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July 2015 – Prepared by Zeus Kerravala

Digitization is reshaping the business landscape faster than ever before. Business disruption is something that used to take decades; but natively, digital organizations such as Uber and Airbnb have disrupted their respective industries in fewer than 10 years. Digital transformation is creating new winners and losers at an unprecedented rate. Exhibit 1 shows that in 1960, businesses were on the S&P 500 Index for about 60 years. This number was cut in half by 1980 and will be cut in half again by 2025. Based on this economic data, ZK Research predicts that 75% of the S&P 500 Index will turn over in the next 10 years.

Because of digital transformation, business leaders are striving to build agile organizations. Agile businesses are those that can capitalize on market transitions and become digital organizations. Companies that can successfully make this shift will leapfrog the competition, while those that cannot will lag behind and struggle to survive.

The key to business agility in the digital computing era is IT agility. This is one reason why ZK Research estimates that organizations spent more than US$12 billion in 2014 on technologies to build private clouds, which are enablers of IT agility.

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