CompTIA evaluates trends for its IT
Industry Outlook based on their recent or imminent impact. For developments that are just
emerging, or trends that are still on under the radar, Buzzwords Watch provides a glimpse of terms
that could gain traction. Of course, many will also
Note: CompTIA’s Buzzword Watch is not
meant to be a formal, quantitative assessment of trends, but rather an informal look at interesting
concepts that may be worth paying attention to in the
year ahead. See Appendix for larger version.
Moving Beyond User Interface: User Experience Drives Technology Initiatives
Trend: As technology becomes increasingly important to all facets of business, efforts will
intensify to provide better and better end-‐to-‐end user experiences (UX). Some of these efforts will be
‘pushed,’ whereby technology providers or employers want to encourage or influence certain user
behaviors. Other initiatives may result from ‘pull,’ whereby users accustomed to user-‐friendly
consumer applications will exert influence over corporate IT to replicate those same experiences.
These efforts will need to go well beyond user interface (UI). Technology providers and
organizations will have to factor in elements such as mobile, cloud, data, social, and more.
Drivers/Opportunities: While difficult to quantify, it is a generally accepted premise that
technology capabilities are underutilized. Organizations may have a small number of power users that are able
to fully leverage advanced features and capabilities, but the average user may tap into only the
basics of a computer, mobile device, software, system, or mobile app. One important driver of the
UX trend is the desire to get more out of technology investments. Improving user experiences
through more intuitive designs, work flows, and support mechanisms pays dividends in not only
higher satisfaction and utilization rates, but also higher levels of productivity. And, this is not
limited to UX in the traditional sense of applications. It applies to services and workflows as
well, such as the delivery of healthcare, government services, or managed IT services. With the
advancement of innovations such as those
referenced above, organizations will have many new avenues for improving user experiences.
Counter trend: Achieving optimized UX means getting a lot of things right. When faced with tight
deadlines and budget ceilings, UX goals may revert back to UI-‐centered approaches focused on
wireframes, cosmetics, or feature sets. The trickier elements of UX involving orchestration across
platforms, or the streamlining of workflows, may be too difficult for some organizations to manage
without outside expertise. Moreover, there is the inherent tension of the innovators dilemma. That
is, listening only to the customer is not a guarantee for attaining desired UX outcomes. Customers
may request features or experiences within the range of what they know, oblivious to next
Tech Policy Gets a Seat at the Presidential Election Issues Table
Trend: The early stages of the 2016 presidential election have featured plenty of fireworks and
eyebrow-‐raising antics. As serious policy discussions ramp up, expect tech policy to take a more
prominent place at the issues table. While technology has been critically important to the U.S.
economy over the past two decades, discussions of tech policy during previous election cycles
remained largely in the background. With a number of high profile, high impact issues up for
debate, the stakes for tech
policy will be higher than ever.
The rapidly increasing importance of all things related to cybersecurity, which
includes topics such as privacy, surveillance, lawful hacking, cyber-‐espionage, state-‐sponsored
cyber-‐ attacks, and the cybersecurity talent pipeline, requires attention on many fronts.
Candidates will be expected to take positions and convey their vision. Secondly, tech policy will
have an even greater impact on commerce. Issues such as patent reform, trade restrictions, and
the rules governing disruptive business models such as Uber or AirBNB will require intense debate
and the weighing of the benefits to society versus the cost to those displaced or negatively affected by innovation. Lastly, emerging
such as autonomous vehicles, drones, IoT, and artificial intelligence loom large as regulatory
bodies have a number of thorny issues to work through. The companies creating and supporting these
innovations, as well as industry consortiums and trade associations representing these sectors,
will have an important role to play in guiding policymakers through the many intricacies of these technologies.
Tech policy is complicated and nuanced. It almost always involves a set of fairly
predictable variables, along with many more unpredictable ones. Add in the incredible speed of
change across the tech landscape and it makes for a challenging environment for policy makers,
regulators, and private sector stakeholders. Even when consensus forms around identifying tech
policy problem areas, there is typically nowhere near a consensus on the solution. While a number
of signs point toward more meaningful tech policy discussions during this election cycle,
complicated and nuanced topics can
quickly take a back seat to other issues.
Digital Business Encompasses More than IT
The notion of elevating technology discussions to C-‐suite and boardroom levels of importance
has been percolating for some time. As with many aspects of innovation, however, advances on this
front occur in fits and starts, often taking longer than expected. With technology-‐driven
business transformation now mission critical for so many organizations, expect ever greater numbers
of CEOs and boardrooms to finally embrace their role of ensuring these strategies are fully baked
into the DNA of the business. Realizing maximum benefits from these transformational opportunities
requires efforts that go
well beyond the IT department.
Cloud computing, mobility, big data, automation, and social technologies have
reshaped businesses large and small over the past five years. According to CompTIA research,
adopters of these innovations move through four distinct stages on the path toward optimization.
The early stages of experimentation and non-‐critical use are typically ‘sandbox’ type
initiatives limited to specific functions or departments (e.g. implementation of a SaaS-‐based
project tracking tool for the marketing department). The maturing of these emerging technologies
coupled with process enhancements and the building of internal skills put many organizations in
position for the final stages of full production and digital transformation. Because these steps
often entail re-‐architecting legacy systems and processes, the degree of difficulty can be quite
high. For IT solution providers and vendors, opportunities beyond the technology itself will
revolve around integration, customization, business process automation, and consulting services.
The degree of difficulty increases with each step along the digital business
transformation ladder. It’s not uncommon for progress to stall as organizations encounter
unfamiliar technical or process challenges. Additionally, there will always be a segment of CIOs
resistant to change, as well as a segment of C-‐suite executives lacking the expertise or vision
to develop and execute on a digital business strategy. At the other end of the spectrum is the
segment of companies that see little value in remaking their business as a digital business. In
some cases, this may be a completely rational decision, such as for a profitable company with a
stable base of customers, and a degree of insulation from market disruption. Although as seen time
and again, things can change rapidly and by that point it may be too late to react.
Organizations Aim to Develop More Tech Talent In-‐house
As companies continue to work to get the right mix of technology to achieve their business
objectives, they will also seek to get the right mix of tech talent. The past few years have seen
robust growth in nearly every category of IT occupation. Heading into 2016, Burning Glass
Technologies reported slightly over 800,000 postings for IT job openings (see Section 1 for details
and caveats). While the IT industry itself remains the largest employer of IT workers, industries
across the U.S. economy have ramped up their investments in internal software development, IT
support, cybersecurity, data analytics, and related skills. As noted in the previous trend,
realizing the full benefits of digital transformations requires the coordination of many moving
parts. While third party experts, such as solution providers and managed services providers, will
continue to be a part of the mix, many organizations view the further development of tech talent in-‐house as a strategic imperative.
During September 2015, Fortune 500 retailer Target announced it was reducing
its reliance on IT outsourcing – primarily in the area of software development, and bringing 1,000+
new IT workers on staff. The firm cited the need for greater speed and agility, as well as the
advantage that comes with having staff that know the business inside and out. Granted, this is only
one example. However, it does provide a frame of reference for understanding some of the factors at play.
Another component of this trend as confirmed by CompTIA research is the desire of business
executives to shift more IT budget and staff time to innovation, reducing the sometimes-‐heavy
outlay for managing routine IT operations. This may entail working with a managed services provider
to help with monitoring IT infrastructure, freeing up the company to develop in-‐house tech talent
through hiring, training, and certifications with an eye towards innovation and business objectives.
Counter trend: According to the U.S. Bureau of Labor Statistics the unemployment rate for IT
occupations is nearly half of the national rate (2.6 vs. 5.0). Demand for many types of tech skills
greatly exceeds supply. While there can be significant variance in tech occupation wages due to
location or specialization, the general trend points to higher labor costs; which only makes sense
given the ROI companies earn from high performing IT professionals. For these reasons, even when
small and mid-‐size businesses want to expand their internal IT capabilities, they may be unable
or unwilling to make the necessary investments to land sought-‐after candidates. Beyond hiring,
many organizations will also pursue a strategy of further leveraging existing IT staff through
training and professional development. This approach poses similar challenges in that it requires
resources and time – two constraints that can
quickly derail plans.
Cloud is the New Electricity
Cloud computing has been a dominant force in the IT industry, thanks to the way it has
transformed IT operations and technology strategies. Companies have considered many
cloud-‐specific aspects of business systems, from migration to integration and security. As the
questions around cloud are answered and the benefits are becoming obvious, businesses are adopting
a cloud-‐first strategy as they plan new technology projects. In time, this will drive “cloud” to
the same place as “electricity” or “Internet”—so prevalent that it becomes a standard part of any
planning. On the front end of the computing spectrum, mobile devices will follow a similar pattern.
The ultimate goal is the complete solution.
The fear of cloud computing has diminished greatly. Even government agencies,
a segment that initially had great concern around cloud, have adopted a cloud-‐first mandate.
Companies recognize that cloud systems offer benefits far beyond potential cost savings (which may
not even materialize depending on the application). Flexibility, maintenance,
and—surprisingly—security are all reasons that companies utilize cloud components, and widespread
adoption will soon drive cloud systems to simply be the systems of record.
Counter trend: Heavy investments in cloud products and advertising along with continued questions
from late adopters will keep many cloud-‐specific discussions going. In particular, monitoring and
management of a multi-‐cloud architecture will be a challenge for many companies. As companies
move into later stages of adoption, other issues will also come up, such as movement between cloud
providers or restructuring of workflow to take advantage of cloud applications and mobile devices.
These cloud discussions will continue to highlight differences between modern cloud systems and
other infrastructure options.
Companies Go On the Offensive with Security
The mindset around security has been shifting in recent years due to a number of factors, such as
the adoption of new technology models and the reliance on digital data. This year, ongoing security
breaches across a wide range of industries and companies will add a proactive element to the
security approach. Companies will increase activities such as penetration testing, external audits,
and end user evaluations that lead to investments in new security training platforms. As metrics
are developed around these areas, companies will also begin to publicly disclose the results of
their tactics. As the security balance shifts further away from prevention and more towards
detection, active measures will be needed to keep ahead of the curve.
Drivers/Opportunities: All the security breaches making headlines in the mass media reveal the
changing nature of IT security: attacks now happen for a variety of reasons (rather than primarily
focusing on financial information or IP) and target companies of all sizes (rather than focusing on
large enterprises). In the digital economy, corporate reputations are at risk if best security
practices are not followed. Most major security breaches have not yet exploited cloud systems or
mobile devices, so the threat landscape will continue to change and companies will need proactive
focus to maintain a secure position.
Counter trend: Security defenses can’t be ignored as companies build new offensive practices. Most
companies view security defense as a technology pursuit, with firewall and antivirus as the main
weapons. These remain critical pieces for on-‐premise data and corporate devices, and companies
must also consider tools such as Data Loss Prevention (DLP) and Identity and Access Management
(IAM) as they adopt cloud and mobility. Before setting up a technology strategy, companies must
determine their policies on security and perform risk assessments. Once all the pieces are in
place, the proactive evaluation and testing can begin.
The Chase for Analytics Heats Up (Again)
Big Data first came on the scene a few years ago, but there is renewed interest in gaining insights
from data and making data-‐based decisions. The competitive advantage gained from intelligent use
of data has separated early adopters from their counterparts, and everyone wants to quickly follow
suit. The spectrum of data tools includes initial storage and the processing stage, but analytics
and visualization will be the dominant areas of interest.
Drivers/Opportunities: After the initial burst of enthusiasm, the Big Data trend saw some backlash since
many companies did not have data management practices that allowed them to adopt newer tools for
storage and analysis. The situation has improved, with companies getting their data in order and
being more ready for new adoption. Companies without strong data practices have also realized that
existing data tools can help them improve their analytics capability without having to explore the
cutting edge. Finally, the concept of abstraction driven by cloud computing has led to a greater
degree of accessibility, especially for the end goal of analytics and visualization that so many companies are interested in.
Counter trend: The ability to access certain analytics tools does not replace the need for end-‐to-‐end
data solutions. As with cloud computing, companies can gain some level of benefit from initial
adoption of these tools, but the full benefit will only be realized with a comprehensive approach.
Many companies still have data silos and need to perform data audits to determine their starting
point. From there, improvements to data storage, backup, monitoring, and policies will strengthen
any existing analytics activity.
The Software Layer Gets Much More Attention
The definition of software has changed, as the concept of packaged applications with licenses is
moving to an app or SaaS model. The importance of software has also grown, as manual, paper-‐based
processes are replaced by digital equivalents. To build a digital workflow, companies are quickly
recognizing the need for some level of development to customize or integrate applications. In turn,
development efforts are being streamlined through the use of PaaS environments and containers that
allow for greater app independence. Integration also hints at the growing demand to virtualize and
automate infrastructure. More programming skills are needed as companies pursue software defined
data centers (SDDC) or, at the very least, a higher degree of automation.
Hardware is still the foundation for IT systems, but in a different way than ever
before. Companies are owning lower percentages of their hardware infrastructure as they move to the
cloud, and the infrastructure that exists either on-‐premise or in the cloud is increasingly made
of commodity components stitched together virtually. APIs are the key to accessing this new
infrastructure and providing applications. As more applications make their way to mobile devices,
businesses are investing in mobile app development to make custom adjustments for their specific purposes.
Hardware is not going away anytime soon. Very few companies will take 100% of their
architecture to the cloud, choosing to keep some systems local for security, performance, or other
reasons. The major hardware activity, of course, is taking place at the end user level. While BYOD
has not taken over to the degree that was once expected, many employees still use personal devices
and create security concerns that must be addressed. Regardless of a company’s stance on BYOD, the
diversity of choice in end user hardware is a challenge in managing support and user experience.
Add in the fact that Internet of Things is turning everything to a computing device, and the need for
hardware skills is likely to remain very strong.
Vendor Partner Programs Strive to Reach Escape Velocity
In a cloud-‐based “as-‐a-‐service” world, the main source of channel profit – vendor margin – is
changing. In many cases, vendor-‐provided margin now plays second fiddle to what the partner earns
on his or her own raft of services. And with more channel firms calling consulting services their
primary business model, this trend will only continue. As a result, vendors need to be thinking
differently about partner program compensation models, which run the risk of becoming antiquated if
not updated to reflect how partners make money today. Staples such as upfront discounts and
back-‐end rebates are declining in relative importance to channel partners while newer cloud
vendors with no heritage in legacy hardware or software are wisely building partner programs that recognize this.
Forty-‐eight percent of US-based channel firms recently described the state of
their vendor relationships as either “exploratory” or “shifting,” which means they are taking a
look at new vendors to work with or they have made a definitive switch already. Cloud has a lot to
do with this, as new, more nimble vendors have emerged and are beginning to build out indirect
channels. How the channel makes money from cloud solutions – recurring revenue, referral fees,
consulting – has them rethinking the value of some of the more conventional ways that vendors
structure their programs and financial rewards.
Counter trend: Many business models in the channel will continue to rely on traditional arrangements
with vendor partners, including placing a high value on vendor-provided margin on product and
services. While half of the channel might be evaluating new vendors to potentially work with – or
have even dropped some old for new – it remains that a net 93% of them express satisfaction with
their most strategic vendors.
So Who’s a Vendor Anyway?
A range of factors is blurring the lines today between vendor and channel roles. For one, the
playing field of competitors has expanded beyond traditional vendors and partners to other
operators. Pure cloud players, telecom providers and digital agencies are now in the mix. There are
even corporations outside of the IT industry that could pose threats to traditional IT vendors.
Take the electric carmaker Tesla, for example. After trying mainstream ERP solutions, it decided
instead to develop its own, reasoning it would get a leg up on competitors. But what's stopping the
carmaker from offering that software as a tech product to other companies in others industries?
Likewise on a smaller scale, end-‐user businesses such as accounting firms are providing IT
services on their own too. And then there’s the channel itself. The public cloud is enabling some
solution providers today to create their own IP – chiefly SaaS applications, but also less
product-‐centric items such as proprietary methodologies and processes. Consider a recent CompTIA
study that found 6 in 10 channel firms expect considerable growth in their own custom application
development practices. This is notable in that app dev is a business line not typically in the
channel’s wheelhouse and one that carries potential for churning out IP.
The need for partners to differentiate and create their own brand is driving
much of this channel behavior in this regard. With cloud becoming a ubiquitous platform for
delivering IT, the playing field is leveling as to who is serving the customer. And the channel is
always looking for other sources of revenue; by developing their own products and/or services to
sell in conjunction with vendor brands or via the cloud, they both build up their revenue stream
and lock in customers that are happy with these solutions.
Counter trend: The great majority of the channel is not going to morph into a vendor and start peddling
its own IP. Relationships with vendors will continue to be crucial to the channel business model,
and will include selling both vendor products and services. In fact, CompTIA research finds that
many channel firms are moving to a predominantly consulting business model, which means they are
making referrals to their customers, advising on implementation strategies and such decisions as
on- versus off-premise. In this role, the channel serves more as an ambassador for various
vendor solutions and services and not a product-‐building competitor.
Skip the Data Center Build-out – Everyone Else Is
Face it, even Verizon and HP are reportedly thinking about throwing in the towel. And if players
of their size are considering an exit from the cloud data center business, it’s a good bet that
nobody in the everyday channel is going to fare better against the low compute pricing, scalability
and reach of the major public cloud providers. A better bet for the channel is to look toward
juggernauts in the market such as Amazon Web Services, Microsoft Azure , IBM and a few others as
the back engine for their own cloud solutions to end customers. Building out your own data center
thinking it a differentiator will be a
money drain and many partners are realizing this and skipping the internal NOC.
Drivers/Opportunities: Commodity pricing and scale. The average partner simply cannot expect to
compete with public cloud players that can drop pricing quarterly and manage thousands of customers
across a complex system of data center infrastructure. Amazon’s latest price cut was as recent as
the turn of the new year. Partners are better off taking advantage of those low prices as a
customer of AWS
versus a competitor.
Counter trend: Infrastructure decisions will continue to play a key role in the channel’s embrace of a
services-‐based business model. For those that have transitioned to managed services, for example,
operating a NOC is often a critical foundational piece. For those MSPs that are already running
their data center for current customers, it will be a logical step to provide cloud services from
that same infrastructure and not to scrap the capital investment. MSPs are not shut out from public
cloud usage, however. In fact, they are uniquely positioned to provide customers the best of both
worlds, a hybrid scenario where certain workloads and data sets reside in the public cloud and
others remain in private cloud mode in the MSP’s data center. This scenario is a win-‐win for
companies that have specific security or compliance mandates that necessitate the level of
oversight found in a private cloud set up, but who
also want access to public cloud flexibility and pricing for less security-sensitive needs.
Getting Closer to the Customer
Trend: Along with all the changes triggered by new technologies and platforms such as cloud and
mobility, the end customer is changing as well. The end customer today is quite likely to be the
marketing officer, for example. The end customer today often knows quite a bit about the technology
they want to buy and possesses a fair amount of leverage in terms of price transparency and deal
negotiation. The end customer knows that long-term contracts for managed services don’t follow
the more open-ended commitments that cloud-based solutions often entail. As a result, how
channel firms interact and appeal to end customers will need to adapt. This could mean more
business outcome-centric sales and marketing messaging to woo non-IT LOB buyers. Or it could
mean getting serious about specialization in a particular vertical to stand out to customers
heavily steeped in their own industry
Not to overstate it, but cloud has opened up new worlds for end customers.
They are growing accustomed to quick, easy access to free SaaS applications. Ubiquitous mobile
devices are in everyone’s clutch. Confidence about the ins and outs of technology among non-IT
workers is driving new types of decision-making around procurement. Buyers today want to know how
a technology will drive business outcomes, and they want fast, scalable access to services and
Counter trend: The “trusted advisor” is not dead. While cloud might have opened up new doors for end
customers in terms of what they demand from delivery models for IT or even pricing, cloud has also
added a layer of complexity in terms of choice. Myriad cloud solutions exist today – many from
vendor unknowns – and the channel is uniquely positioned to be a gatekeeper. From vetting cloud
solutions pre-purchase to managing them once implemented, many customers will continue to value
this type of relationship with a provider. Additionally, no matter how much end users think they
know about technology, there are always gaps. And security is the biggest one. CompTIA research
finds the No. 1 growth area channel firms expect over the next two years to be in the security
field – and that’s no