Gartner: "Every budget is an IT budget. Every company is an IT company."

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Gartner is fond of identifying future trends and coining buzzwords for them, and this week they came up with a new one: The Digital Industrial Economy.

But IT pros actually might want to pay attention to this one because it could have a huge ramifications in the years ahead.

At a keynote speech at the Gartner Symposium/IT Expo in Orlando, Florida, on Monday, Gartner senior vice president Peter Sondergaard coined the term to identify the idea that all companies are technology companies. We all have to worry about the power of digital and what it means to our businesses, and to that extent the digital aspect becomes paramount.

I'm not sure the Industrial part of the phrase accurately describes it, but what he means is that when we combine the mobile, social, big data, and cloud trends we have seen developing over the last several years, and bring this together with the digital sensors that are going to pervade every product we use, the buildings where we live and work, and even the clothes we wear, every business will have to confront a fully digital world. That's even true of businesses who are outside the tech industry, and departments outside the IT group.

As Sondergaard told the audience at the keynote, "Every budget is an IT budget. Every company is an IT company. Every business leader is becoming a digital leader. Every person is becoming a technology company. We are entering the era of the Digital Industrial Economy."

That's because these forces mean almost anyone to come up with a tool to disrupt your business. Businesses cannot sit back and believe that whatever has worked in the past will continue to work moving forward because the rate of change is dizzying. And as this change happens consumer and organizational IT become indistinguishable. 

This is something we have already begun to see with consumerization. As users bring their consumer devices and consumer experiences into the workplace, they are demanding tools that work just as well as those consumer ones. This has resulted in a blurring of the lines between what we consider enterprise tools and those we have considered purely as consumer ones.

As Sondergaard says, "Digital is the business. The business is digital." Forrester Analyst James McQuivey talked about a similar dynamic in his book Digital Disruption, Unleashing the Next Wave of Innovation. There is a whole new generation of competitors who were born digital, make liberal use of cloud services, and find ways to produce new products quickly. They aren't interested in focus groups in order to produce the perfect product -- because today's social channels provide all the feedback they need, and the rapid-iteration model aided by lots of flexible cloud technology helps them respond quickly.

Speaking at the E2 conference in Boston last June, McQuivey used the example of a toothbrush. How would you reimagine the toothbrush in a digital world? Well, you might put sensors in it and get data about how well you're brushing, the spots you are missing, the length of time you brush and so forth. You could get this data directly or you could share it with your dentist to help manage your care. And this is just one small example.

As McQuivey says, any company can be disrupted by digital competition, and this plays directly into the notion of the Digital Industrial Economy that Gartner is discussing. When you imagine these sensors in everything we buy, and when you think about mobile not just as a smartphone or tablet, but some kind of wearable that might be on our faces or in our clothes, and you combine this with all the data being transmitted in the world by traffic lights and heating systems and soft drink machines -- just about anything and everything-- you can begin to see how it's inevitable that these trends are going to have an impact on every business, regardless of what you sell.

As you think about this -- and you need to be thinking about it because the world is changing before our eyes -- consider these numbers from Gartner:

  • In 2009, there were roughly 2.5 billion connected devices in the world, made up of 1.6 billion devices and 900 million sensors.
  • By 2020, Gartner is predicting that there will be 37.3 billion connected device with 7.3 billion devices and 30 billion sensors.

While it's always wise to take any analyst firm's predictions with healthy dose of sodium chloride, even if the numbers are half of what Gartner predicts, we are talking about a huge number of connected devices in the world communicating and sharing data in ways we haven't even imagined yet.

However you want to look at this, it's clear that as Sondergaard said, "Our personal world and the Internet of Things is colliding and this collision is going to have a profound impact on how you do business."

This change will create new businesses and efficiencies that add value to every process. Of course Gartner has a number here too -- the firm is predicting a net economic gain of $1.9 trillion as a result of the influence of The Internet of Things on how we do business. Sondergaard says this tidal wave of change is going to influence every company across the spectrum of business types, whether you're a hard industry or a soft one.

If Gartner is right we are on the precipice of a major change. We have already begun to see the first few signs of that change in the form of digital disruption, consumerization and BYOD, but what's coming as we grow ever more digital is going to alter the ways we do business and you need to be thinking about this today --because 2020 isn't that far away.

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