Technalysis Research
Previous USAToday Columns

January 25, 2016
Biometrics is the latest shield against password hacks

January 6, 2016
Navigating the in-car tech experience

2015 USAToday Columns

2014 USAToday Columns

USAToday Column

February 17, 2016
Dark clouds over cloud services reflect pull of legacy technology

By Bob O'Donnell

FOSTER CITY, Calif. — Call it the mountain of inertia. Or maybe, the obstructions of legacy.

Regardless, the reality of how technologies get adopted — particularly in business environments — is often in stark contrast with popular perception. Great new devices or services come out, they get written about obsessively in the press, discussed endlessly in social media, and, as a result, it’s easy to presume that their pace of adoption is rapid.
The reality, however, is often far different.

Examples are abundant. In the enterprise, for instance, everyone’s moving everything to the cloud, right? I mean, it’s just a matter of time, isn’t it?

Not so fast.

Yes, lots of companies are moving lots of workloads to the cloud, but it still only represents a fraction of the computing being done within the walls of most organizations’ own data centers and delivered to traditional computing devices (i.e., PCs). In fact, depending on who you ask, the cloud-based percentage is likely to be somewhere in the mid-teens, which is decent, but nowhere near a majority.

On top of that, several years into the cloud “revolution” we’re seeing public companies already start to reduce their growth expectations. Don’t get me wrong, they’re still strong, but not as stratospheric as many have been presuming.

Cloud-based companies ranging from Salesforce (CRM) to Workday (WDAY) to newly IPO'd Atlassian (TEAM) to Zenefits are all facing additional scrutiny from Wall Street and seeing their stock prices, in the case of the public ones, taking a major hit.

The problem? Unrealistic expectations based on past performance that the Street is now concerned will be difficult to meet.

Conversely, you can also find “older” technologies being written off by the media before they’ve really had a chance. Tablets in business are a great example. Though the overall market for tablets (including both consumer and enterprise) is shrinking, there’s been a resurgence, or more correctly, a long slow path to adoption only now being felt, for tablets in business.

The real problem is that shortly after the iPad came out, many industry soothsayers predicted the quick demise of the laptop and the quick ascendance of the tablet as the pre-eminent computing device. Of course, in retrospect, that clearly did not happen, and as a result, tablets are now being written off by some as little more than a fad.

There was, however, a grain of truth in those initial predictions, because there are some applications/environments/individuals for whom a tablet or at least a device that offers tablet-like functionality is the best choice. The issue is that it has taken IT organizations over five years to really start to get those deployments rolling. Witness, for example, Eli Lilly’s recently announced deal to deploy 15,000 iPads to its salesforce.

Oftentimes the challenge of new technologies has more to do with how much effort it takes to deploy these new technologies than any issues with the technology itself. Those deployments, in turn, are directly impacted by how many other things need to be replaced. Or, to put it more simply, the legacy problem. Cloud computing is a perfect example of this phenomenon. Many of the cloud-based offerings have a lot of benefits in direct comparison to existing “legacy” solutions. The problem is, those comparisons don’t account for the effort and money necessary to switch to new solutions.

The truth is, there is an enormous range of technologies that, if you could start fresh, offer very compelling advantages versus existing solutions. This is why, for example, you see many startups using nothing but cloud-based solutions and leveraging all the capabilities of these solutions. They don’t have to worry about these very real and very challenging transition issues.

The vast majority of businesses around the world, however, don’t have that option. Instead, those legacy issues are staring right at them and typically end up forcing a much slower transition to newer technologies than might otherwise occur.

This really is the crux of the problem. It’s not nearly as hard to come up with entirely new ways of delivering a new technology-based product or service as it is to figure out how to make new solutions work within, or peacefully alongside, existing environments. Most companies don’t make the effort to figure out these kinds of transitions, and that often makes what seems like a great idea in concept, a much slower one to implement, and a much harder one to make work in the real world.

USA TODAY columnist Bob O'Donnell is the president and chief analyst of TECHnalysis Research, a market research and consulting firm that provides strategic consulting and market research services to the technology industry and professional financial community. His clients are major technology firms including Microsoft, HP, Dell, and Nvidia. You can follow him on Twitter @bobodtech.

Here's a link to the original column: