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Mapping a smarter path to digital transformation

The edge is a disruptor; well-mapped process is the key.

Any veteran of cruise vacations knows that soon after heading out to sea, your cell service drops. Your Wi-Fi connections become spotty at best. And your link to the digital world is all but severed.

It's disconcerting if not annoying. But several cruise lines, including Carnival, hope to change that by tapping the power of cloud and edge computing to deliver premium services for interested passengers.

With Carnival's MedallionClass Experience, guests carry a tiny wearable OceanMedallion with them that triggers a variety of services on two Princess Cruise vessels (soon to be a third). The gadget ties into more than 7,000 sensors and 4,000 high-resolution screens around the ship that provide directions, personalized entertainment, and purchase recommendations. They also amplify customer experience wherever a passenger might be. For instance, when approaching your cabin, the system will automatically sense your arrival, unlock the door and tee up a personalized on-screen greeting. Your on-board purchases, meantime, are tied into a payment system so you never have to swipe or sign anything. Your food and drink orders are also curated throughout your cruise so wait staff can offer personalized refreshment suggestions or proactively bring various items to you for your convenience.

It all happens thanks to a seamless and invisible interaction between data collected and stored in multiple locations, both on shore and on the ocean.

"One of the most remarkable innovations here is how we are leveraging both the cloud and edge computing on a ship simultaneously," says John Padgett, Carnival's chief experience and innovation officer, who led the rollout of similar MagicBand technology at Walt Disney World in Orlando, Florida.

Carnival is just one of a growing number of companies that are embracing such digital-era capabilities to deliver disruptive services. And they're doing it differently than they have in the past. Indeed, the digital era has become all about how data is generated, used, and monetized.

The rise and fall of data centers

As recently as five years ago, most enterprise organizations were focused on building out cloud infrastructure to support the delivery of online services as well as the aggregation and analysis of data collected along the way. With brands increasingly competing around customer experience, it was vital to have all business, operational, and IT programs aligned for such efforts.

Billions of corporate dollars poured into creating massive, hyperscale data centers to support the expected explosion of cloud services and related data. But with the proliferation of interconnected services, cloud providers, Internet of Things (IoT) devices, software-as-as-service offerings, and edge computing, analysts say the rationale for keeping everything in traditional data centers isn’t as strong as it once was. 

In fact, Gartner says that by 2025, 80 percent of enterprises will have shut down their traditional data centers, versus 10 percent today.1

IDC, meanwhile, notes that because it doesn't make sense from a latency standpoint to deliver online services from centralized enterprise data centers, we'll instead see organizations deploying more assets in millions of enterprise-owned, service delivery edge locations instead of core data centers as soon as 2021.

"The edge is going to disrupt all of our businesses," says Rick Villars, IDC research vice president for data center and cloud. "Most of the interesting things you can do where you're only using endpoints and the core have been done; we're just making them more efficient. Now, it's going to be about delivering new innovations that only work when there is IT at the edge."

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The edge disrupts everything

That's one of the reasons momentum is shifting to the edge.

Edge computing is all about getting answers quickly. By keeping compute, storage, data management and control functions at the edge, companies can limit undesired data transmission delays and limit supporting bandwidth requirements. In the process, overall operational costs are minimized, since it's no longer necessary to constantly move chunks of data between regional data centers and the cloud.

Speed is just one benefit of moving to the edge. Another is the scale and breadth of data sources. By basing critical functions at the edge, you not only get faster response times to digital requests, but the responses can deliver a higher fidelity.

All of this is incredibly important for enhancing increasing demand for superior customer experiences, since it helps deliver higher convenience levels. If a door lock on a cruise ship doesn’t instantly unlock when someone approaches with a smart key, for example, that could be the difference between a positive or negative passenger impression.

To benefit from the disruptive potential of the edge, companies will need to make some fundamental changes to their business, operational, and infrastructure models.

In the pre-digital era, the business model tended to set the corporate direction. Operational leaders would then work with IT to determine what was needed to execute various business priorities, and millions or billions of dollars would then go into technology projects supporting those objectives. Under this approach, the CIO's IT department was largely seen as a cost center. Its purpose was to deliver the right price and performance on desired technology assets.

In the current digital era, however, every company worries about its business model being disrupted by some new technology. To stay ahead of such churn—and seize the opportunities it presents—more companies now look to technology to help identify innovation-led opportunities and set business direction.

In some companies, however, individual IT departments often identify and pursue shadow IT projects that may be valuable to their own departments or product areas but are not aligned with broader company objectives. IDC's Villars says this is the sign of an immature organization as opposed to one IDC would call a "digitally determined business."

"For the last five years, most companies have been digitally focused. They recognized they had needs; they had issues and needed to respond. But they weren't digitally determined to the point that they were making sweeping business and architectural decisions," Villars says. "It is our belief that less than half of companies today are digitally mature. In four years, we think it will be more than half."

Mapping the digital journey

One way to determine where a company stands in its digital journey—and where it needs to go—is to apply a distinctive methodology to map the digital initiatives underway within an organization and link them to business priorities. This digital journey map can describe where companies are in their transformation efforts and what needs to happen for improved digital maturity.

The journey map is broken into three integrally related categories: data-driven, edge-centric, and cloud-enabled.

Cloud enablement is about accelerating innovation to speed time to value with native cloud development. This is where everything-as-a-service solutions are revolutionizing business as we know it. Cloud is also about modernizing and moving the legacy environments, which involves optimizing service delivery costs with hybrid cloud agility.

Edge-centric activities, meantime, focus on designing new business models and boosting revenues by creating and delivering new, personalized customer experiences. At the same time, it's also about gaining insight from edge data in ways that enable businesses to better control and improve operations.

This methodology aims to help organizations execute across both cloud-enabled and edge-centric journeys. Organizations can select from two distinct transformation approaches. One is a "predictable" approach that's meant to achieve an identifiable and predictable outcome, as well as a return on investment. Budget here would typically be held by an IT department. The other approach is "exploratory," where budget is often held by lines of business. In this approach, requirements are not clearly defined, but the organization has a general view of the direction it needs to take and what role technology could play. The consultant, therefore, uses product management methodologies to identify and pursue relevant digital opportunities and determine the appropriate path to secure them.

Conquering digital challenges

No matter how well a company might be implementing both cloud and edge technologies, however, there will be always be ongoing challenges to monitor and address.

For instance, businesses will need to apply emerging technologies, such as artificial intelligence and machine learning, to deliver more personalized customer experiences. And because this will always entail using personal data, businesses will have to contend with privacy rules and regulations, such as Europe's General Data Protection Regulation (GDPR) framework, governing the use of private information.

Aligning cloud and edge computing processes also requires companies to evolve their operating models to bring together IT and operational technology experts around a common cause. Each team will need to dive into the details of the other's work, understand how they operate, and work together.

Security is another concern. As data is gathered and shared between cloud and edge infrastructure, there's a constant threat of interception and misuse. Research by Futurum and Hewlett Packard Enterprise reveals two contrasting schools of thought about digital security. Nearly 90 percent of organizations surveyed believe data is easier to secure when it is processed locally rather than transmitted to the cloud. But lack of security also ranks as a top barrier to edge computing.

Becoming digitally mature requires constant agility and a willingness to let go of once-popular technology models as new ones emerge.

"The challenge is that digital determination is a moving target," says Villars. "What was a brilliant, leading-edge mobile interface that all your customers loved two years ago could be a stale, old thing today. Digital determination means that you keep investing in order to rapidly respond to new interfaces, interaction models, and case studies as they come along. It isn't so much about where you've been or where you're going as it is about knowing how you're going to get there—and why."

1"The Data Center Is Dead, and Digital Infrastructures Emerge," Gartner, April 13, 2018  

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This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.