2022 will require more IT intelligence and willingness to invest on the management level, says Begona Jara, Regional Vice President at Pure Storage for Germany and Austria, and predicts a stronger integration of business and IT in companies with a view to the next twelve months. […]
When the worst of the pandemic has subsided and life returns to normal, companies could face a new crisis, employee turnover. The technology industry is not immune to the “Great Resignation” that has hit the US this summer. This is a global trend that could continue well into 2022 as workers voluntarily reassess their workplace options and change their priorities.
If it is not possible to retain top talents, companies will be paralyzed in 2022
The pandemic triggered new forms of work, and as a result, it is now much easier for workers to regularly switch between companies, and this in a highly competitive labor market, which already suffers from skill gaps and a shortage of skilled workers. This is especially true for the next generation of workers who are attracted to a more dynamic way of working. If companies do not offer this, they run the risk of losing top talent.
In order to stand out from the competition and retain their employees, companies could begin to shift their travel and expense budgets to a higher level and offer flexible additional services that are even more focused on diversity and inclusion. The high cost of hiring employees and the high salaries that are currently being paid are a burden. A balance must be created, and this will be an important focus for companies in 2022.
Companies will increasingly adopt a new mentality of “investing to grow”
The pandemic has drastically changed the way business leaders view IT spending. In the last 18 to 24 months, companies have experienced a power struggle between the growth perspective of the CEO and the retirement perspective of the CFO. Since the companies were under a lot of pressure, the CFO came to the fore and dominated. But now we have reached a turning point where the power relations between the two have been balanced – and the CEO has regained the authority to talk.
The business environment is much more positive and somewhat more predictable than before. A growing willingness to take calculated risks in companies means that the CEO and CFO focus on growth together, but in a different way than before.
In 2022, we will increasingly see companies investing in new ways to provide their products or services while maintaining the overall value of their brand. For example, there will be exponential growth in areas such as aaS, managed services, subscriptions and cloud, as companies look for partnerships with specialists for their “IT plumbing” so that they can fully concentrate on optimizing the brand and its products. The psyche of companies is changing. They increasingly want hosters and integrators to do everything for them instead of relying on a private cloud operated by their own employees.
This will make CFOs happy because they no longer have the same cost consequences as they used to, and CEOs happy because they are achieving the growth path they want. Brands will increasingly bridge the gap between the old and the new world as they try to align their minds and procurement models with subscription models. Compared to the time before the pandemic, the companies here are estimated to be maybe 30 percent further, but there is still a lot more old thinking and technology to change. However, this will happen, as the stock market continues to sit on the neck of all companies that are still buying in the old way.
In 2022, CEOs need to be more decision-making and IT-competent than ever before
The pandemic will lead to CEOs gaining more authority in their decision–making – and this applies to all industries. The risk of making a mistake now is very harmful for any company, so it takes a determined leader to emerge stronger from this phase. In order to be able to make these decisions effectively, it is crucial for CEOs to have a much deeper and more comprehensive understanding of their company. This also applies to the data you have at your disposal and how you can manage it to the extent that it must be considered as a balance sheet asset. This, in turn, presupposes that the CEOs have far more IT knowledge than they ever had.
As a result, companies will lean on the CTO and Chief Data Officer (CDO) and work more closely with them to fully grasp and understand the value of their technology and data. This is especially true for areas such as containers and Kubernetes to ensure that companies can take full advantage of automation, mobility and agility and move data dynamically throughout the company.
Companies face serious consequences if they do not comply with ESG regulations
As a society, we are all responsible for doing more to use less energy and leave a lower CO2 footprint to save the planet from further damage. The short-sighted view that the success of a company is based solely on how much money goes in and out will be a thing of the past. In 2022, companies must be evaluated according to their commitment to ESG (Environment, Social, Governance).
Therefore, governments will impose restrictions or higher taxes on companies that do not comply with certain ESG regulations. ESG becomes a balance sheet item in which companies have to indicate how much CO2 they produce and whether they compensate for it sufficiently. Data will be the key. If companies want to become more efficient, they need to evaluate their data to identify patterns and trends that will tell them where they are doing the most damage, so they can get to work to fix it.
Ironically, however, this ability to use data often relies on very ESG-unfriendly old data centers and data infrastructures that are used to store and analyze the data. According to various estimates, data centers are responsible for two percent of global energy consumption, which is roughly equivalent to the aviation industry. Many brands already rely on sustainable data centers and more energy-efficient technologies such as Flash. This trend will accelerate even further. Seemingly small changes, such as replacing hard disk space with modern flash memory, can have a big impact on ESG obligations. For example, Pure Storage has tracked the data of the last eight years and can prove that its customers achieve energy savings of the order of four billion kWh. The year 2022 will be the first nail in the coffin for all energy-inefficient technologies.
*Begona Jara is Regional Vice President at Pure Storage for Germany and Austria.