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As enterprise mobility products and services progress through their market life cycles,
innovation and cost optimization opportunities arise. IT leaders must comprehend mobile
asset maturity and commoditization to plan successful road maps, negotiate pricing, plan
divestments and manage portfolios.
Overview
Key Findings
The Nexus of Forces has created markets for a new wave of products and services that are
beginning to see adoption in the enterprise, and mobility remains one of the top three IT
investment priorities in the CIO agenda.
The broad acknowledgment that the enterprise can't keep pace with cloud and consumer
mobility innovations continues to impact technology acquisition patterns, but IT is
increasingly adapting its approach to the new role of facilitator and a setter of dynamic
boundaries.
The rapid pace of evolution of mobility assets remains a key characteristic of this market.
Organizations investing in mobile technologies must be aware of the ephemeral nature of
mobile technology, where operational, development and security paradigms may shift
rapidly in light of innovation.
Enterprise mobility has radically transformed over the last seven years and the initial
investments in traditional mobility infrastructure have moved into obsolescence.
Recommendations
Re-evaluate mobility management requirements (if you are an organization currently
utilizing only basic MDM or Exchange ActiveSync), with a focus on content access and
mobile app adoption and, if appropriate, begin evaluating broader EMM suites.
Look for opportunities to leverage mobile back end as a service (mBaaS) to speed
application development and integration, defray capital investments, and enable agility and
flexibility in the API layer as mobile solutions evolve. Evaluate your mobile app strategy
annually to ensure that it remains flexible and adaptable to evolving mobile technologies
and requirements.
Consider an enterprise-grade EFSS solution and prioritize investments there if you seek to
get back control of employees' usage of personal cloud storage at work.
Evaluate mobile collaboration products that may improve user experience and productivity if
you currently support a substantial base of mobile apps and cloud services for significant
portions of your end-user population.
Table of Contents
Analysis
o What You Need to Know
Commoditization
o Market Background
o Supplier Landscape
Advantage
Choice
Cost
Replacement
Tables
Figures
Analysis
This document was revised on 29 May 2015. The document you are viewing is the corrected
version. For more information, see the Corrections page on gartner.com.
Commoditization
Commoditization is shown on the IT Market Clock as the (radial) distance from the center of the
clock. The farther toward the outside an asset class is, the more commoditized it is.
Commoditization is evaluated on a scale of four to 20, with 20 being the maximum level of
commoditization. Commoditization is the sum of three measures:
The level of standardization: Determines the potential ease with which the product or
technology can be interchanged, hence the buyer's potential capability to exercise choice.
The number of suppliers: Defines the range of choice available to buyers, hence their
potential ability to take advantage of the interchangeability/interoperability yielded by
standardization.
Access to the appropriate skills: Every product and technology requires some level of
internal capability to use it. The ease with which these capabilities can be obtained and
augmented directly impacts the internal cost of switching suppliers.
Levels of Standardization
Table 1 summarizes the scores corresponding to the different levels of standardization.
Table 1. Summary Measures of Standardization
4 At least three geographically overlapping suppliers; consistent level of choice in all geographies
2 Two suppliers
1 Single supplier
2 Skills in short supply; situation improving (demand falling and/or supply increasing)
Phase Changes
A number of IT assets have moved in their market life. Other IT assets have moved ahead in their
life time, that is, to the next phase in the graphic, as indicated below:
Enterprise file sync and share
Enterprise mobile management
Public app stores
Other Changes
Some assets have been renamed in this year's version to align with current de facto terminology:
Mobile containers: This asset class from the 2013 IT Market Clock has been split into two
new asset classes to reflect the nature of the market and to align with the Gartner mobile
container taxonomy (see "Learn the Taxonomy of Mobile and Endpoint Management
Architectures" ). The two new asset classes are mobile security containers and mobile
development containers.
Secure corporate email: This asset class has been subsumed under the umbrella of a new
asset class called "secure mobile messaging," which encompasses not only secure email,
but other forms of secure mobile communication as well, including SMS messaging and
ephemeral messaging.
Market Background
This IT Market Clock spans multiple mobile markets and technology domains. Mobile technology
assets tend to move rapidly from inception to maturity, but innovations continue at a great pace
under fierce competitive and customer pressures. Mobile markets are aggressive and evolving
quickly, too. Asset categories in this IT Market Clock are characterized by rapid transformation;
many will move to the next phase in less than two years, and their expected lifetime is definitely
shorter than for other areas in IT.
Cloud, collaboration and social computing are converging with consumer mobility and affecting
organizations and their IT changing IT management requirements and priorities, rules and
management policies accordingly. The next wave of mobility encompasses wearable, sensors and
connected objects, and will rapidly push the evolution of apps, services, tools and security
capabilities that are needed in emerging scenarios.
In such a dynamic space, there are generational trends that influence IT choices, particularly
different versions of mobile OS platforms and evolving mobile application development paradigms,
and drive opportunities for disinvestments from older releases and reinvestments in the newest
products in the Advantage phase. There are also substitution trends , where older technologies or
products tend to be substituted or should be by newer products and technical capabilities; for
example, tablets replacing PCs in certain task-specific areas such as plant operations or quality
control.
The list of key ongoing trends in mobility markets that IT planners need to be aware of are:
Mobility management: Driven by the massive adoption of consumer devices in business,
mobility management is the most critical mobility investment today. Mobile device
management (MDM) offerings have evolved into EMM, encompassing mobile application
management (MAM), marketing content management (MCM) and expanding onto virtual
clients/desktop management. EMM offerings are maturing and being adopted by
organizations.
BYOD: This support model is becoming the norm for most organizations, forcing IT to deal
with technical and support challenges. The need to protect the corporate footprint on a
personal device calls for investments in EMM, secure corporate messaging, enterprise file
synchronization and sharing (EFSS), containers and mobile data protection.
"Appification": This refers to the progressive adoption of mobile apps instead of browsers to
access the Internet. Relevant IT assets include public app stores, enterprise app stores and
EMM for mobile application distribution and discovery.
Mobile application development: The key emerging trend in this area is the growing
preference for developing hybrid applications and cross-compiled apps, which in the current
market state balances trade-offs between native and pure Web development. Hybrid
development and cross-platform compiling tools are becoming increasingly popular options
for enterprises, as IT looks to support broader devices and device capabilities without the
complexity and expense of native app development. Also gaining momentum for the very
same reasons are rapid mobile app development tools for business-to-employee (B2E) and
business-to-consumer (B2C) apps that enable customers to focus on rapid deployment and
high productivity with no programming involved rather than higher control and
customization.
Mobile collaboration: This is a range of capabilities that enable mobile workers to
collaborate in real time on smartphones and tablets are emerging, particularly with the
combination of cloud services and optimized apps. In particular, EFSS and activity streams
enable secure and social collaboration. These capabilities complement, or even replace,
traditional corporate email; wireless email has completely commoditized as any email
servers support it with native functions. Most enterprises complement native controls in the
email server with additional policies provided by MDM offerings. Regulated organizations
that require separation of corporate email from personal content prefer to work with secure
corporate messaging products based on container technology. Other relevant assets in this
area include real-time messaging apps, such as WhatsApp (mobile IM) and mobile
collaboration clients where multiple capabilities (for example, email and file sharing)
converge for simpler user experience.
Supplier Landscape
The enterprise mobility domain encompasses a range of technology areas and markets
characterized by players such as (exemplifying selection):
Mobility software infrastructure vendors: Microsoft
Mobile application platform and development tool vendors: IBM, Kony, SAP, Sencha
Public app store providers: Apple, Google, Microsoft, BlackBerry, HTC, Nokia, Samsung
Management and security: AirWatch by VMware, BlackBerry, Citrix, Good Technology, IBM,
MobileIron, SAP, Symantec, Sophos
Mobile collaboration, content and file sharing: Box, Citrix, Dropbox, EMC, Google,
Microsoft, Oracle
Service providers: Google, Facebook, Box, Roambi, mobile carriers and other service
providers
Some suppliers show great vision in understanding and addressing technology trends (for example,
cloud, collaboration and social), already adapting their offerings to meet emerging demands and
drive innovation. Others tend to focus on short-term opportunities, and make very tactical moves. In
each category, multiple small and niche players struggle to gain market presence, particularly in
application platform and development tools, management and security. We expect competition to
get tougher in the next few years, possibly with acquisitions, changes of businesses and potential
failures. It is important to assess financial and customer references when choosing to invest in
smaller and niche players.
Advantage
Wearables
Definition: Wearables is a generic term for a rapidly emerging class of mobile devices that can be
worn on the body. Examples include smartwatches (for example, the LG G Watch), smart eyewear
(for example, Google Glass), and even smart textiles (or "e-textiles"), which are worn as a garment.
Common uses include personal health and fitness applications, "glanceable" and ubiquitous
computing, and a nascent market for augmented reality applications.
Trend Analysis: While the consumer domain is the primary focus of most wearables on the market
today, enterprises are showing a growing interest in these technologies for a variety of potential
uses. Some organizations in industries with field service, machinery operators, maintenance or
other workers that require both hands free to perform their duties are beginning to investigate
smartwatches or eyewear for alerts and general messaging, or augmented reality applications.
Forward-thinking organizations with employees that work in hazardous environments are exploring
potential uses for health and environmental monitoring. In addition, as employees start to bring
personally owned wearables into the workplace, enterprises are beginning to think about the
potential impact to security, wireless networks and BYOD policies.
Time to Next Market Phase: Two to five years.
Business Impact: Wearables are the next phase of personal computing. The almost limitless
possibilities to be derived from the nexus of mobility, social networks, cloud services and big data
magnify the potential impact of wearables far beyond their intrinsic computing capabilities. In the
coming years, organizations in all industries can expect wearable technology to be introduced into
their environments as personally owned devices brought by users into the workplace. As wearables
find their place as enterprise technology, individual business processes and, ultimately, entire
industries stand to be revolutionized by their application.
User Advice: Investigate whether and how users are utilizing personally owned wearables on
organizational premises and networks, and evaluate any potential impact to security, network or
BYOD policies. Explore potential enterprise use cases where hands-free alerting or "always
available" computing may have substantial impact, such as with field service employees, drivers,
machine operators and the like. Look into potential augmented reality applications, where visual
overlays or auditory cues could aid in working more efficiently, such as with a virtual schematic
overlay rendered on smart eyewear for a machinery maintenance technician. Update technology
road maps to include evaluation or anticipated adoption of wearable technology.
Selected Vendors: Google; LG; Samsung
Mobile Collaboration
Definition: A mobile collaboration client aggregates multiple functions pertaining to collaboration
tasks in a single client application, under one user interface (UI). Collaboration clients can have
different scopes, such as messaging-centric, aggregating telephony, SMS, email, IM, presence and
activity streams; relation-centric, aggregating phone contacts, social and network contacts; and
content-centric, aggregating file synchronization, sharing, access and collaborative creation. No
product integrates all possible functions today. Mobile collaboration encompasses the integration of
collaboration features on the client and server (or cloud services) sides.
Trend Analysis: Mobile apps can boost productivity and facilitate collaboration between
employees. However, apps, cloud services and content from various sources tend to accumulate
rapidly on a device. Over time, this accumulation increases complexity, progressively diminishing
the user's experience and the initial benefits. Mobile collaboration clients and services represent an
emerging solution to that problem.
First examples included messaging-centric clients developed on mobile devices as native hubs,
aggregating SMS, email, instant messaging, mobile messaging, contact details and presence. More
recent content-centric clients focus on simplifying content access, consumption and collaborative
creation through integration of sources and repositories, editing tools, collaboration and sharing
capabilities. Their mobile apps are combined with a cloud service that integrates back-end
repositories or other clouds. Some of these products can also use analytics from server
components to adapt data presentation in the client app to the user's behavior and preferences, for
a more effective experience.
No mobile collaboration client products integrate every possible function today, but in the future,
they will expand their scope. Leading offerings will encompass a broader range of collaboration
functions. Optimization of user interactions will be possible by exploiting analytics of content
consumption or collaboration patterns for each employee for example, to create
recommendations for content visualization and to personalize the application in real time.
Mobile collaboration technology is featured as a technology profile in a number of Hype Cycles
published in 2014.
Time to Next Market Phase: Two to five years.
Business Impact: A new generation of tools is developing that aims at progressively reducing
fragmentation by converging multiple collaboration capabilities under a unique client application
screen. The availability of mobile collaboration clients will raise mobile workers' productivity and
engagement within the workplace, and externally with customers and partners.
User Advice: Consider mobile collaboration technology with optimized mobile experience for
collaborative content access and creation. Implement appropriate controls to limit the risks of
security breaches and data losses.
Selected Vendors: AgreeYa Mobility; bigtincan; BlackBerry; harmon.ie; Showpad; Unify
Choice
Enterprise File Synchronization and Sharing
Definition: Enterprise file synchronization and sharing (EFSS) refers to a range of on-premises or
cloud-based capabilities that enable individuals to synchronize and share documents, photos,
videos and files across multiple devices, such as smartphones, tablets and PCs. File sharing can be
within the organization as well as externally (for example, with partners and customers), or on a
mobile device among apps. Cloud data storage, security and collaboration are complementary
features of EFSS offerings, to address enterprise priorities. On the client, these features are offered
through native applications, the file browser or the Web browser.
Trend Analysis: IT organizations are increasingly aware of security, privacy and compliance issues
originating from personal cloud services that are frequently used at work. However, users want
modern productivity tools to help them work more effectively, something IT has often been slow to
supply. BYOD accelerates this trend. While awareness of this phenomenon has grown, many
organizations are still in denial about the ongoing use of personal cloud services, or undecided on
what to do. But mature organizations are investing in EFSS capabilities to enable secure mobile
content sharing and productivity, to reduce risks and to improve productivity.
EFSS offerings include capabilities such as file synchronization and sharing, storage and backup,
native mobile apps, content creation and collaboration, and back-end server integration with
SharePoint and other corporate platforms. They provide security features such as password
protection, remote wipe, data encryption, data protection and digital rights management; and
management functions such as integration with Active Directory. Modern UIs optimized for mobile
use are key elements for acceptance. Storage options from leading vendors are increasingly
flexible, offering storage in the cloud as part of the service (public cloud model), integration with
existing repositories or third-party services (hybrid), or implementation as a separate repository on-
site (on-premises).
The EFSS market is crowded, with multiple players from areas such as mobility, storage and
backup, collaboration, content management, business applications and security. Some have stand-
alone offerings that organizations need to acquire through new purchases and suppliers
("destinations"); others offer EFSS as "extensions" to other IT products. Over the next three years,
the EFSS market will continue to grow and commoditize. By 2017, the EFSS market will be partly
absorbed into adjacent markets, such as collaboration and content management; a few destination
players will transform their EFSS offerings into broader ones that include collaboration, content
editing and creation, analytics, and mobility in the cloud.
Security and compliance risks may slow adoption in the enterprise. The cost of storage services
may also be difficult to justify versus existing on-premises infrastructure, especially for large
deployments. This may lead enterprises to increasingly prefer hybrid solutions.
EFSS technology is featured as a technology profile in a number of Hype Cycles published in 2014.
Time to Next Market Phase: Less than two years.
Business Impact: Enterprise file sharing will enable higher productivity and collaboration for mobile
workers who deal with multiple devices. Organizations investing in such capabilities will enable a
more modern and collaborative real-time workplace, reducing or avoiding the inherent
security/compliance threats of personal cloud services. The business benefits are increased
productivity and cost savings.
User Advice: Organizations with mobility and employee-owned device programs in place must
explore potential risks of personal cloud services, and consider deployment of EFSS capabilities,
which enhance mobile collaboration and user productivity with appropriate IT control.
Selected Vendors: Accellion; Acronis; VMware (AirWatch); Alfresco; Boole Server; Box; Citrix;
Dropbox; Egnyte; EMC; IBM (Fiberlink); Good Technology; Google; Hightail; Huddle; IBM; Intralinks;
Mezeo; Microsoft; Novell; OpenText; Oxygen Cloud; ownCloud; SAP; SugarSync; TeamDrive; Trend
Micro; Workshare; WatchDox
Tablets
Definition: A tablet is a device based on a touchscreen display (typically with a multitouch
interface), historically focused on the consumption of media, but increasingly viable as a general-
purpose computing device capable of an array of content creation and line-of-business-oriented
tasks. The device can facilitate input via an on-screen keyboard or a supplementary device, such as
a keyboard or pen. Some products support voice controls, and future products will support gestures
as well. The device has a screen with a diagonal dimension that is a minimum of five inches, and
may include screens that are as large as are practical for handheld use, roughly up to 15 inches. It
features wireless connectivity with Wi-Fi, third generation (3G) or both, a long battery life and
lengthy standby times, with instant-on access from a suspended state. Examples of tablets are the
Apple iPad, Microsoft Surface and Samsung Galaxy Tab.
Trend Analysis: The iPad originated a new category of mobile devices, one that has proven
disruptive for the handheld consumer electronics market: e-readers and portable media players, as
well as PCs. Tablets are available from many vendors, running a number of major operating
systems. Organizations have seen an increasing demand from their user bases, similar to what they
initially experienced with the iPhone, to connect the iPad and other tablets to organizational
resources in order to access email and other applications. Mobile application software vendors,
EMM vendors and security vendors support tablets. An increasing number of organizations are
replacing PCs with tablets for specific job functions that require a lighter-weight, easily portable, yet
powerful computing device. Examples include pharmaceutical sales, manufacturing quality control,
field service employees and healthcare workers, to name a few.
Time to Next Market Phase: Two to five years.
Business Impact: Tablets have found their place in the enterprise, and have proven viable
replacements for PCs in certain specific job areas. Knowledge workers increasingly utilize tablets as
a larger-screened, "grab and go" alternative to laptops for certain tasks. Tablets continue to move
into enterprise networks via BYOD as well. Tablets are enabling new business scenarios involving
employees and customers, where a simple touchscreen interface and immediacy can improve
efficiency, collaboration and client satisfaction.
User Advice: Plan for adoption and support of tablets, especially as noncorporate assets, to
support business activities and applications for employees, and to deliver content to end customers.
Look for opportunities to equip specific users with more task-appropriate tablets over legacy PCs
wherever mobility and improved portability are priorities, and legacy PC applications aren't a barrier.
Selected Vendors: Apple; Dell; Lenovo; Motorola; Samsung
Activity Streams
Definition: An activity stream is a publish-and-subscribe notification mechanism and conversation
space, typical of social networking. It lists activities or events relevant to a person, group, topic or
everything in the environment. A subscriber can "follow" entities such as other participants, groups,
topics or even business application objects to track their related activities. For example, a project
management application may add status information, while a physical object connected to the
Internet may report its state (for example, a tunnel reporting a lane closure). Mobile apps are
increasingly feeding activity streams, or aggregating feeds from multiple sources.
Trend Analysis: Activity streams are deeply connected to and enabled by mobile devices. Mobile
users interact with their communities, sharing content, publishing status or short texts (140-
character length) in real time. Twitter is the most successful example, with 500 million subscribers.
Activity streams are popular on Facebook and other social networking sites that aggregate user
activities from other online services where the user has accounts or contacts. Users can control
how much of their activity stream is available to other users. Activity streams are increasingly used
in business environments, with streams injected by people, as well as business applications (for
example, about business events). Activity streams are becoming a general-purpose mechanism for
personalized information dissemination.
Twitter's open nature is unsuitable for internal use within enterprises, or for confidential
communication with partners, leaving an opportunity for new offerings. Services such as
salesforce.com's Chatter, Microsoft's Yammer, VMware's Socialcast, and Socialspring provide
activity streams aimed at individual companies, and provide IT control and security. Activity streams
are rapidly becoming a standard feature in enterprise social software platforms. Enterprise-oriented
services support real-time communication and collaboration among employees, partners and
customers, building private communities associated with individual companies, and accessible only
by people working for that company. We expect to see consolidation in this market among the big
players during the next 18 months.
Time to Next Market Phase: Less than two years.
Business Impact: Enterprise-oriented services can help organizations promote real-time mobile
collaboration among employees, partners and customers.
User Advice: Experiment with enterprise activity streams for mobile collaboration initiatives to
contain costs and risks, accelerate deployment and demonstrate value.
Selected Vendors: BroadVision; Cisco; Citrix; Facebook; Google (Jaiku); IBM; Identi.ca; Jive;
Microsoft; salesforce.com; SAP; HootSuite (Seesmic); Sharetronix; Skype; Socialspring; Socialtext;
Twitter; VMware
Mobile IM
Definition: Mobile instant messaging (MIM) refers to the use of an online IM application
corporate or public with presence and buddy lists on a mobile device and a wireless network.
Sometimes, this can integrate voice and voice over IP (VoIP) services.
Trend Analysis: The adoption of MIM has progressed in different regions. Standards such as the
Instant Messaging and Presence Service (IMPS) protocol from the Open Mobile Alliance initiative
and Cisco Jabber on the Internet are driving interoperability despite the variety of IM approaches
and products generating fragmentation.
Devices ship with preloaded clients to connect to selected Internet IM services either proprietary
or public. Various mobile applications are available for selected platforms in respective app stores.
Apple's devices are equipped with iMessage, BlackBerry's devices with BlackBerry Messenger
(BBM), and Windows Phone devices with a Windows Live client. Android devices have a range of
messenger application options. MIM clients are available to connect smartphones with enterprise
collaboration platforms, such as Microsoft's Lync and IBM's Sametime.
Real-time mobile messaging services such as WhatsApp are rapidly growing and replacing
traditional IM services on mobile devices. Social networks are also increasingly converging with
mobile messaging, for example, the integration of WhatsApp messaging with Facebook's mobile
app after Facebook acquired the former.
Time to Next Market Phase: Less than two years.
Business Impact: There will be a broad impact on organizations with large mobile workforces,
because MIM is an enabler for enhancing real-time collaboration. For CSPs, MIM is an opportunity
to deliver a comprehensive offering around personal messaging in addition to SMS and Multimedia
Messaging Service (MMS). However, it is also a threat, as applications such as WhatsApp
Messenger and BBM continue to cannibalize the SMS revenue stream.
User Advice: Consider personal communication tools on mobile devices, such as IM, to help real-
time collaboration, and drive efficiency and productivity.
Selected Vendors: Apple; BlackBerry; CGI; Comverse; IBM; Microsoft; Nokia; Palringo; Tekelec
Cost
Java ME
Definition: Java ME is a version of Java designed for use in small devices, such as mobile phones.
Java ME is part of the related technologies that include definitions of profiles and configurations for
mobile application developers.
Trend Analysis: Mobile application developments for smartphones moved progressively away from
Java ME technology, into native or cross-platform development tools. Java ME fell into the Trough
of Disillusionment and off the Hype Cycle in 2011. This technology was used with S40, WM6.x and,
more recently, Asha devices, for application development. In fact, Java ME used to be and still is
the de facto programming standard for feature phones that do not support HTML5.
All those platforms are obsolete now, and today's dominant OSs such as Android, iOS and
Windows Phone do not support it. Therefore, Java ME is approaching end of life at this point,
however it will remain in the market for several years.
Time to Next Market Phase: Less than two years.
Business Impact: The expected Java ME effect on business was scalability of mobile applications
through standardized, OS-neutral application interfaces for wireless devices. Java ME also
promised widespread inclusion by handset vendors. It has had niche market success, and now it
has been replaced by mobile Web technologies. While Java ME is approaching end of life for the
predominant uses it has been put to in the past, it's small footprint may see it find renewed life in the
Internet of Things.
User Advice: Consider mobile Web application development technologies and MADP offerings
now.
Selected Vendors: IBM; Motorola; Nokia; Oracle; BlackBerry
Replacement
No assets in this phase.
12 September 2014
G00263281
Summary
Table of Contents
Analysis
Research Highlights
Figures
Analysis
A budget is a management tool for steering resources toward desired business objectives. A
budget is also a mechanism that is required in both the public and private sector, for the CFO
to demonstrate to independent auditors that the necessary internal procedures are in place to
control where money comes from and how it is used. The statement "Every budget is an IT
budget" evokes different meanings and connotations among IT and business professionals.
The extremes among these are:
IT has become so ubiquitous that it is no longer necessary for the enterprise to
maintain a central IT budget; therefore, control for IT spending should be distributed
throughout the enterprise.
IT has become so ubiquitous, and the IT department understands how to manage this
technology better than any other department, so the CIO should control all IT spending
and, therefore, have influence over all departmental budgets throughout the enterprise.
As with most extreme views, neither of these has broad applicability, leaving the best approach
somewhere in between. But how should this ubiquitous resource, in all its new forms, be
managed, and how should control over IT spending be distributed throughout the enterprise?
The research for this special report uncovered areas that can be exploited to gain competitive
advantage during the next few years, as developed economies enter the age of digital
business. These areas include both opportunities and threats that are managed best by
assigning responsibility to those functions within the enterprise with the most capability and
experience to deal with them. Rather than the extremes listed above, the optimal distribution of
responsibility results in a balance between the IT functions and virtually all other business
functions.
1. Looking for historical precedents: How were responsibilities for technology spending
distributed previously during periods of significant technology-driven disruptive innovation,
and what were the results?
2. Recognizing that not all enterprises use IT the same way, and not all enterprises will be
affected by the transformation to digital business in the same way.
3. Making clear our findings and recommendations through the use of technology
definitions designed to help in distributing budgetary responsibility for these technologies.
The goal of this special report is to provide guidance on distributing budgeting responsibility for
IT in the age of digital business that will enable competitive advantage. Figure 1 provides a
conceptual diagram of how this can happen.
Figure 1. Gaining Competitive Advantage by Properly Distributing IT Budgeting
Responsibility
Gartner's Hype Cycle is represented by the red curve in Figure 1. The Hype Cycle can be
applied to the transformation to digital business. The phases of this transformation are shown
along the X axis. These phases have been repeated over and over again with all technology-
driven innovations. The Hype Cycle can also be applied to the macroeconomic periods of
disruptive innovation for example, the advent of the PC in the 1980s, client server
computing in the 1990s and e-business in the 2000s. There were similarities in each of these
periods regarding how responsibility for technology spending was distributed. During the first
two phases of the Hype Cycle, spending was driven by non-IT business functions. Marketing,
product development, operations, HR and even finance made many of the acquisition
decisions during the Trigger Innovation and Peak of Inflated Expectations phases. Within one
to two years of the cycle, as modifications, maintenance and integration issues began to
surface, these business functions began to look to the IT department for support. The lack of IT
involvement, followed by the inheritance of ongoing support, resulted in waste: redundancy,
incompatibility, obsolescence and an unnecessarily high total cost of ownership (TCO). These
were the primary reason for the next phase of the Hype Cycle the Trough of Disillusionment.
The objective of this report is to learn from these major periods of disruptive innovation of the
past by distributing responsibility of technology spending appropriately, in order to minimize the
waste and achieve competitive advantage as shown by the green curve in Figure 1.
Key to making this happen in the current period of disruptive innovation is an understanding of
the technologies needed for the transformation to digital business. By defining and
understanding these technologies, proper distribution of budgetary responsibility can be
achieved (see Figure 2).
The vertical rectangles contain the various technologies: digital marketing (DM), the Internet of
Things (IoT), operational technology (OT) and traditional IT. What is common among all of
these technologies is summarized in the horizontal rectangle.
Each of these technologies is fully defined and explained in "Define Digital Technologies to
Decide Who Budgets for Them" (see below). Proper distribution of budgetary responsibility is
facilitated by sharing and understanding the definitions for all five of these technologies with
the management team of our enterprise. We use these definitions throughout the research
documents that comprise this report to provide prescriptive advice on how this distribution of
responsibility can be done to promote collaboration among all the business functions involved.
Research Highlights
The following is a brief summary of the research documents that make up this special report:
This research features the definitions and explanations of the five technologies used in
digital business.
"Opportunities and Threats When Every Budget Is an IT Budget" Kurt Potter, Richard
Hunter
Big change always involves both opportunities and threats. This document introduces
and explains those provided by the transformation to digital business.
"The Four Futures of IT When Digital Business Makes Every Budget an IT Budget" Bill
Swanton, Michael Smith
The transformation to digital business will not be the same for all enterprises. This
research presents four possible futures, and how responsibility for budgeting IT should be
distributed in each one.
"How CIOs Influence Decisions When Every Budget Is an IT Budget" Cassio Dreyfuss,
Michael Smith
In addition to the four futures, cultures and work patterns vary among enterprises. This
research explores how culture influences the distribution of responsibility for IT budgeting.
Gartner has done significant research on how marketing uses technology. This
document shares the key findings from that research, and is written from the marketing
perspective.
For years, Gartner has published research on how capital-intensive industries use OT,
and the role the IT department has played as OT becomes more IT oriented. There are
lessons learned in the evolution of shared responsibility that can be applied to other forms
of technology.
"Every Budget Is an IT Budget, but What About the Public Sector?" Jerry Mechling,
Michael Smith
Budgeting is as important in the public sector as it is in the private sector, but there are
differences. This research presents the findings of this special report specifically for the
public sector.
"CIOs Should Let IT Asset Managers Win Them More Budget Until Digital-Business
Governance Improves" Stewart Buchanan, Michael Smith
In order to avoid the waste that resulted in previous periods of disruptive innovation,
CIOs can use IT asset management concepts (for example, IT life cycle management and
TCO) to "earn" budgetary responsibility for the technologies used in the transformation to
digital business.
Some documents may not be available as part of your current Gartner subscription.