There's a new enterprise stack coming and the most favored vendors are likely to be reshuffled in the next two to three years as tech buyers reevaluate their priorities. Here's the challenge: IT leaders will have to make bets very carefully.
Unfortunately, you'll need a crystal ball to predict what tech giants thrive and dive. In the meantime, don't get locked into a vendor that won't be able to be an innovation partner too.
That reticence comes through in our most recent CXO survey from Tech Pro Research. The data from more than 400 IT leaders is cut multiple ways, but the takeaways for me come down to priorities are shifting and tech buyers are already betting on who will be key in the next generation stack.
Here's a look at the challenges ahead:
And what tech buyers think about key vendors going forward.
Note that EMC repeatedly came up as a vendor that'll be less important in the future. Dell, IBM, Red Hat and Salesforce weren't fall behind. Microsoft, VMware, Cisco and Google were increasingly seen as relevant.
Those findings highlight a IT vendor pecking order in flux. We don't know what the next-gen IT stack will look like, but we sure can make some educated guesses. I started with a list that revolves around tech vendors that are growing at a rapid clip. I also skewed toward vendors that could be disruptive and stay independent. To round out the list, I consulted my fellow Enterprise Irregulars.
One common theme: The big enterprise tech vendors are seen as risky bets in some ways. There are questions about whether they can innovate fast enough. There's also an undercurrent among tech buyers that smaller vendors are safer if only because they can be large customers with a say.
The game here is simple. If a vendor can be relevant, dependable and innovate with some forward thinking, it'll win in the enterprise.
With that backdrop here's a look at some key vendors that are likely to get some play as the next-gen tech pecking order forms in the next two to three years.
The emerging enterprise behemoths...
- Salesforce: Despite a relatively poor showing in our CXO survey---a development that could be a warning sign in the future---the company is covering all the bases for revenue generation. Customer service and support, marketing, sales force automation . The company is also building a potentially dominant platform. Here's the rub: The reality is that Salesforce has a cloud model, but could wind up simply with a new way to lock in customers. Salesforce can move quicker, but ultimately may resemble rivals Oracle and SAP.
- Workday: With HR and financials covered, Workday bills itself as the enterprise resource planning vendor for the service economy. The company's growth is strong and customers give the vendor high marks. Oracle and SAP counter that they are bigger cloud players, but girth may not be a selling point for IT buyers anymore.
- NetSuite: The cloud enterprise resource planning vendor is gaining share and growing rapidly. NetSuite's playbook revolves around two-tier ERP and landing international subsidiaries as customers. At some point, cloud ERP becomes the de facto first option. Here's the catch though: Larry Ellison owns nearly half of NetSuite. It's not a huge stretch to assume NetSuite ultimately becomes part of Oracle.
- ServiceNow: Here's a company that took a relatively stable category---IT service management---and broadened it to other processes. ServiceNow is landing customers across multiple fronts and could become a key staple in enterprises.
- Splunk: The Internet of things will be big and Splunk is riding the data and analytics boom. Splunk made a splash with CIOs a few years ago and is seen a s a key analytics vendor. The challenge for Splunk will be to evolve its user experience to hit the business leader sweet spot. Over three years, IT leaders see analytics and big data as the third highest priority. There will be multiple players in the market.
- Cloudera and Hortonworks: Both companies have leading Hadoop distributions and are moving beyond batch processing of data into more mainstream analytics. The catch is that both are likely to be part of another large vendor at some point---perhaps Red Hat.
- Palo Alto Networks: The company is the lead dog of a series of next-generation security vendors. Consider Palo Alto representative on what could be a handful of vendors ranging from startups to current players such as Fortinet, FireEye and others. IT security surfaced as the top priority for IT leaders over the next three years, but I question the commitment. A series of retail breaches at Target and a host of others have colored thinking about security. Yes, security has become a boardroom issue, but once attacks die down interest will decline.
- Marketo: Everything becomes marketing when revenue generation becomes an enterprise's primary focus. Marketo is one of the few independents in the marketing space. As a result, the company has the thought leadership and offerings to do well in the next-gen stack. It also doesn't hurt that chief marketing officers control a nice chunk of tech spending.
- Nutanix, Pure Storage and/or Tintri: The common thread between all of these players is storage disruption. Nutanix and Tintri are about software defined storage. Pure is about solid-state enterprise class systems. The major takeaway is that your storage vendors are in flux. EMC scored low in our survey and NetApp has embraced the cloud more. Rest assured that both EMC and NetApp will be in your stack three years from now, but all of the noise may be made by a vendor that you haven't explored yet. See:
- Docker: Docker is an alleged VMware killer that has an open platform to run build, ship and run distributed applications. The company has buzz and could be disruptive by enabling multiple clouds. The Docker story is just starting, but if you fast forward three years from now the company may be a real enterprise player.
- MobileIron: Some enterprise mobility management vendor will emerge as a key leader. Today, MobileIron and VMware's AirWatch appear to be putting some distance between the pack, according to analysts. I'm going to bet that over the next three years that a focused mobility player from a platform or stack of other stuff to sell will matter to IT buyers. Good Technology could be another option for the independent mobility play.
- RightScale: Cloud management is going to become a larger issue and while it's debatable whether cloud brokers will emerge as a independent business there's a real need to swap services easily.
- Amazon Web Services: The company is the biggest infrastructure as a service vendor and in a serious battle with Microsoft and Google. AWS will continue to do well as the market expands.
- Stratasys: 3D printing and on-demand manufacturing will be an operations priority that'll blend into IT. It's safe to say that some 3D printing option will be in your enterprise as part of a broader stack. 3D Systems could be another option. Both have the scale and size to get enough share to fend off HP's arrival in 2016.
Units in big vendors that'll matter...
Although those aforementioned enterprise players have a good shot at gaining enterprise share, it's not like your existing providers are going to disappear. In fact, it's quite possible that enterprise giants today can maintain wallet share with different products, services and units even as other divisions falter. Here's a look:
- Microsoft's Azure and cloud stack. Azure is the primary example of how a large enterprise player can use its existing stack as a bridge into a future one. Microsoft is an enterprise juggernaut that isn't going away. Sure, Windows may have its peaks and valleys, but it's hard to argue that Office 365, Windows Server and SystemCenter are all going to remain strong and have hooks into Azure.
- Google's Cloud Platform. Google has recently started becoming more aggressive with its cloud infrastructure services. In the enterprise, Google's cloud infrastructure moves should be watched closely---if only for leverage against your other service providers. Google Apps remains viable for the enterprise too.
- IBM's Watson and SoftLayer units. IBM has stepped on the cloud gas, but it's unclear whether there is room for four infrastructure players. I'm more optimistic about the future for IBM's Watson unit, which could usher in the next generation of computing. Today, Watson is hard to scale, but IBM is making the technology easier to digest. In two to three years, Watson is likely to be a real analytics option.
- EMC's VMware and VCE. EMC is a storage vendor, but it's also a holding company that has a federation of options. VMware will be disruptive in networking and VCE gives EMC some real converged infrastructure leverage. VMware will be a force in your stack two to three years now and has been able to embrace and extend new technologies. VMware could do the same with Docker's approach.
- Cisco's UCS unit. The future of the router---is the server. Cisco has gone from nowhere in the server market to No. 4 and growing. Cisco has a strong converged infrastructure story, covers more of the market now and can be disruptive even as it protects its networking turf. Cisco's Internet of things unit is also a must watch.
- Intel's Internet of things division. Intel is best known in the enterprise for its server processors, but its Internet of things unit, which works with retailers and other verticals is likely to be of use to corporations going forward.
- HP Inc.'s . Yes, HP is late to the 3D printing party, but can still catch the meat of the growth in the market. And if HP's technology lives up to its advance billing, it can garner an ecosystem and hit the ground running. HP Enterprise's Moonshot business is also worth following because specialized ARM servers can be disruptive in hybrid data centers.
There are other enterprise giants with units that may matter in two to three years. SAP's HANA business, Oracle's cloud unit, Citrix's Zenprise offering, Lenovo's server division and Dell's software efforts warrant a mention. Bottom line: Think of your large vendors as a series of divisions that aren't created equal. Some units may be worthwhile even as you resist the cross-sell and lock-in pitches.
Vendors to put on your watch list...
Multiple vendors surfaced as enterprise options including established players such as Box and Dropbox. I left both off the emerging enterprise behemoth list because cloud storage and collaboration is likely to be a feature in two to three years instead of a standalone business---especially with Amazon, Google and Microsoft ratcheting down storage pricing.
Here's a list of vendors, many of them playing in analytics, to put on your watch lists:
- Adaptive Insights
- Cornerstone on Demand
- Host Analytics
- New Relic