Digital Startups Put a Scare into Most Enterprises

What’s Halloween season without a couple of scary statistics?

Recently, technology market research firm Vanson Bourne surveyed 4,000 business leaders for a digital transformation study commissioned by Dell Technologies. The companies soon discovered that at many global midsized to large enterprises, there’s an undercurrent of fear coursing through corporate boardrooms.

Seventy-eight percent of businesses consider so-called “digital-born” startups a threat. Nearly half (45 percent) said they feared becoming obsolete due to competition from these newcomers and 48 percent said they lack a clear picture of what their industry will look like in just a short three years. Already, more than half (52 percent) of those polled said their industry had experienced significant disruption caused by the Internet of Things (IoT) and other digital technologies.

Worse, most organizations’ digital transformation initiatives seem to be stuck in first gear.

“Only a small minority have almost completed their digital transformation. Just one in three businesses surveyed are performing critical digital business attributes well,” stated Dell. “While only parts of many businesses are thinking and acting digitally, the vast majority (73 percent) admits digital transformation could be more widespread throughout their organization.”

Only 5 percent of businesses can be considered digital leaders, organizations where digital transformation “is ingrained in the DNA of the business,” according to the study. Another 14 percent are digital adopters, or organizations with a mature plan and digital initiatives in the works.

Tentative and exhibiting somewhat of a wait-and-see attitude, digital evaluators and followers make up the bulk of today’s established enterprises, with 34 percent and 32 percent, respectively. Lacking a plan and with few digital investments, 15 percent qualify as digital laggards.

At the very least, most businesses are realizing that they need to adapt today’s torrid pace of digital disruption. Sixty-six percent of respondents said they plan to invest in fostering digital skills leadership and IT infrastructure and 72 percent said they are beefing up their software development capabilities. Seventy-three percent said they need to prioritize setting a centralized technology strategy.

In terms of technology, businesses are largely investing in converged infrastructure and “ultra-high performance” solutions, like flash-enabled storage systems, over the next three years. Big data processing and analytics also rank high, as does the IoT.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.

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