Resource Regions: Western Europe

In today’s rapidly evolving digital landscape, where technological advancements are reshaping industries at an unprecedented pace, the cloud has emerged as a beacon of innovation and efficiency. European businesses and governments have keenly embraced cloud technologies, harnessing their transformative potential to optimize operations, drive collaboration, and stay ahead of a dynamic digital market.

At the forefront of this cloud revolution is the concept of Industry Clouds – specialized platforms, applications, and services that offer industry-specific capabilities and operational prowess, revolutionizing how businesses across diverse sectors operate and excel.

A Shift in Cloud Dynamics: The Rise of Industry Clouds in Europe

The maturity of the cloud market in Europe has been steadily progressing, and forward-thinking organizations are strategically leveraging the unique advantages offered by different cloud platforms, applications, and services. The region’s robust infrastructure, bolstered by data protection regulations like the General Data Protection Regulation (GDPR), combined with the presence of established local cloud service providers, has expedited the adoption of cloud solutions across various industries.

Innovation, collaboration, and operational efficiency have become the driving forces behind European businesses’ embrace of cloud technology. Notably, the emergence of multi-cloud and hybrid cloud strategies has allowed organizations to tailor their cloud environments to their specific industry needs, adhere to local regulations, and fuel complex digital businesses that thrive on flexible infrastructure.

This holistic approach goes beyond mere migration, and moving out of legacy environments, looking for cost-efficiency, but marks a pivotal shift toward industry-specific solutions.

Empowering the Leadership: CTOs and CIOs in the Cloud Era

As cloud maturity advances, the roles of Chief Technology Officers (CTOs) and Chief Information Officers (CIOs) are undergoing a transformation. These decision-makers are no longer concerned solely with operational efficiency and scalability; they are now focused on strategic cloud implementation that drives tangible business outcomes.

The modern CTO and CIO are in search of solutions that not only streamline operations but also cater to the unique demands of their industries, thereby enhancing value for money and competitive advantage.

This shift in focus has paved the way for Industry Clouds to take center stage. As cloud providers, enterprise software vendors, and industry organizations fine-tune their offerings to align with specific sectors, CTOs and CIOs are empowered to harness cloud technologies that are tailor-made for their industries, sub-sectors and even use cases.

Deciphering Industry Clouds: Defining the Landscape

Industry Clouds, as distinguished from their conventional counterparts, are cloud-based platforms, applications, or services designed to offer industry-specific insights, technology, and operational capabilities. The hallmark of Industry Clouds lies in their vertical integration, modularity, collaboration features, and the potential to foster network effects. These specialized clouds encompass a range of services, including SaaS, IaaS, PaaS, DaaS, and various business operations-as-a-service.

What sets Industry Clouds apart are their unique characteristics. These clouds provide a suite of tools that agnostic cloud platforms and enterprise SaaS solutions simply cannot replicate. The focal technology capabilities encompass:

1. Industry-specific data models
2. Industry-tailored business process capabilities
3. Pre-built blueprints and configuration templates
4. Governance capabilities, including compliance and regulatory alignment
5. Cross-industry collaboration options for seamless data sharing
6. Specialized AI and analytics capabilities, including Gen AI
7. Marketplace functionalities for optimized sourcing
8. A PaaS platform for customized extensions and add-ons

These capabilities underpin the value proposition of Industry Clouds, allowing organizations to tap into solutions that are purpose-built for their sectors.

Navigating the Landscape: European Industry Clouds Research

The European Industry Clouds Research is a comprehensive exploration of industry-specific solutions. This research delves into the offerings of Cloud Service Providers (CSPs), competitive landscapes, adoption best practices across industries, and other critical aspects of these specialized platforms, applications, and services.

While the focus is primarily on CSP offerings, it also encompasses insights from industry players such as Siemens and Dassault, albeit in a more limited scope. Notably, the research excludes non-business solutions ecosystems, like government shared/community cloud platforms or collective standard-promoting platforms.

The research also extends into the realm of Cross-Industry approach, comparing and contrasting adoption rates across different sectors, evaluating offerings per industry, and dissecting the strategies of Cloud Service Providers, consulting organizations, and enterprise software vendors. This comprehensive exploration ensures a holistic understanding of Industry Clouds’ impact on various industries.

Industry Clouds vs. Industry Ecosystems: Navigating Complexity

Industry Clouds and Industry Ecosystems, while interconnected, are distinct concepts that play unique roles in driving innovation and business efficiency. An Industry Cloud Platform is a specialized, industry-tailored digital service offering data, blueprints, and industry knowledge to optimize operations within a specific sector.

In contrast, Industry Ecosystems encompass a broader network of businesses, partners, and stakeholders, promoting collaboration, innovation, and value creation on a larger scale. While Industry Clouds offer targeted solutions, Industry Ecosystems foster a collaborative environment that transcends organizational boundaries, nurturing multi-way value generation flows.

Embracing the Future: Leveraging Industry Clouds for European Business Acceleration and Resiliency

As European businesses continue to navigate the ever-changing digital landscape, Industry Clouds have emerged as a powerful tool to drive operational excellence, innovation, and competitive advantage. By tailoring cloud solutions to meet industry-specific needs, organizations are harnessing the full potential of cloud technology to create a transformative impact.

As we move forward, it is imperative for businesses to recognize and leverage the unparalleled benefits of Industry Clouds and Industry Ecosystems, ensuring sustainable growth and staying at the forefront of digital evolution.

To know more, please reach out to Anielle Guedes.

September through December are busy months for IDC analysts. Industry and tech vendor conferences and events are happening every week. Only over the next couple of weeks, I’ll be traveling first to Rome and then to Portugal and, every time I travel, I try to think of my carbon footprint.

Going to Rome is a no brainer, I’ll drive my hybrid car to the train station, then ride a commuter train to Milan, then a high-speed train to Rome, and eventually the subway to the hotel; I’ll ride electric end-to-end. Going to Lisbon, there’s no choice, I need to fly, unless I fancy spending two days on a bus. So, my carbon footprint will be much higher. True, Lisbon is much farther away than Rome, but still the average carbon emissions of a flight are much higher than those of a train.

Air travel executives know that policymakers, investors and passengers are expecting them to be more ambitious in terms of their environmental sustainability targets and are taking actions.

Download eBook: Sustainability in EMEA: Opportunities for Tech Vendors, Challenges for Tech Buyers

The Three Horizons of Sustainable Air Travel

In the immediate aftermath of COVID, somebody thought that doing more work, learning, getting entertained remotely would replace a lot of air travel, hence reduce emissions. But air travel came back with a vengeance.

Therefore, air travel executives need to rely on other levers to increase sustainability. One of the most critical is technology innovation. Technology innovation will play a strategic role to make air travel more sustainable through three waves.

• In the long-term, electric and hybrid electric propulsion aircraft will drastically reduce both carbon emission and noise pollution. But although air taxis are already technically possible, long-haul electric flight is at the research stage.
• In the medium-term, alternative fuels will reduce, but not eliminate emissions, and by 2030, they will not represent only about 10% of all consumption, according to the International Energy Agency.

Information and communication technologies (ICT) will help – for instance, AI is being applied to accelerate the discovery of alternative fuels, digital twins are used to design and develop electric engines for aircrafts – but they won’t be the critical enablers. These medium-to-long term changes will be dependent on biochemical, mechanical, and electrical engineering developments.

• In the short-term, it will be a whole different story. ICT will be strategic to make air travel more sustainable. From designing and operating more fuel-efficient routes, by integrating traffic control systems, such as the Single European Sky, which is expected to cut carbon emissions by around 10% per year, to applying AI and machine learning to reduce taxi time – American airlines intelligent gating program is providing the capability to save more than a minute of taxi time per flight. From implementing more sophisticated data collection and analytics to report scope one, two and three emissions more accurately and then offset them, to reducing airports’ energy consumption. From sharing data among airlines, global distribution systems, online travel agencies and brick-and-more travel agencies to nudge passengers to buy environmental sustainability products and packages, to partnering with railways to replace short-haul flights or better connect airports.

Register for the webcast: Sustainability in EMEA: The Challenge of Moving from Ambition to Action

I consider myself a quite environmentally conscious person, but then when I look back at my twenty plus years career in the ICT industry, I took so many flights that make my environmental conscience feel guilty. I hope that I’ll be able to travel on an electric powered airplane, someday.

In the meantime, there are plenty of opportunities to embrace ICT innovations to make air travel more sustainable. To learn more about airlines’ sustainability and other strategic and operational innovations enabled technology, take a look at IDC’s global research on the industry.

Adoption of Generative AI by European organizations is growing and will continue to grow in 2023 and beyond. According to IDC’s 2023 Future Enterprise Resiliency and Spending Survey, Wave 5, 20% of European organizations have already made significant investments in Generative AI, while an additional 58% say they are closely looking at the business opportunities the technology has to offer.

Our data from the above survey highlights three areas in which automation and especially Generative AI is already making an impact on European businesses and their workforce:

• GenAI for Skill Shortage Offsetting: As of June 2023, 78% of European companies report that they have deployed or are at least piloting automation technologies to offset labor shortages.
• GenAI as Labor Replacement: 28% of European leaders have already discussed replacing employee positions with automation; 78% plan to replace up to 20% of their workforce with “digital colleagues”.
• GenAI for Employee Augmentation: For those using automation to augment workers (not replace them), generative AI assistants such as ChatGPT, Bard and Copilot paired with data analytics and Project Management tools will be key to improving employee productivity.

Implementing AI driven technology solutions drives operational efficiencies only if they involve the workforce. Employees’ fear of losing jobs to automation is justified because the level of trust between workers and employers on job status has been eroded by companies’ readiness to lay off staff. Therefore, the use of Generative AI within the organization requires education and communication across the organization on what it is, how it will be used, and what its benefits are.

Building trust within your workforce starts with honesty. In most cases, automation will result in job losses, be clear about that. However – organizations that make the most of GenAI limit the number of employees they let go and instead refocus the affected employees into more useful and strategic work.

Many become users of Gen AI who understand the intricacies of newly automated tasks. They can not only capture ways to make automated work more effective but also implement insights to make better and faster decisions and choices. In summary: the implementation of Gen AI will drive work transformation at an exponential pace.

Register for the Webcast: Five Ways to Unlock a Purposeful, Automated Future of Work in EMEA

To successfully manage the cultural impact GenAI will have on your workforce, the following concerns need to be addressed with diligence and ethical integrity:

1. GenAI Governance. The greater the depth and breadth of the AI solution, the more important it is to have a governance structure. Test that uses of Gen AI are working correctly, output is dependable and permissible, and the strategy/roadmap is resilient, transparent, and secure. The better the governance model the more employees can trust using their company’s automation tools.
2. Change in Employee Roles. An organization’s work model will be affected after the implementation of specific Gen AI use cases. Where possible, employees doing repetitive work should now be shifted to doing more meaningful work. This will mean a reduction in staff, but also an increased need for trained staff supporting new business processes through Gen AI
3. Training and Reskilling. The technology expertise required to implement AI tools must be considered in the earliest planning stages. The staff replaced by automation should re-focus on value-added work. This often requires internal upskilling or reskilling to perform more strategic tasks within the organization.

Workforce automation has grown in importance for organizations seeking greater flexibility while providing more meaningful work for employees, reducing costs, providing predictable processes for low value-add tasks, and increasing ROI. Generative AI especially is by no means a magic tool, but it can make a difference when implemented properly.

Taking the time to test out assumptions, pilot relevant use cases, and developing a mid to ling term plan is worth the time. The outcome is a more efficient, effective workplace and engaged workforce.

To fully realize the potential of GenAI, companies need to invest in frameworks which guide talent development and innovative business models that will create value for their customers, as well as their workforce.

Mainframes are a staple of the European enterprise. They’re reliable, powerful, have been around for decades, and many organizations continue to use them for their most crucial business functions. Mainframe apps are common among information-intensive industries areas such as banking, government, healthcare, insurance, or utilities.

With the rise of new technologies like the cloud and low-cost servers, many predicted the mainframe’s demise. But guess what? It’s still alive and kicking, and here’s why.

Unmatched Performance: Mainframes excel at high-speed transaction processing. They handle enormous volumes of transactions swiftly and cost-effectively. This is why banks rely on them for core operations. Transactions like credit card processing and ATM withdrawals happen seamlessly, thanks to mainframes. They’re also the power behind those overnight batch runs for processing customer statements and reports.

Data Handling Prowess: Mainframes have the muscle to handle multiple terabytes of data effortlessly – the capability is vital in sectors like government, healthcare, or insurance.

Ability to Adopt: YES! Mainframes have adapted to stay relevant. Once bound to COBOL and proprietary OS, they now embrace modern programming languages like Python, Java, JavaScript, and C++. This multilingual flexibility allows them to use sophisticated tools from the x86 server world.

AI and Machine Learning: With support for languages like Scala, Python, TensorFlow, and Apache SparkML, they make interesting hosts for machine learning. It has become possible to integrate valuable mainframe data with analytics platforms, eliminating the need for data off-loading.

Security Supremacy: Mainframes rule when it comes to security. Their processing power allows for high end-to-end encryption without performance sacrifices.

So, if they are perfect, why aren’t they? Because they can also become very expensive to maintain, and often just can’t keep up with the demands of the modern world.

That’s why more and more European organizations are modernizing their mainframe applications. Skillfully done, modernization offers all the benefits of a mainframe without the drawbacks. It can help you with:

Saving cost: Maintaining mainframes isn’t cheap. There are hardware, software, and skilled personnel costs. Modernization might seem like a costly adventure, but it actually leads to significant savings in the long run.

Improving scalability and agility: Mainframes aren’t inherently scalable, which is a problem in today’s ever-changing business landscape. Migrating to new platforms allows for easier scaling and adaptation to shifting workloads.

Enhancing integration: Mainframes often use legacy technologies that make integration with modern systems and cloud services a headache. Modernization lets you embrace agile development methodologies, microservices, and containerization, making it easier to adapt and release new features.

Attracting talent: As older IT professionals retire; mainframe expertise is becoming scarcer. Modern technologies attract a larger talent pool, making it easier to find skilled professionals for modernized systems. And it is easier to maintain necessary apps.

Improving UX: Users expect web-based interfaces, mobile compatibility, and responsive design.

Mainframes struggle with this, but modernization can provide a competitive edge by improving the user experience. And modernization doesn’t have to be painful. Here are a few tips to make your mainframe modernization journey if not fun, then surely more painless:

• Start small: Don’t try to modernize everything at once. Start with a few key elements and then gradually work your way to the rest.
• Get help from a trusted partner: There are several companies that specialize in mainframe modernization. They can help you assess your needs, develop a plan, and execute the migration.
• Do your research: There are a lot of different mainframe modernization options available. Do your research and choose the one that’s right for you, but be creative, don’t be afraid to think outside the box and come up with your own approach.
• Set realistic expectations: Modernization is a complex process. Don’t expect it to happen overnight.
• Be patient: There will be challenges along the way. Be patient and don’t give up.

Will there be challenges? There will be. Modernization can be a costly undertaking, but it’s important to remember that the cost of not modernizing can be even higher. Modernization is a complex process that requires careful planning and execution. There is always some risk involved in any major IT project. Modernization is no exception. And surely, there is a shortage of skilled professionals with the knowledge and experience to modernize mainframe applications.

Mainframe applications are here to stay, but modernization is essential for staying competitive in today’s digital era. Whether you choose to recompile with emulators, migrate gradually, focus on component-level changes, or opt for lifting and shifting, the key is to adapt while preserving what makes mainframes valuable.

To see how European organizations approach mainframe apps modernizations, please read:

Mainframe and Cloud 1/3: What Do European Organizations Plan to Do with Mainframe Applications in the Context of Cloud?

Mainframe and Cloud 2/3: What Strategies Are European Organizations Employing to Migrate Mainframe Applications to the Cloud?

Mainframe and Cloud 3/3: Why Do Some European Companies Have No Plans to Migrate Their Mainframe Applications to the Cloud?

To see what it means for service providers, please read:

Turning Challenges into Success – Mainframe App Modernization Offers Opportunities for IT Services Providers

In March 2022, IDC asked 885 European employees that had confessed to be looking for alternative employment about their motivation for doing so. The top reason was, unsurprisingly, better pay. What was more interesting was that “better working environment (i.e., a better employee experience)” was almost as high among the reasons for job change. It showed that today, work is less about paying the bills and advancing a career. It is much about personal development and fulfillment, as well as being a social and collaborative experience.

One year later, in March 2023, similar questions to 790 employees that were looking for a new job. The proportion of employees citing “better work environment / better corporate culture” was 48%, up from 42% the year before, and just 1% point behind “better pay”. So, not only are the ‘soft’ values important to employees, but they are becoming more and more important. Inflation could also play a role in this detachment from the “hard work” paradigm (i.e. hard as working hard to reach higher levels in the company / higher level of salary). The price increases undermined salaries and dream of the salary-based buying power that we saw previously.

Is it become the strenuous, ‘blue collar’ jobs are disappearing while ‘white collar’, knowledge worker jobs are taking over? The data does not support this hypothesis. All workers, regardless of whether they are desk workers or store/factory/field workers have “better pay” as the #1 motivation to look for a new job. Also, all workers have “better work environment / better corporate culture” as a key motivation for looking for a new job. Knowledge or desk workers are relatively interested in a better corporate culture, while store/factory/field workers are relatively interested in better teams / change of colleagues. Instead, it looks like all work types are becoming more knowledge intensive and bigger part of the individual identify, which prompts all employees to place higher value on work environment, culture, leadership, etc., as opposed to pay.

Dissecting “Employee Experience” to Understand Employee Work Motivation

In the March 2022 European employee survey, we also set out to understand which aspects of “employee experience” were more important to employees. We defined seven fundamental aspects of employee experience and asked the employees to rate these in terms of importance. We discovered that relatively ‘soft’ aspects of work, namely corporate culture and leadership & employer brand, were the most important factors of the seven, and more important for employees than we previously assumed.In the March 2023 European employee survey, we wanted to deep dive into the work culture and leadership aspects of the employee experience. In other words, we wanted to find out what was behind the emphasis on these topics among European employees. Again, we asked employees to rate the importance of a number of subtopics underneath work culture and leadership.

The result showed a remarkable drive amongst the employees for purpose in their work, for a sense of meaningful contribution, for personal development and for fairness. This applied to all types of workers, from desk workers over field workers to staff in stores/warehouses/factories. This drive for purpose implies a number of employee requirements around open communication, leadership integrity, fairness in recognition and compensation, etc. And these requirements are indeed reflected in the top aspects of the two pillars under investigation, work culture and leadership, respectively, as shown in the figures below.

General Implications for Organizations: New Leadership Styles Are Called For

Gone are the days of secluded top managers running organizations in separation from the myriad of employees carrying out instructions and work. Most management experts might comment that this ‘new’ style of open, visionary, and inclusive leadership have been practices for decades already. However, the results of both the 2022 and 2023 surveys suggest that most European organizations still have far to go. The survey data showed that the two most important employee experience pillars, “People-First Culture” and “Leadership and Employer Branding”, were also the two pillars with the largest gap between importance and employee’s rating of their current employer. In other words, the two pillars of the highest level of disappointment with the current employer.

The survey data also showed that for the detailed aspects of these two employee experience pillars, the most important aspects were also the aspects with the largest improvement potential. “Open and timely communication” sounds easy but is often very difficult to carry out successfully in practice. Among the general implications for organizations are:

• Leadership development, especially in the area of soft skills, is critical.
• Executive search must place higher emphasis on aspects such as empathy, integrity, and communication skills.
• Enhancing work culture and leadership communication are new strategic areas where HR can make a difference for organizations.

Implications for HCM Software Vendors: New Solution Types Will See High Demand

Software solutions also have a role to play in remediation of the current culture and leadership shortcomings. In many cases, new HCM solutions will be needed to improve processes related to communication, recognition, compensation, and recruiting. We see particular opportunities in the areas below:

• Compensation management
• Management development training
• Pay gap and Environmental, Social & Governance (ESG) analytics
• Employee engagement & rewards
• Employee performance management
• Recruiting solutions & applicant tracking solutions

Please see the following IDC studies (behind paywall) for more information:

• Building Blocks of a Better Employee Experience (August 2023)
• A Deep Dive into People-First Culture: Results from IDC’s March 2023 European Future of Work Survey (July 2023)
• Hybrid Working in Europe: A Deep Dive into IDC’s Hybrid Working EX Pillar and What European Employees Are Saying About It (September 2022)