In-Depth

IT's 2014 Agenda: Platform Migration and Tighten Security

Migrating to new platforms such as mobile devices and the cloud, boosting security and new usage models such as social networking and analyzing big data in real time, will drive this year's IT initiatives.

• By Jeffrey Schwartz
• 12/23/2013

As every new year predictably brings an onslaught of out-of-shape people to the gym aiming to fulfill their resolutions to get in shape, the IT organization at XSport Fitness will get a workout of its own in 2014. The Chicago-based chain of upscale 24x7 fitness centers has kicked off an IT expansion effort. The company plans to upgrade its Windows XP-based PCs, select a tablet platform for trainers and other staff, digitize paper-based processes to comply with new heath care laws, integrate disparate systems such as point-of-sale and scheduling, and add storage to accommodate the new data this modernization will generate.

XSport, with 3,800 employees at locations in Illinois, New York and Washington DC, is in growth-mode with plans to open five new locations per year. CIO Tim Walter says XSport is looking to automate many processes to lower costs and improve service. "It's really about process improvement," Walter says. "We're looking at how to take out a lot of the redundant activities and do what we can do to automate this year."

Also looking to reduce redundancy is MB Trading, an online stock broker based in El Segundo, Calif. MB Trading plans to build a private cloud this year to eliminate one of its four datacenters. "One of our key objectives this year is to simplify our infrastructure and network," says William Floyd, MB Trading's chief technology officer. In addition to building out its private cloud, Floyd says MB Trading will replace its Windows XP desktops and Windows Server 2003 servers. It will also consider moving to a software defined network architecture.

IT Resolutions for 2014
Like XSport Fitness, Floyd says MB Trading will increase its IT spending this year. More than one third of Redmond magazine readers responding to an online survey last month plan to increase their IT spending in 2014. Nearly half (47 percent) will maintain last year's spending levels while 19 percent face lower budgets this year, according to the survey.

The biggest project facing IT decision makers this year will be dealing with PCs still running Windows XP. That comes as no surprise as on April 8, Microsoft will issue its final patch for Windows XP. Virtualizing more servers, upgrading network infrastructure, replacing aging servers, bolstering security and identity and access management are the other top priorities among respondents (see "What's On Your 2014 IT Agenda?").

Addressing the looming Windows XP deadline will be a priority for many this year. Others have no concerns about it nor will they upgrade or replace them. Only one third of respondents have replaced all of their Windows XP-based machines, while more than half (51 percent) have some XP systems, and 15 percent say most or all their PCs are still running Windows XP. Of those that plan to upgrade their aging PCs, a majority (52 percent) will go to Windows 7, while 14 percent will move to Windows 8. A small but vocal minority (7 percent) will stay on Windows XP despite the fact Microsoft will discontinue support.

Windows Server 2003 is also reaching its end of life, but organizations have another year to address that. Microsoft will stop supporting Windows Server 2003 in July 2015. Nevertheless, 65 percent of respondents still have Windows Server 2003-based servers, including XSport Fitness. "We'll move them to Windows Server 2012 R2," Walter says. Most respondents plan to upgrade their servers this year. Only 21 percent say they'll continue to run their existing server OSes. Although Microsoft only released Windows Server 2012 R2 in October, 50 percent will upgrade their systems with the new release, while 44 percent will go with Windows Server 2008 R2. Some are moving to Linux (14 percent) and 13 percent will migrate to a cloud provider (multiple responses were allowed -- see "Planned Server Upgrades?").

Microsoft's Transition
This will be a pivotal year for Microsoft. With a new CEO replacing Steve Ballmer this year, changes in Redmond are inevitable. Microsoft is fighting battles in numerous areas: It's competing in the multi-platform mobile world; holding onto its captive audience of Office and SharePoint users; keeping its foothold in the datacenter; and trying to achieve leadership in the new world of cloud computing and big data, despite formidable competition from Amazon Web Services, Apple, Google, VMware and the open source community.

Despite uncertainty over how Microsoft will fare in the next year or two, 26 percent are very optimistic and 49 percent are cau­tiously optimistic (see "Bullish on Microsoft Despite Company's Transformation"). Although 21 percent are either concerned or pessimistic, 4 percent are uncertain. Many IT decision makers are still evaluating what Microsoft has to offer compared to the numerous competitive options. For example, while XSport Fitness is considering Windows 8.1 tablets, Walter will also look at iPads and Android-based devices.

New Era of Enterprise IT

The combination of mobile, cloud, big data and social media are expected to dominate the technology agenda in 2014.

Analysts are predicting key areas of expansion for IT will include the move to private, public and hybrid cloud architectures; support for new classes of mobile devices including employee-owned PCs, tablets and smartphones; and supporting social networking.

IDC last month issued its forecast for this year, predicting IT spending will increase 5.1 percent to reach $2.1 trillion (not including telecommunications costs). IDC is forecasting a continued move to what it calls the "Third Platform," centered around mobile devices and a migration to cloud architectures. IDC also predicts substantially increased investments in enterprise social networking tools and technology that lets users mine big data.

"2014 will be all about battles across this platform," said IDC senior vice president and chief analyst Frank Gens in a teleconference last month. "The past five years of the third platform build out has been all about laying the infrastructure and developer platform foundations. This next chapter is about fostering an explosion of innovation on that foundation, with hundreds of thousands to millions of new killer apps and solutions."

Recalling Microsoft CEO Steve Ballmer's "developers, developers, developers, developers" rant from years ago, Gens emphasized that winning over developers will be critical for those who are going to survive in the coming decade. Ironically for Microsoft, winning over developers will be critical if it's going to be a player in the new mobile era.

Microsoft has about a year to win over developers or it will be doomed in the mobile market, Gens said. The good news is developer interest in the new Windows platform has risen by eight points, according to IDC's latest Appcelerator report. However, only 37 percent of developers say they are very interested in developing mobile apps for Windows. That's still 35 points below Android and 50 points below Apple's iOS. "Microsoft honestly needs to double that level of interest within the next 12 months, or it could be game over," Gens said.

It should come as little surprise that increasing tablet sales will continue to take a bite out of the PC market, which IDC expects will slide by six percent. Tablets will grow by 18 percent and smartphones 12 percent. Mobile devices will outsell PCs by 2.5 to one, according to Gens.

Cloud spending, which includes service providers, infrastructure and software, will grow 25 percent to reach $100 billion. More than one third (35 percent) of that spending will be on cloud service providers and shared hosting facilities. Just like mobile, cloud providers will fight for developers to support their platforms. "Over the next four years, we will see a ten-fold increase in the number of apps in the cloud, driven in part by a tripling of the number of developers and contributors to cloud app ecosystems," Gens said. "Two-thirds of these new apps will have an industry-specific or a role-specific focus."

IDC's 2014 IT Predictions Worldwide tech spending will reach $2.14 trillion -- a 5.1 percent increase over 2013, nearly one percentage point higher than last year's rise. Tablets and smartphones spending will increase 13 percent, account for nearly 60 percent of total IT growth. PCs sales will decline 6 percent. Next-gen platforms, which IDC calls the "Third Platform," will increase 15 percent, accounting for 29 percent of overall spending and 89 percent of growth. Cloud infrastructure software and services will grow 25 percent to $100 billion. Microsoft must expand share in mobile this year or it's "game over." Converged IT systems will account for 10 percent of all infrastructure spending this year, growing to 20 percent by 2020. Up to 30 percent of server shipments will go to cloud service providers this year, extending to 43 percent by 2017. Source: IDC, December 2013

With the amount of digital data growing 50 percent in 2014, users will create 6 trillion terabytes, or 6 zetabytes of data. That will fuel a 30 percent growth in infrastructure and tools to mine big data, exceeding $14 billion. IDC is also predicting that in the next three years, 80 percent of the most successful apps will leverage large data streams. Demand for big data and analytics skills will outstrip supply, Gens said.

While many enterprises continue to assess whether they'll see any value by investing in social networking, IDC predicts within the next three years, 80 percent of the Fortune 500 will use it as a key foundation for marketing, selling and maintaining community, up from 30 percent today. Social networking will also increasingly invade product and service development, according to Gens.

By 2016, IDC forecasts that 60 percent of the Fortune 500 will deploy social-enabled platforms, solutions that gather input from their communities of customers, partners and other components of their supply chains. To enable that, IDC predicts in 2015 the key social platforms will converge and merge with the major cloud platform-as-a-service (PaaS) clouds.

Walter doesn't want to be tied to a specific mobile platform, so he'll likely look at developing apps in HTML 5. "We really want to have that mobile Web flexibility so we can use anything," he says.

At MB Trading, Floyd doesn't have any plans to upgrade its employees' PCs to Windows 8 at least for another year. "We've already tested it out and it breaks too many things in our environment," he says. "A lot of our customers are moving forward with that, which our [online trading] products are compatible with, but we've got a lot of internally-developed applications and drivers that just aren't compatible, so we're sticking with Windows 7."

MB Trading has its share of Microsoft-based platforms, including SharePoint 2010 and Exchange. As it consolidates its datacenter and uses more cloud computing services, though, Microsoft's place in the datacenter will be more limited. MB Trading currently uses Amazon Web Services for added compute and storage services. Floyd says he's keeping an eye on Windows Azure, but is leaning toward a provider that supports OpenStack, the widely supported open source cloud computing platform. He's determining whether that meets its promise of service provider portability.

When it comes to hybrid clouds and virtualization, Floyd remains skeptical about Microsoft. "Microsoft is still too Microsoft focused," he says. "They need to open up and be more supportive of what the real world uses, whether it be Linux or Solaris or other flavors of Unix. If they took more of an IBM approach, that would be viable. I've got this heterogeneous environment, but I don't think I'm unique. I believe there are a lot of companies out there that are similar to mine where they've got legacy systems they've got to deal with so it's not necessarily an option for them to say `I'll jump on the Microsoft bandwagon, because I'm 100 percent Microsoft.' There are companies that are like that, but most companies have more of a heterogeneous environment."