While the digital economy has steadily shifted to the cloud and applications-based business models, a new study shows how an application divide has emerged between companies that are embracing the application economy and those that have yet to adapt.
The Application Economy Study, sponsored by CA Technologies, which classifies companies into “leaders” and “laggards,” shows a clear business benefit to adapting to the demands of the application economy. Leaders (24% of those surveyed) truly understand the importance of software and are significantly outperforming the laggards (16%) in all key business metrics. In fact, leaders are seeing 106% greater revenue growth, 68% higher profit growth and 50% more business coming from new products and services than their laggard counterparts.
At the same time, a move to embrace applications is spurring considerable security implications. About 94% of line of business (LOB) executives are facing increased pressure to release apps more quickly to meet customer demand, with 51% of businesses surveyed having released at least four customer-facing apps in the last year alone. And only 15% of LOB executives are completely satisfied with IT’s speed in delivering new applications or services. All of that is putting pressure on departments to release or use applications without proper security policies and contingencies in place.
The survey found that overall, security is one of the top obstacles to realizing the benefits of the application economy.
In particular, providing a secure environment which protects identities and critical data with multiple, expanding mobile touch points is not simple. In fact, survey respondents list “improving the mobile customer experience” as their No. 2 security challenge and priority, second only to protecting against data breaches.
Another challenge is securing the APIs that companies make available to customers and partners, as they expand access to applications. This is increasingly important—according to the survey, 79% of respondents provide access to their APIs to customers, suppliers, or partners.
The security issue will have to be brought in hand if businesses are to stay viable, CA said. As a result, the study predicts that one-quarter of all IT spending will be devoted to security over the next three years.
Leaders in the survey were shown to use security as a business enabler rather than just a way to control access. A full 47% of leaders (versus only 18% of laggards) report that they have seen increased revenue from new services enabled by security, and 54% have seen an increase in the number of customers using their apps/services due to their security initiatives (versus 20% of laggards).
"There is clear evidence that enterprises of all sizes, in all markets, have to embrace the application economy and place software development and delivery at the center of their business strategy," said John Michelsen, CTO for CA Technologies, in a statement. "Business success is tied to application performance, and the ability of a business to drive growth is no longer just about the product or service they deliver, but increasingly about a complete software-driven experience."