrase to fuel media and hype or is it a substantial shift in thought and behavior? I think we have good news for you… read on.

In our recurring review of Risk trends we found a surprising entry among the top five. Are we really making progress or is it just a momentary tease?

Finally, we take a step back from just reporting the Innovation trends from our Technology Management Radar and offer some insight on why SaaS and cloud refuse to budge from our list of the top five technology management innovations.

These are among the key findings from Fortium Partners’ February Technology Pulse survey, a brief but long-term study of the essential financial, risk and innovation trends among the world’s foremost technology leaders.

The Technology Pulse survey includes a brief series of information-dense questions to C-level technology strategists who deliver answers according to the current state of their business. The three key categories - Financial, Risk and Innovation - have the greatest long-term impact on the success of the application and management of technology in business.  Businesses leaders globally can gain valuable insights into the behaviors and drivers of CIO, CTO and CISO behavior in the existing and near-term market.

Digital Transformation

We took a break this month from the usual financial questions to dig into digital transformation. Without a doubt, digital transformation (those in the know call it DX) has captured the imagination and obsession of the media and consulting professions. Because the digital in digital transformation is broadly interpreted to be related to technology innovation, we set out to find out what our Technology Pulse survey respondents thought about it and how it’s impacting their daily lives as technology leaders. We asked three questions:

  1. Multiple industries are experiencing a rapid digital transformation.  How is your organization managing this shift?

  2. Is your organization experiencing a major digital transformation that impacts the way your company does business?

  3. As technology leaders, digital transformation is a part of day-to-day life. Which of the following statements is the most true when you define the technology disruption businesses are experiencing today?

  • The velocity of change in technology is at a breakneck pace, pushing business leaders to make decisions faster and more frequently.
  • The role of technology itself is changing, from processes to suppliers to models. We must rethink everything from the ground up.
  • Technology is no longer a function inside the business; technology IS the business. All businesses are technology businesses.
  • Digital transformation is a marketing buzzword. As a technology leader I believe these changes are business as usual.

The results surprised us! We’re further along this digital transformation journey than one might think. A whopping 87% of companies are experiencing a major digital transformation in all or some parts of the business. And a full 100% of respondents say that they (35%) or their organizations (49%) are making the push to adopt new technology to improve business or closely monitoring their industry to determine the right move (16%).

With the rising pace of change, more businesses are getting disrupted than ever before and experiencing a shorter life span. Businesses in the digital world are expected to create operating conditions where they are ready for continual evolution and proactively adapt as part of their new DNA… or face irrelevance.
— Alok Tyagi, Fortium Partner

Twenty-five percent of business technology leaders believe that the velocity of change in technology is forcing business leaders to make decisions faster and more frequently.  And almost 70% of the same group feels that businesses need to rethink everything about their business models from the ground up or re-cast themselves as technology companies altogether.

Only 7% of the top technology leaders in the country believe that digital transformation is all hype and that today’s environment includes the same changes we’ve been dealing with all along. We bet that number will drop based on the other responses.

So digital transformation is most definitely upon us. What is not clear is how companies are approaching digital transformation and which ones are doing it “right.” Over the next several months Fortium Partners will be delivering our point of view on digital transformation and dedicating this space to providing a deeper understanding of how technology leaders are participating in this trend.  

To set the stage, Fortium believes that digital transformation is not a one-time event. You don’t transform once and then enjoy the results for years to come. The pace of change is such that being in a state of transformation-readiness is where a company must exist, and the initial digital transformation effort is simply the process of reaching that state, maintaining that state and undertaking the first batch of innovations the organization has determined are worth pursuing. The primary value of technology leadership to this process is they have the best grasp of the potential, and the limits, of technology in any transformation. We believe that there are three technology perspectives best managed by one or more technology leaders in helping companies achieve digital transformation:

  • Operations - Achieving a state of transformation-readiness, in part, involves reducing the footprint of traditional “IT” such that these needs of the organization are met by the simplest and smallest organization possible while managing the least amount of internal technology possible to free up resources to focus on transformation. This is not “IT Outsourcing.” This is a highly selective and strategic process of relying on specialized technology providers for cost-effective and reliable solutions. We believe this is an evolution of the CIO role.
  • Innovation - Concurrent with, and beyond, achieving a state of transformation-readiness, a combination of deep technology expertise (knowing the potential and limits of technology) and a product-centric and customer-centric mindset is needed to partner with the business in its quest to harness technology to create new business models and achieve higher customer intimacy. We believe this is an evolution of the CTO role (often found in software/SaaS companies) and includes aspects of the chief digital officer (CDO) role.  
  • Security - As technology becomes a greater part of the business landscape, security (information/cyber as well as physical access), compliance and governance become an integral part of every part of business systems, processes and interactions. Technology boundaries span many entities, people and geographies traversing a complex web of authentication, authorization and regulation. This is the evolution of the chief information security officer (CISO) and chief security officer (CSO) roles.  

These three technology perspectives are complementary to the financial, marketing, operations and industry-specific skill sets and consultants needed to undertake digital transformation. Fortium will be expanding this point of view in the coming weeks and months in the Technology Pulse survey, the Fortium Advisor, our blog content and our continued contribution to the social business conversation.

Risk

Our February 2017 round-up of business-impacting events added a curious entry to the top five incidents affecting leading technology leaders:

  1. Phishing/Spear Phishing (45% down from 54%)

  2. Malware/Virus (42% down from 46%)

  3. None (33% up from… 0%?)

  4. Ransomware (19% down from 32%)

  5. Denial-of-Service Attack (14% down from 22%)

What? All categories of incidents are down and “None” is up 33% from 0%?  We’re not sure what to make of that. We would welcome the explanation that there is a positive trend toward fewer attacks or even that the bad guys took some time off over the holidays and got a slow start to the new year. We suspect it’s an anomaly as we haven’t seen corresponding headlines heralding a cybersecurity holiday. Stay tuned.

Innovation

We’re expanding the top five in The Technology Management Radar to include the top 10. The reason is that the top five on the radar is pretty static and we want to explore what else is happening.  

  1. Software-as-a-Service

  2. Cloud

  3. Software-Defined X (Network, Data Center, Storage, etc.)

  4. Internet-of-Things

  5. Desktop-as-a-Service

  6. Machine Learning

  7. Cognitive Computing

  8. Blockchain

  9. Robotic Process Automation

  10. Device Mesh

It’s important to remember that these rankings are a weighted-average of their relative positions in the buckets of Watching, Considering, Pursuing, In Production and Abandoning. The “Watching” category tends to represent those technologies just entering the radar and poised to move into the mainstream. The top five in this category are:

  1. Cognitive Computing

  2. Virtual/Augmented Reality

  3. Blockchain

  4. Machine Learning

  5. Robotic Process Automation

This transformation to use more digital technologies could be more operational or it could mean a disruption to the business model. Regardless, the digital agenda will impact all areas of your business well beyond the IT function.
— Steve Taff, Fortium Partner

It’s important to note that the adoption of Software-as-a-Service (SaaS) and cloud by mid-market and enterprise companies have already started a fundamental shift driving traditional IT components of people, skills, roles, data center spending, capex spending and more out of the enterprise and into more specialized technology providers. Much of this movement has even been precipitated by the chief marketing officer/chief sales officer (CRM, marketing automation, etc.) and the CFO (SaaS financials and other corporate finance applications) as the control of these expenditures move out of the CIO’s control. The role of technology leadership (CIO, CTO, CISO) is changing but not less relevant as there are myriad subtleties of managing integrations, security and leveraging data across multiple platforms for strategic advantage. These trends will be explored in the next several months as Fortium reveals its point of view regarding the reinvention of technology leadership for the era of digital transformation.

About Fortium Partners and Technology Pulse

Fortium’s Technology Pulse report monitors technology trends impacting businesses now and in the future. We combine the insights of thousands of world-class technology leaders with analysis and commentary from its growing roster of partners – CIOs and CTOs on the forefront of delivering Technology Leadership as a Service to clients of all sizes and industries. For more information, visit FortiumPartners.com.

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Technology Pulse Report - January 2017

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Technology Pulse Report - January 2017

Executive Summary

For our 2016 Year-End, 2017 New Year edition of The Pulse we take a break from our usual format to look back at 2016 and look forward to 2017. The theme for this edition is "Surprises," mostly the lack of them, because several of the swells we've discussed this year appear set to become waves next year and beyond. Let's just say our CIOs, CTOs and especially our CISO's have their work cut out for them in 2017.  But they won't be the least surprised to hear that. Read on...

The Technology Pulse includes a brief series of information-dense questions to C-level technology strategists who deliver answers according to the current state of their business. The three key categories - Financial, Risk and Innovation - have the greatest long-term impact on the success of the application and management of technology in business.

The Technology Pulse provides an inside look at the biggest trends in technology for today’s businesses and corporate leaders to gain valuable insights into the behaviors and drivers of CIO and CTO behavior in the existing and near-term market.

A Brief Departure

The Technology Pulse regularly asks C-level technology executives to answer questions in three key categories - Financial, Risk, and Innovation. Our December survey, however, took a brief departure from the usual questions. We asked three questions designed to provide a summary of 2016 and a prediction for 2017:

  1. Which technology questions or requests from your board and executive team surprised you the most in 2016?
  2. Which key technology developments from 2016 will have the greatest impact in 2017 and beyond?
  3. Which functional areas will command the most attention and effort in 2017?

2016 Surprises... Not so surprising...

If you've been following along with us on The Pulse you noticed a few trends: technology spending is not slowing down, security is high on everyone's list of concerns, and the cloud (and increasingly machine learning/artificial intelligence) is becoming the dominant technology platform. So when we asked which topics raised by boards (think: RISK) and other executives surprised our respondents the most in 2016 - we weren't all that surprised (and neither were our tech execs). Can you pick out the top concern from the graphic above? Not too hard huh?  

While it took several forms (cybersecurity, security, ransomware, malware, etc.), Security overshadowed all other topics. We've covered security and several of the subtopics in recent editions of The Pulse so check them out if you're interested. Fortium is increasing the number of Partners in our Security practice focused on information and physical security and we've seen a serious uptick in requests from clients for security leadership.  

The other dominant response to this question was that nothing was all that surprising to our tech execs. Our Partners and our extended network of CIOs, CTOs, and CISOs are among some of the most connected and informed technology executives anywhere. If they were surprised, we'd be surprised! 

2017 Impact and beyond

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We also asked our tech execs to let us know which of the developments in 2016 will have the greatest impact on 2017 and beyond. You won't be surprised at all to learn that Security topped the list at 43% followed by Machine Learning (including the similar Augmented/Artificial Learning/Reality) at 28% and Cloud at 25%.

Cloud + Security + Machine Learning

Reading between the lines on some of the comments about security on this and the previous question, respondents are emphatic that security is no longer (if it ever was) a technology problem. Security is a business problem with technical aspects that has a far-reaching impact on reputation, shareholder value, financials and competitiveness. While it may be tempting to retreat to the days of centralized, disconnected, and, in theory, safer computing, companies and their tech execs are being pulled toward the Cloud by the tremendous promise of faster innovation and lower long-term costs. Further, almost every serious offering of general Machine Learning is coming from one of the large cloud vendors. Fortunately, most tech execs understand the dilemma and are developing strategies appropriate for risk-tolerance of their companies. It's not easy but it's just part of the job.

2017 Focus (and One Surprise!)

So where will tech execs put their focus in 2017? If it weren't so serious, it might be funny... a whopping 70% of respondents told us that Security will be commanding a large portion of their attention in 2017. OK, we're sufficiently informed and forewarned. We'll be blogging, speaking, assessing and advising on Security, as well as partnering with some of the leading security vendors and forensics experts, all year long. If we can help, please let us know.

One area that we haven't spent a great deal of time discussing here in The Pulse is Application Development. If infrastructure (cloud or otherwise) is the highway of technology, applications are the vehicles that get us where we need to go. Fully 55% of tech execs listed Application Development as one of their top priorities for 2017. We suppose, given the rise of Software-as-a-Service, the proliferation of Robotic Process Automation, Integration-as-a-Service and the explosion of low-code development platforms (all technologies that reduce the need to develop your own applications and integrations), we could chalk this one up to our first, and only, surprise of this edition of The Pulse. We'll be watching all related application development categories and keep you apprised as 2017 unfolds.  

About Fortium Partners And Technology Pulse

Fortium’s Technology Pulse report monitors technology trends impacting businesses now and in the future. We combine the insights of thousands of world-class technology leaders with analysis and commentary from its growing roster of partners – CIOs and CTOs on the forefront of delivering Technology Leadership as a Service to clients of all sizes and industries. For more information, visit FortiumPartners.com.

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Technology Pulse - November 2016

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Technology Pulse - November 2016

Technology spending on the rise, the Cloud embraces Learning, and technology leaders speak out (and blush a little) on their place in the C-Suite.

Executive Summary

Technology spending is on the rise as the election is resolved and the 2017 budgets remain intact, business-impacting events continue unabated, the cloud sets its sights on machine learning, and CIOs speak on out on their challenges in the executive suite - but brag a little as well.

These are among the key findings from Fortium Partners’ November survey Technology Pulse, a brief but long-term study of the essential financial, risk and innovation trends among the world’s foremost technology leaders.

The Technology Pulse includes a brief series of information-dense questions to C-level technology strategists who deliver answers according to the current state of their business. The three key categories - Financial, Risk and Innovation - have the greatest long-term impact on the success of the application and management of technology in business.

The Technology Pulse provides an inside look at the biggest trends in technology for today’s businesses and corporate leaders globally can gain valuable insights into the behaviors and drivers of CIO and CTO behavior in the existing and near-term market.

Financial

We’re noticing some changes as our respondents near the end of the year.  Whether it is related to the resolution on the political front or a response to other factors, there was a general trend to increased spending in November across all three expense categories (Operating, Capital, and Personnel). Less than half (45%) of the respondents are on plan (a 4% decrease from the previous month and a 9% decrease since August) chiefly driven by a 5% increase in the number of respondents spending more than plan from the prior month. The additional spending is consistent across expense categories.

Risk

Our November round-up of business-impacting events added Malware/Virus at the #2 spot in our top 5 incidents affecting leading technology leaders:

  1. Phishing/Spear Phishing (54% down from 62%)
  2. Malware/Virus (a new addition to the list at 46%)
  3. Ransomware (32% up from 29%)
  4. Denial-of-Service Attack (22% up from 20%)
  5. Significant Production Outage (20% down from 24%)

If you’ve been following along with us on the Pulse surveys you’ve noticed the prevalence of business-impacting events, mostly security-related events. It’s clear that these problems are not going away and our CIOs, CTOs and CISOs (Chief Information Security Officers) must be educated, prepared and vigilant. But beyond an aggressive defense, what can businesses do to mitigate the risks posed by these security attacks?  Increasingly, the answer to that can be found in Fortium Partner and resident Cybersecurity Insurance expert Tony Parrillo’s recent blog posts on cybersecurity that cover the basics and provide some lessons learned.

Fortium’s team of C-level cybersecurity experts are standing by ready to help, just reach out to start a conversation.

Innovation

If you didn’t look closely, you’d think we’d just reprinted the Top 5 Innovations on technology leaders’ radars from our October survey:

  1. Software-as-a-Service
  2. Cloud
  3. Internet-of-Things
  4. Desktop-as-a-Service
  5. Software-Defined Infrastructure

But look again… same items, different order.  Internet-of-things rose to #3 and Desktop-as-a-Service bumped Software-Defined Infrastructure down to the #5 spot. Regardless of the movement, the implication is clear: these top 5 innovations warrant your attention due to their staying power.

Just outside the top 5 at #7 is an innovation mentioned more times than #4 and #5 on our list is vying for your attention: Machine Learning (the ability for computers to learn without being explicitly programmed). A discipline of computer science that is too broad and complex to address here, Machine Learning is experiencing a surge of interest and has collided with #2 on our list: Cloud. The leading cloud vendors (AWS, Google, IBM and Microsoft) have all rolled out machine learning (related: artificial intelligence and deep learning) capabilities over the past couple of years. Amazon Web Services just announced three new services  (Rekognition, Polly, and Lex) at Re:Invent this past week designed to “bring machine learning to every developer," Amazon GM Swaminathan Sivasubramanian said in this ZDNet article. The driving technologies behind Fintech’s roboadvisors, chatbots, semantic understanding of social media trends and more; the effects of easier access to machine learning will accelerate its use and the creation of entirely new experiences for consumers and business users alike.  

If you’re not sure how to take advantage of machine learning (or artificial intelligence or deep learning), reach out for a conversation with Fortium.

Special Topic: CIOs in the Executive Suite

This month we asked technology leaders to pull back the curtain on some of the issues they face as members of the executive suite in companies of all sizes.

  • What is the most difficult topic to discuss with your CEO and executive team?
  • How do your C-level peers view your contribution to the organization?

Difficult Topics

Our technology leaders opened up on the most difficult, and personal, challenges related to their role on the executive team:

  • 44% of respondents indicated that one of their most difficult challenges is positioning the technology function more strategically with respect to the CEO and their peers.  
  • 25% identified the isolation one feels as an executive in a highly-technical field which few outside of IT really understand.
  • 23% voiced a frustration that, while managing an organization’s technology can yield valuable insight into improvement opportunities throughout the organization, the CIO’s peers aren’t receptive.

Peer’s Perspective

How a CIO’s contribution is viewed by their peers can have a significant impact on the success of the individual in the role.  Our respondents revealed the following trends:

  • 30% reported that the Board “values my leadership."
  • 28% reported that their peers believe the organization “would fail without the contribution of my technology team."
  • 28% also said that “technology is considered equally important as finance, operations, sales and marketing by my peers."
  • Finally, 26% of technology leaders surveyed responded that they are “involved in as many strategic decisions as other members of the C-suite."

The responses to this question demonstrate an area of improvement involving the entire C-suite. In days past, the CIO role and technology team was not viewed as strategic as other roles, such as sales or finance. That trend is changing as technology leaps into the driver’s seat and becomes a business driver through new innovations like the Internet of Things, Big Data (and predictive analytics), machine learning and other digital disruptors that are changing the way we do business.

We anticipate that over time, these percentages will continue to rise as CEOs look to technology leaders to boost competitiveness by finding new supply chain efficiencies, using data inputs to become customer experts using customer-centric analytics, transforming technology teams into engines of customer engagement using apps and protecting organizations through world-class cybersecurity.

While there’s no doubt that th role of the CIO is often difficult for CEOs and peers to relate to, the contribution of the CIO and their organization is perceived as truly valuable. As we’ve seen from the Risk and Innovation sections of this report, the concepts and challenges faced by CIOs shows no sign of getting less technical or easy to understand. CIOs must embrace the bilingual nature of the role and work equally hard at communicating well when speaking in business terms as when speaking in technical terms. A recent blog post on the Fortium Partners blog, The CEO’s New Best Friend: The “Bilingual CIO”, is one executive’s take on the subject.

About Fortium Partners and Technology Pulse

Fortium’s Technology Pulse report monitors technology trends impacting businesses now and in the future. We combine the insights of thousands of world-class technology leaders with analysis and commentary from its growing roster of partners – CIOs and CTOs on the forefront of delivering Technology Leadership as a Service to clients of all sizes and industries. For more information, visit FortiumPartners.com.

 

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Technology Pulse - October 2016

Technology budgets remain stable in 2016 and are likely to remain strong through 2017, Denial-of-Service takes center stage, and Internet-of-Things is a double-edged sword.

Executive Summary

Technology budgets remains stable heading into the fourth quarter of 2016 and are likely to remain so in 2017, Denial-of-Service attacks take center stage due to the October attack on leading DNS provider Dyn, and the growth of Internet-of-Things has its pros and cons.

These are among the key findings from Fortium Partners’ October survey Technology Pulse, a long-term study of the essential financial, risk and innovation trends among the world’s foremost technology leaders.

The Technology Pulse includes a brief series of information-dense questions to C-level technology strategists who deliver answers according to the current state of their business. The three key categories - Financial, Risk and Innovation - have the greatest long-term impact on the success of the application and management of technology in business.

The Technology Pulse provides an inside look at the biggest trends in technology for today’s businesses and corporate leaders globally can gain valuable insights into the behaviors and drivers of CIO and CTO behavior in the existing and near-term market.

Financial

Our respondents are nothing if not consistent in the Financial section. On average, more than half are On Plan with their spending in all three expense categories (Operating, Capital and Personnel) for the past three months. October saw a reversal of September’s gains for On Plan by retreating to just less than half of respondents reporting On Plan in all three categories. Operating Expense surged more than 20% (more than plan) while Capital and Personnel expense fell (less than plan) by similar margins.  Overall, more companies are On Plan than not, and for those that are not On Plan, more are spending Less than Plan.

2017 Preview

As we near Budget season, we asked respondents this month to speculate on the likelihood that next year’s budget will increase, remain flat or decrease. Most companies (44%) expect next year’s budgets to remain flat and almost as much (42%) expect an increase. Only 14% expect budgets to decrease. When 86% of technology leaders expect their budgets to increase or stay the same next year, that’s good news for the technology industry and the economy!

Risk

Our Pulse survey respondents did not get a break from business-impacting events in the month of October. The top five incidents impacting technology leaders are:

  1. Phishing/Spear Phishing (62%)

  2. Ransomware (29%)

  3. Significant Production Outage (24%)

  4. Denial-of-Service Attack (20%)

  5. Physical Theft/Loss (16%)

We discussed Phishing in our September edition and Ransomware in our August edition of the Technology Pulse. The third and fourth places on our list (Significant Production Outage and Denial-of-Service Attack, respectively) take the spotlight in this month’s Pulse report as it is likely that both are related to a single incident that happened on October 21st - the Dyn DNS Distributed Denial-of-Service attack.

A Denial-of-Service attack, according to Wikipedia, is “a cyber-attack where the perpetrator seeks to make a machine or network resource unavailable to its intended users, such as to temporarily or indefinitely interrupt or suspend services of a host connected to the Internet. Denial of service is typically accomplished by flooding the targeted machine or resource with superfluous requests in an attempt to overload systems and prevent some or all legitimate requests from being fulfilled. It is analogous to a group of people crowding the entry door or gate to a shop or business, and not letting legitimate parties enter into the shop or business, disrupting normal operations. Criminal perpetrators of DoS attacks often target sites or services hosted on high-profile web servers such as banks or credit card payment gateways. Motives of revenge, blackmail or activism can be behind attacks.”

Dyn, an internet infrastructure company headquarters in New Hampshire, provides Domain Name Service (DNS) to many of the internet’s marquee brands including Netflix, Paypal, Twitter, Spotify and many other well-known brands. Starting at 7 a.m. ET on Friday, October 21 the first of three waves of attacks from tens of millions of IP addresses began to deny service to Dyn’s customers. While each of the attacks were eventually defeated, Dyn described the attack as a “very sophisticated and complex attack." And an attack on a DNS provider is particularly strategic because they are the very first link between you and the site you want to reach.  

Attacks such as this denial of service highlight the fragility of the web’s infrastructure and the necessity of strategies such as Distributed Denial-of-Service mitigation processes and having a Secondary DNS strategy with another provider in the event the first provider is attacked. Fortium’s Partners rely on the firm’s security practice and assessment methodologies which uncover process deficiencies that can lead to higher vulnerability. Please contact us if you need help.

Innovation

In a twist made for great stories, October’s Risk and Innovation sections contain an ironic connection. But first, let’s reveal the top five innovations that top technology leaders are watching:

  1. Software-as-a-Service

  2. Cloud

  3. Software-Defined Infrastructure

  4. Internet-of-Things

  5. Desktop-as-a-Service

We wrote about the dominance of Software-as-a-Service in the September Pulse ("SaaS is King") and you can see it still reigns at the top of the list. This month we spotlight our fourth innovation: Internet-of-Things (IoT). Wikipedia explains IoT as: “the internetworking of physical devices, vehicles (also referred to as "connected devices" and "smart devices"), buildings and other items—embedded with electronics, software, sensors, actuators, and network connectivity that enable these objects to collect and exchange data.”

Ubiquitous wireless communication, real-time analytics, machine learning (6th on our Innovation list), commodity sensors and embedded systems have combined to produce an explosion of IoT devices (estimates say 50 billion devices by 2020) collecting and forwarding a startling amount of continuous information about our lives and the environment around us. The amount of data gathered by IoT is, itself, driving more SaaS/Cloud innovations such as Cognitive Computing (#3 of our “Watching” list, just behind IoT) as more sophisticated services are required to keep up with, and make sense of, all the data.

But at #4, Internet-of-Things (IoT), shares an interesting connection with the #4 item in our Risk category - Denial-of-Service (DOS) attacks.  As a DOS attack needs millions of points of presence on the Internet to do its dirty work, it turns out that IoT is an all-too-willing accomplice.  When IoT devices are compromised and controlled by malware they can be used to perpetrate a DOS attack by their temporary owners.  It turns out a particular brand of malware, the Mirai botnet,  was particularly active in the Dyn DNS attacks in October - driving much, but not necessarily all, of the traffic in the attacks.

If you’re not sure how to take advantage of IoT or protect against it being abused by others, reach out for a conversation with Fortium.

Finally, we mentioned that we’d be adding an up-and-coming innovation, Robotic Process Automation (RPA), to our list of tracked innovations this month. RPA started off at #8 overall on the list which says it is relevant but not quite ready for the spotlight. We’ll keep you updated on RPA and we’ll be adding SAP HANA to next month’s list based on several indicators of growing interest.

About Fortium Partners and Technology Pulse

Fortium’s Technology Pulse report monitors technology trends impacting businesses now and in the future. We combine the insights of thousands of world-class technology leaders with analysis and commentary from its growing roster of partners – CIOs and CTOs on the forefront of delivering Technology Leadership as a Service to clients of all sizes and industries. For more information, visit FortiumPartners.com.

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Technology Pulse - September 2016

Budget Performance Remains Positive, Phishing Nets More Victims, And Non-Technology Leaders Learn To Speak Cloud

Executive Summary

These are among the key findings from Fortium Partners’ September 2016 survey Technology Pulse, a brief but long-term study of the essential financial, risk and innovation trends among the world’s foremost technology leaders.

The Technology Pulse includes a brief series of information-dense questions to C-level technology strategists who deliver answers according to the current state of their business. The three key categories - Financial, Risk and Innovation - have the greatest long-term impact on the success of the application and management of technology in business.

The Technology Pulse provides an inside look at the biggest trends in technology for today’s businesses and corporate leaders globally can gain valuable insights into the behaviors and drivers of CIO and CTO behavior in the existing and near-term market.

Financial

For the most part, budget performance of technology leaders remains unchanged from our last survey. About 50 percent of respondents are “On Plan” for 2016 for their expense and personnel budgets while those who are “On Plan” with their capital budgets passed 60%. Of course that leaves the other half of respondents spending more or less than plan. Overall, more are spending less than plan than those who are spending more than plan with that gap widening this month from last month.  

What do the numbers tell us? Until we have longer trends and more details it’s hard to be specific but we’ll take an educated shot at it. With the U.S. presidential election looming and other political and financial uncertainties worldwide, it’s no surprise that the fourth quarter of 2016 might yield budget performance that is spending slightly less than plan. We continue to be particularly interested in personnel budgets as there are more respondents reporting that they are spending less than plan for personnel expense compared to 22 percent of operating expense budgets that are less than plan and 15 percent of capital expense budgets that are less than plan. Our Partners contend that technology efficiencies gained through automation, outsourcing and workflow improvements are allowing companies to reduce personnel. Perhaps the data is telling us that it’s happening even faster than anticipated (or budgeted).  

Risk

This month’s survey continues to raise eyebrows for the number and types of business-impacting events our respondents are facing. While production outages and Ransomware are still significant concerns at 28% and 23% respectively, it’s Phishing that takes center stage this month with over 60% of respondents indicating a Phishing/Spear Phishing event in the last 90 days.

For the uninitiated, according to Wikipedia, “Phishing is the attempt to obtain sensitive information such as usernames, passwords and credit card details (and sometimes, indirectly, money), often for malicious reasons, by masquerading as a trustworthy entity in an electronic communication.” The Anti-Phishing Working Group (APWG), a not-for-profit industry association focused on eliminating the identity theft and frauds that result from the growing problem of phishing, crimeware and e-mail spoofing, reported a 250% increase in the number of Phishing websites observed between the fourth quarter of 2015 and the first quarter of 2016. The report also claims that over 400 brands are targeted each month and that the retail/service sector is the most targeted sector.

Fortium Partner John Alvertos addressed Phishing in his recent blog post Security Awareness is a Year-Round Program. Alvertos quoted the 2015 Verizon Data Breach Investigations Report which reported that “23% of recipients now open phishing messages and 11% click on attachments” (DBIR, pg. 12).  Alvertos warned “Company network defenses will block most of phishing emails, but some will get through. And if we allow access to personal email (gmail, etc.) from the office network and if users have local admin rights on their desktops or laptops, then the risk increases.”

The key, Alvertos says, is year-round training. “Companies therefore need a year-round program that continues to educate and remind people about their shared responsibility to protect the assets of the organization and to act responsibly so as not to expose the company to threats. The program should also alert them to new types of threats or old threats that have morphed into new ones. And it should be carefully defined, in regards to the targeted audience, the media, the timing and the message. Using multiple communication channels, customizing your message to specific audiences, incorporating speakers and giveaways and strategically timing messages throughout the year should make the awareness program much more effective. And if part of the program is to periodically test our employee’s awareness via ‘gotcha!’ type of emails, or by leaving thumb drives around the office to see who plugs them in, the effect on awareness will be much more profound when they least expect it.”  

Innovation

Last month we were introduced to the media darling Blockchain as one of the fast-emerging technologies on the minds of technology leaders. While Blockchain remains on the list of more than 25% of respondents “Watching” list, it’s still the Cloud that takes the top spot of the emerging technologies that are in production and gaining steam. Whether it’s Software-as-a-Service like Salesforce.com, Platform-as-a-Service like Google’s App Engine, or Infrastructure-as-a-Service like Amazon’s AWS platform, the Cloud is here to stay and gaining steam by the day.

If you’re a non-Technology executive, learning about the Cloud can be a daunting task with all of the acronyms and technical terms. Fortium Partner Bob Breitman helps all of us get a non-technical perspective on the Cloud with his popular five-part blog series What Non-IT Executives Should be looking for in the Cloud. It’s a great series and we recommend you read all five parts but if you’re not planning to read it we leave you with this sobering thought… it’s not a matter of “if” you’ll go to the Cloud but “when."  The economics and efficiencies are just too compelling to be ignored. Of course, Bob reminds his readers that Fortium stands ready to help when it’s time to move.

Technology executives will be interested to know that Software Defined Networking (SDN) took the top spots of “Watching” and “Considering” in our survey this month. Market research firm IDC predicts the SDN market will top $12.5 billion by 2020 and IHS believes SDN will go mainstream in the data center and enterprise LAN in late 2016/early 2017 which is just around the corner.  

Finally, each month we ask our technology leaders if there are any technologies that are vying for their attention that should be added to the list. Next month we’ll be adding Robotic Process Automation (RPA) to the survey.  Be sure to check in with us next month to find out how RPA compares to the other technologies on our radar.  

Bonus Question... Literally

We asked technology leaders this month about the biggest factor impacting their bonus compensation. The good news is that 80% of our respondents receive bonus compensation. Of those, over 50% said that Overall Business Performance is the key metric that influences their bonus. The next highest factor at 18% was IT Performance. Trailing by a significant margin were Product Speed to Market and Budget Adherence.  

IT Performance is the bonus factor that IT Leaders have the most control over. Fortium recommends that technology leaders ensure that there is alignment with the CEO as to how IT performance is measured and what is considered exceptional. This usually starts with a CEO/CIO Alignment diagnostic followed by an initiative that gives detailed reports cards from stakeholders satisfaction with core IT services. If you need some help to make this happen, let us know.

About Fortium Partners And Technology Pulse

Fortium’s Technology Pulse report monitors technology trends impacting businesses now and in the future. We combine the insights of thousands of world-class technology leaders with analysis and commentary from its growing roster of partners – CIOs and CTOs on the forefront of delivering Technology Leadership as a Service to clients of all sizes and industries. For more information, visit FortiumPartners.com.

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Technology Pulse - August 2016

Technology Leaders Are Sticking To Their 2016 Financial Plans While Battling The Surge Of Ransomware And Keeping An Eye On Blockchain Technology

Executive Summary

These are among the key findings from Fortium Partners’ inaugural survey Technology Pulse[PDF], a brief but long-term study of the essential financial, risk and innovation trends among the world’s foremost technology leaders.

The Technology Pulse includes a brief series of information-dense questions to C-level technology strategists who deliver answers according to the current state of their business. The three key categories - Financial, Risk and Innovation - have the greatest long-term impact on the success of the application and management of technology in business.

The Technology Pulse provides an inside look at the biggest trends in technology for today’s businesses and corporate leaders globally can gain valuable insights into the behaviors and drivers of CIO and CTO behavior in the existing and near-term market.

Financial

Most technology leaders are sticking to their 2016 financial plans with over 50 percent of respondents reporting they are “On Plan” with each of their expense, capital and personnel plans for the year. The remaining executives report an even mix of “Spending more than Plan" and “Spending less than Plan.” Interestingly, those who are spending ahead of plan in general are more prominent in the operating and capital expense categories than in Personnel.

Our analysis of two macro trends in technology management suggest that technology strategies involving cloud computing, SaaS and managed services for infrastructure and security are leading to higher expense and lower personnel spending.

Additionally, the popular labor arbitrage strategies of offshore development and business process outsourcing (BPO) are seeing intense competition from newer near-shore, mixed-shore, highly-efficient onshore development as well as robotic process automation (RPA) to achieve the same or more without an increase in personnel spending.

Risk

Just over half of anonymous respondents reported a significant, business-impacting event in the past 90 days. While there is a mix of web application attacks, denial of service attacks, and more general production outage events at the lower end of the frequency pattern, a surprising 40 percent of businesses experiencing an incident went head-to-head with ransomware – an up-and-comer in the dark world of malware threat vectors.

The response to ransomware from some CIOs and CISOs blurs the line between innovative and cavalier, with one CISO reportedly requesting permission from corporate legal to pay ransoms within certain parameters to minimize the impact and further risk to his organization. He explains, “By the time the legal process runs its course it’s too late. We’ve lost valuable employee productivity as well as insight into the attacker’s approach that assists with combating future threats”.

“If you’re a target, you will be breached. You’re attacked most every day.”

— Joel Rakow, Fortium Partners Cybersecurity Expert

Joel Rakow, Fortium Partner, lawyer and cybersecurity expert who has advised the Secret Service and the FBI, recently addressed the rise of ransomware on a popularpodcast (at 12:21 and 19:03). Joel insists, “if you’re a target, you will be breached. You’re attacked almost every day.”

So what is the answer to combating the largest vector of malware compromises that has seen a five-fold increase from 2015 to 2016? Rakow offers a not-too-encouraging solution: “The cynical side of security is you don’t have to be perfect, you only have to be better than others. You make your defense a little bit stronger than other people and the bad guys will go for the easier opportunities.”

The bottom line? A combination of good threat intelligence, perimeter security, monitored traffic and backups is the best defense. Fortium recommends a managed security service provider (MSSP) that provides outsourced monitoring and management of security devices and systems to reduce the number of operational security personnel an enterprise needs to hire, train, and retain to maintain an acceptable security posture.

Innovation

In this first edition of Technology Pulse, leaders reveal the technologies on their personal radars that they are using, watching or abandoning in their quest to keep their companies at the forefront of innovation. Topping the list of technologies just coming onto the radar at the “Watching” position is the FinTech darling Blockchain, Internet of Things (IoT) and software-defined infrastructure (Network and Data-Center). Of those, software-defined infrastructure and IoT are the technologies making the strongest push to production while Blockchain garners the most press.

Larry Sikon, Fortium Partner and financial services expert has been tracking and educating others on the promise of blockchain to the financial services sector. In his seriesof blog posts on the Fortium blog, Larry explains the basics of blockchain in Blockchain Technology and Distributed Ledgers, the impact of blockchain on and offof Wall Street, the gold rush for blockchain-related startups in Blockchain Startups & Financial Services, and most recently how technology leaders in smaller companies can take advantage of blockchain in IT Directors Unchained.

Interestingly, Desktop-as-a-Service (DaaS) ranks high in multiple categories suggesting that while some are just beginning to deploy DaaS to production, others are beginning to sunset their DaaS strategies. Notable additions to the innovation category provided by technology leaders that we’ll be tracking include cognitive computing, natural language processing (NLP) and virtual reality/augmented reality (VR/AR).

About Fortium Partners And Technology Pulse

Fortium’s Technology Pulse report monitors technology trends impacting businesses now and in the future. We combine the insights of thousands of world-class technology leaders with analysis and commentary from its growing roster of partners – CIOs and CTOs on the forefront of delivering Technology Leadership as a Service to clients of all sizes and industries. For more information, visit FortiumPartners.com.

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