Special Feature
Part of a ZDNet Special Feature: Tech Budgets 2018: A CXO's Guide

AI? Blockchain? Cloud computing? What technologies are CIOs really investing in right now?

There's a big difference between the most-hyped and most-needed technologies, as far as tech chiefs are concerned.

volocopter-dubai-drone-flying.png

Drones are very much on CIOs' radars, but are unlikely to reach mainstream usage anytime soon.

Image: Volocopter

Analyst Gartner recently unveiled its 2017 hype cycle for emerging technologies, which is often seen as a good measure of the technologies we can expect to see affecting businesses -- and their IT spending activity -- a few years from now.

So what did CIOs learn this year?

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Gartner says machine learning, blockchain, drones, software-defined security, and brain-computer interfaces have moved significantly along the hype cycle in the past 12 months. Yet that excitement is tempered by the fact that none of these technologies will be entering the business anytime soon.

Gartner produces a key alongside its cycle that outlines the likely date of impact. During the next two years, none of these emerging technologies will reach the so-called plateau of productivity, the last phase of Gartner's cycle, where systems and services reach mainstream adoption.

The point of a cycle for emerging technologies is that it attempts to highlight the huge amount of change that's set to impact the workplace in coming years -- and put an estimate on when it's (finally) likely to arrive.

And what it shows is that some of the technologies mentioned already dominate the marketing agenda, often at the expense of practical operational concerns.

My inbox is stuffed with research results and opinions on AI and robots. But CIOs are still grappling with the last huge change: the arrival of the cloud. And for many CIOs, the cloud is at the core of their spending strategy and more advanced technology is very much peripheral.

Putting the hype into a business context

Take artificial intelligence, the hot topic of the moment. Industry experts are keen to give their opinions on AI and how the technology is set to transform how we live and work, and recent research from consultant PWC estimates a third of existing jobs are susceptible to automation.

The robots, in short, are coming. But don't hold your breath waiting: the reality of the arrival of AI is likely to be a much more drawn out affair. PWC, for example, doesn't expect the impact on jobs to become manifest until 2030.

This research evidence is echoed in the day-to-day realities of the IT department. I spoke to CIOs recently about the impact of AI. Every executive recognised the potential power of the technology. Some CIOs were already using robotics to help boost productivity and performance in the workplace.

But real, on-the-ground implementations of AI are few and far between.

The same is true in the case of virtual and augmented reality. CIOs tell me they're interested in the technology. Some are even investigating how the systems and services might be used in their business. However, large-scale, enterprise-grade implementations are conspicuous by their absence.

The good news is that CIOs who are sponsoring early explorations in these nascent areas are, at least, working in line with Gartner's expectations and recommendations.

The 2017 hype cycle focuses on three emerging technology mega-trends: artificial intelligence everywhere, transparently immersive experiences and digital platforms.

Gartner says enterprise architects and technology innovation leaders should explore and "ideate" these three mega-trends to understand the future impact on their businesses. That's reasonable advice: when it comes to innovation, almost every CIO-focused article extols the virtues of experimentation.

Yet testing costs money. IT budgets, which are often constrained anyway, are under huge pressure. In this cost-sensitive environment, only a limited number of CIOs have the luxury of a fully-resourced R&D lab.

Fewer still can afford to take a punt on a hyped technology that might affect the business in five or more years -- or which might fail altogether.

It's worth remembering the average tenure of a CIO is around four years. Planning for the introduction of technology much further out than that is hard for any but the most visionary of executives. And in any case institutional memories are short, so projects that get going too early risk being long forgotten by the time the technology is actually ready for mass adoption.

So while innovation might sound tempting, most CIOs still focus much more closely on the operational requirements identified by line-of-business executives.

Value-obsessed organisations want IT projects that deliver quick, effective solutions to the challenges that line-of-business executives face right now.

Focusing on platforms for digital transformation

Those business challenges are closely connected to fears around digital disruption. Non-IT executives see the competitive advantages gained by fleet-footed rivals and they want technology investments to deliver similar benefits.

Add ever-increasing fears over cybersecurity into the mix and CIOs have little wriggle room for adventurous IT investments.

So rather than investing in AI and VR, most CIOs are concentrating on the technologies that provide a platform for digital transformation. That core focus on the platform is the most oft-repeated phrase in CIO interviews: innovations like AI and VR get a lukewarm reception, but cloud and big data are eagerly embraced.

The simple fact of the matter is that -- like it or not -- CIOs and their line-of-business counterparts are still fixated on the elements of IT that were so hyped a few years ago. The reason cloud and big data are still being talked about is that these technologies are only now reaching true mainstream adoption.

The hype surrounding the IT marketplace is some way ahead of CIOS' operational realities. When it comes to cloud computing and big data, we have finally reached that plateau of productivity. It's a sentiment that chimes with Chris White, CIO of global law firm Clyde & Co, who says IT trends often take longer to hit the market than anticipated.

"When the cloud first emerged, some people thought it was just outsourcing; others believed it represented a game-changing technology," he says. "I've always been a huge supporter of the cloud. Here we are, ten years later, and on-demand IT is a significant element of both the present and the future technology landscape."

And that, in many ways, is the key lesson: the technologies Gartner talks about in its hype cycle will take many years to impact most businesses. IT marketing folk who want to fit with CIO spending priorities must avoid focusing their attention too far into the future.

Innovation for most organisations is still likely to involve a cost-effective combination of cloud, big data and mobile. So, when it comes to communicating with CIOs -- and meeting their technology demands -- don't believe the hype.

Previous and related coverage

AI projects are taking off: What does this mean for the future of work?

CIO Strategies: How can CIOs prepare for the impact of artificial intelligence?

How can CIOs develop a business case for virtual reality?

Virtual reality is a hot technology, but can tech chiefs build a business case for using it yet?

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