Summary Bullets:

• While there are many vendors offering observability, AI, and FinOps solutions, GreenOps can become another key pillar driven by mandatory regulatory compliance.
• As enterprise businesses become more digitized, they need a more efficient approach and tools to manage the technology sprawl.

After years of digital transformation, enterprises are finding themselves reliant on technology to ensure smooth operations, from internal functions to customer engagement and supply chain management. Many enterprises across various industries will consider themselves as a technology company. While there are certainly business benefits, enterprises are also finding themselves operating an increasingly complex technology environment. This involves the use of cloud, including containers and microservices, multitude of applications, and the APIs weaving across applications and systems, as well as a wide variety of end points such as connected devices/machines. This complexity makes it harder for effective IT management and having a greater visibility across the entire digital environment.

Besides application performance, resource management and cost management, another area that is expected to see growing demand is GreenOps – the management of the environment impact of an enterprise’s IT. IBM is one of the few vendors that has added GreenOps as part of its range of technology business management solutions. Through IBM Envizi, the company is able to help customers establish the baseline for measurement, analyze the data and develop action plans, perform the actions to drive sustainability outcomes, and report on the progress and meet compliance. While there are other vendors offering this capability (e.g., SAP Sustainability Control Tower and Workiva), it is a less crowded space and gives IBM a competitive edge.

The demand for GreenOps will be driven by regulations especially in Europe with the adoption of the European Sustainability Reporting Standards (ESRS). While enterprises are required to report their sustainability information, most organizations do not know how to comply with the standards and keep up with the changes. While this is still a nascent development, and many enterprises may not be keen in wanting to report their sustainability information voluntarily, things will gradually change. Similar regulatory requirements could be adopted by other countries. For example, Australia has also established the Australian Sustainability Reporting Standards (ASRS). As reporting becomes a regulatory requirement in more countries, it will be a challenge for enterprises operating in multiple countries and/or regions.

Besides GreenOps, enterprises are demanding solutions for monitoring and managing their complex IT assets more effectively. IBM is already a major vendor in this space, and it has made several acquisitions to give enterprises greater visibility in multiple ways. For example, IBM Instana provides observability and AIOps, which is crucial for IT to quickly pin-point and remediate an incident to reduce downtime. This is crucial in helping to drive the enhanced digital end user experience. The acquisition of Turbonomc and Cloudability further enhances IBM’s FinOps capability helping enterprises optimize cloud resources (i.e., detect anomalies and reduce waste) and manage cloud costs. Many enterprises that have ramped up their cloud usage have reported a surge in cloud cost and bill shocks.

IBM Apptio extends to the full IT finance management helping enterprises manage their budge and develop forecasts. This is across on-premises solutions, cloud, SaaS, manpower costs, etc. Having more accurate forecast is critical, especially when IT is now increasingly scalable. Moreover, there are new challenges posed by the implementation of generative AI (GenAI) solutions. The ability to better forecast the cost of a GenAI project will give enterprises greater confidence in putting it to production and scale. While there are various observability, FinOps and AIOps solutions in the market, having the full range of capabilities including GreenOps sets IBM apart.

However, enterprises are not just looking for another set of tools, but they need technology partners that can help them address their business needs. They are often constrained by internal skills and resources. Consulting firms, systems integrators, and managed services providers are therefore in a good spot to support enterprises by helping them develop the strategy and choose the right management tools. In fact, most global systems integrators have a strong focus on sustainability, and some have already developed services including compliance, reporting, and governance. These service providers should work with technology vendors to raise awareness around how to better achieve sustainability objectives.