Digital transformation 2.0: Everything revolves around the edge—IDC report

Digital transformations are moving to the edge, according to research by IDC. (Pixabay)

The network has been turned inside out. The vision of a mass of powerful and centralized computers and communications equipment feeding data to far less powerful endpoints is antiquated.

Instead, the time-sensitive video and other applications and the fluidity of where people use them are driving intelligence and computer power to the edge of the network.

The process, which is at the heart of digitization, happens in stages, according to "Creating a New Network Edge: The Next Stage of the Journey to Digital Transformation 2.0," an IDC white paper sponsored by Comcast Business. It was written by IDC research vice president Glassan Abdo and Rajesh Ghai, the research director for IDC's carrier network infrastructure research program

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The reality seems a bit circular: The way in which employees work and customers interact with the business is forcing changes in the network. Those changes, combined with other technical advances, in turn lead to deeper changes in regards to how work is done and customer interactions occur.

The second phase of digitalization will create a fundamentally transformed workforce. "A key focus of the next leg of the DX (digital transformation) journey—the journey to DX 2.0—is the notion of empowering employees at the frontlines of business—at the enterprise network edge," the paper sa. "DX 2.0 relies on the recognition that quality, high-speed enterprise network performance is critical to employee empowerment."

The move of intelligence to the edge is supported by the cloud, SDN and SD-WAN. These technologies make bandwidth and applications available essentially on-demand. They go hand in glove with other important new technologies. "In the first phase of digital transformation (DX 1.0), the technology focus was on mobility, big data, social media, and internet ubiquity. DX 2.0 is about embracing the next wave of technologies, including AI and machine learning, augmented reality/virtual reality."

There are clear demarcations between DX 1.0 and DX 2.0. The first iteration is mobility based, uses social media, early stage IoT and the internet. Initiatives are "one-offs" and, though it incorporates digitization, it is built on legacy architectures. DX 2 builds on this base. It features AI, artificial reality/virtual reality, machine learning, advanced IoT and robotics. It is digital first.

IDC said that this is succeeding where it is being implemented. The firm's 2018 Enterprise Networking Advantage Survey found that companies implementing DX 2.0 see a 38% improvement in customer satisfaction, a 28% increase in revenue and a 26% gain in employee productivity.

The use of the new technologies is more effective if they are baked into the platforms. "Most of these first-generation digital transformation initiatives (which IDC calls DX 1.0 initiatives) were aimed at adding digital features to a business," the white paper said. "While these initiatives did bring benefits to these enterprises, it has become clear that to reap significant benefits of DX, 'digital' cannot be an add-on but must be a central part of a modern business strategy." Of course, not all organizations are implementing DX 2 at the same pace. IDC sees SD-WAN as a pivotal enabler and has created a four-tier hierarchy of corporate buy-in:

• Legacy organizations have not committed to digital transformation.

• Aspirational organization aim to take advantage of digital technologies but have not added all the necessary capabilities or invested fully.

• Opportunistic organizations are committed to digital transformation and have invested in SD-WAN and other networking technologies. "They have turned the corner," IDC wrote.

• Disrupters are using DX to drive networking strategy. They deploy hybrid technologies, design flexible infrastructure and focus on employee empowerment everywhere—but with a priority on the edge, "Perceive disruptive technology as a competitive advantage" and see themselves as being on a "transformation journey."

Business and the technology are changing radically. To thrive, organizations must recognize this and make changes that may be disruptive in the short term. Increasingly, the edge is at the core of what a business is all about.

"The concept of the edge has evolved over the past decade," the white paper said. "It includes not just the traditional definition of the edge—the retail branch or the regional office—but also warehouses, distribution centers, the fleet of customer-facing vehicles, and increasingly the mobile worker not associated with a specific location."