Digital Disruption to Displace Almost Half of Industry Leaders

New Study from the Global Center for Digital Business Transformation shows that only 25 percent of companies are taking proactive steps to address digital disruption
Pete Goldin
APMdigest

The effect of digital disruption on business has the potential to overturn incumbents and reshape markets faster than perhaps any force in history, according to a new report released today by the Global Center for Digital Business Transformation (DBT Center), an initiative between Cisco and the International Institute of Management Development (IMD) in Lausanne, Switzerland.

The report, entitled Digital Vortex: How Digital Disruption is Redefining Industries, shows that digital disruption will displace approximately 40 percent of incumbent companies in each of the 12 industries studied for the report within the next five years. Among the 12 industries highlighted in the report, Technology Products & Services has the highest potential for disruption over the next five years. However, the report also shows data-driven industries in general top the disruption potential list, including Media & Entertainment, Telecommunications, Financial Services and Retail. According to the report, these are industries that rely on technology-enabled networks to exchange digital value, including data and transactions.

Despite digital disruption's potential to overturn incumbents and reshape markets, the survey indicated 45 percent of companies do not believe digital disruption merits board-level attention.

"Every country, every city and every business will be required to become digital in order to thrive and survive in the new digital economy," said Martin McPhee, SVP, Cisco Consulting Services. "The Global Center for Digital Business Transformation, which brings together digital disruption and education, will serve as a platform for executives to be educated on the why, what and how required for their digitization journey and the ultimate sustainability of their organizations."

Most executives surveyed see digitization as a positive for business and society. In fact, 75 percent of executives surveyed believe that digital disruption is a form of progress, 72 percent said it improves value to customers and 66 percent feel it empowers individuals. At the same time, 43 percent either do not acknowledge the risk of digital disruption, or have not addressed it sufficiently. Only 25 percent describe their approach to digital disruption as proactive.

The disruption is being driven by well-funded start-ups, digitally proactive competitors and, increasingly, the merging of industries as digitization frees businesses to expand their value in new markets.

On average, executives from incumbent companies in all 12 industries revealed that they expect substantial change due to digital disruption, including shifts in market share within five years. Yet, the survey indicates that nearly a third of incumbent companies are taking a "wait and see" approach, in the hopes of emulating successful competitors.

"It's not just business models that are changing, it's value chains and product offerings as well. Digitization is not just changing industries, it is increasingly blurring the lines between them," said Michael Wade, Director of the DBT Center and Professor of Innovation and Strategy at IMD. "As industries move toward the center of the Digital Vortex, physical components - to the extent that they inhibit competitive advantage - are shed. The most successful disruptors employ what we refer to as ‘combinatorial disruption,' in which multiple sources of value—cost, experience, and platform–are fused to create disruptive new business models and exponential gains."

The term "Digital Vortex" describes the driving force created by digitization across all industries and how companies are being inevitably pulled toward the center of the phenomenon. The Digital Vortex research into the challenges and opportunities posed by digital disruption is an important first step for the DBT Center in what will be a five-year journey for IMD, Cisco, and an ecosystem of other partner organizations.

The report, Digital Vortex: How Digital Disruption is Redefining Industries, investigated the state of digital disruption and the outlook for industries through a survey of 941 business leaders in 12 industries and 13 countries including Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russia, United Kingdom, and the United States.

Pete Goldin is Editor and Publisher of APMdigest

Related Links

Hot Topics

The Latest

Keys to Building a Partner Ecosystem That Scales

I've spent a lot of time in the channel, and one thing I keep coming back to is this: a partner program is only as good as what it looks like in the field. Many programs look great on paper, but when a partner is in front of a customer navigating a complex hybrid environment or trying to make the case for AI-powered observability, the gap between what a vendor promises and what it actually delivers becomes very clear, very fast ...

How AI Agents Are Reshaping DataOps for the Always-On Enterprise

Enterprises today operate in a real-time environment where uninterrupted access to trusted data has become a baseline expectation for users, applications and automated systems. Traditional DataOps models, built on manual effort and human triage, cannot keep pace with this always active demand. AI agents are emerging as the operational backbone, ensuring consistent data availability, reinforcing trustworthiness and enabling a level of scale that manual processes cannot achieve ...

AI Deepfakes: Rethinking Trust in the Workplace

For decades, trust in the digital workplace rested on familiar signals. We trusted faces on video calls, voices on the phone, and emails that appeared to come from people we knew. These cues felt human and intuitive. They anchored how decisions were made, approvals were granted, and access was authorized. AI-powered deepfakes have quietly broken that model ...

Nine in Ten Enterprises Plan Cloud Data Repatriation amid Rising Cloud Costs and Data Sovereignty Mandates

Cloud migration was supposed to be a one-way door. For most enterprises, it turns out it isn't. Cloud data repatriation is a real and growing trend. A new survey ... finds that 89% of organizations plan to expand their on-premises infrastructure footprint over the next two years — and 75% have already moved at least some workloads back from public cloud in the past 24 months. The findings point to a broad rethinking of where data belongs ...

Why ITOps Need Right-Sized AI, Not Bigger Models

Over the past few years, large language models (LLMs) have revolutionized the software industry. Given their ability to excel at multi-step reasoning, LLMs have helped enterprises streamline workflows and adapt to the unknown. However, employing such models comes with sky-high costs, latency issues, and limited flexibility. In the realm of IT operations, it is generally wiser to employ smaller, domain-specific models instead ...

The End of Reactive DevOps: AI-Driven Observability for Zero-Defect Digital Systems

For years, DevOps teams operated under a simple assumption: collect enough telemetry, and you can find and fix any problem. That assumption is breaking down. Modern enterprises now operate across microservices, hybrid cloud environments, APIs, Kubernetes, and highly automated delivery pipelines. Releases happen continuously, dependencies shift constantly, and failures spread faster than teams can diagnose them ...

5 Takeaways from the Observability Forecast for Media and Entertainment

New Relic surveyed IT and engineering leaders from the media and entertainment (M&E) sector to understand what's working — and where challenges persist with their observability practices. The findings reveal how M&E organizations are navigating rising platform complexity, audience expectations, and AI-driven change. Below are five takeaways that stand out ...

Why Moving Off the Cloud Is the Easy Part and What Comes Next Is Where Things Get Hard

Let me start with something I've seen play out more times than I can count. A team hits a wall with the cloud. Costs creep up, then spike. Performance starts to feel inconsistent. Someone in finance asks a simple question like "why did this double?" and nobody has a clean answer ... Maybe this isn't the right place for everything. That realization feels like a breakthrough, like you've identified the problem. In reality, you've just identified the starting line ...

MEAN TIME TO INSIGHT Podcast - Episode 24: Network Observability Tool Sprawl

In MEAN TIME TO INSIGHT Episode 24, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at EMA discusses network observability tool sprawl ... 

Capacity Isn't a Guess: Observability-Driven Sizing for On-Prem Databases

In cloud-native systems, scaling is often as simple as moving a slider. For on-premise databases, the stakes are different. Over-provisioning hardware is expensive. Under-provisioning leads to performance bottlenecks that are difficult to fix once the equipment is in the rack ...

Digital Disruption to Displace Almost Half of Industry Leaders

New Study from the Global Center for Digital Business Transformation shows that only 25 percent of companies are taking proactive steps to address digital disruption
Pete Goldin
APMdigest

The effect of digital disruption on business has the potential to overturn incumbents and reshape markets faster than perhaps any force in history, according to a new report released today by the Global Center for Digital Business Transformation (DBT Center), an initiative between Cisco and the International Institute of Management Development (IMD) in Lausanne, Switzerland.

The report, entitled Digital Vortex: How Digital Disruption is Redefining Industries, shows that digital disruption will displace approximately 40 percent of incumbent companies in each of the 12 industries studied for the report within the next five years. Among the 12 industries highlighted in the report, Technology Products & Services has the highest potential for disruption over the next five years. However, the report also shows data-driven industries in general top the disruption potential list, including Media & Entertainment, Telecommunications, Financial Services and Retail. According to the report, these are industries that rely on technology-enabled networks to exchange digital value, including data and transactions.

Despite digital disruption's potential to overturn incumbents and reshape markets, the survey indicated 45 percent of companies do not believe digital disruption merits board-level attention.

"Every country, every city and every business will be required to become digital in order to thrive and survive in the new digital economy," said Martin McPhee, SVP, Cisco Consulting Services. "The Global Center for Digital Business Transformation, which brings together digital disruption and education, will serve as a platform for executives to be educated on the why, what and how required for their digitization journey and the ultimate sustainability of their organizations."

Most executives surveyed see digitization as a positive for business and society. In fact, 75 percent of executives surveyed believe that digital disruption is a form of progress, 72 percent said it improves value to customers and 66 percent feel it empowers individuals. At the same time, 43 percent either do not acknowledge the risk of digital disruption, or have not addressed it sufficiently. Only 25 percent describe their approach to digital disruption as proactive.

The disruption is being driven by well-funded start-ups, digitally proactive competitors and, increasingly, the merging of industries as digitization frees businesses to expand their value in new markets.

On average, executives from incumbent companies in all 12 industries revealed that they expect substantial change due to digital disruption, including shifts in market share within five years. Yet, the survey indicates that nearly a third of incumbent companies are taking a "wait and see" approach, in the hopes of emulating successful competitors.

"It's not just business models that are changing, it's value chains and product offerings as well. Digitization is not just changing industries, it is increasingly blurring the lines between them," said Michael Wade, Director of the DBT Center and Professor of Innovation and Strategy at IMD. "As industries move toward the center of the Digital Vortex, physical components - to the extent that they inhibit competitive advantage - are shed. The most successful disruptors employ what we refer to as ‘combinatorial disruption,' in which multiple sources of value—cost, experience, and platform–are fused to create disruptive new business models and exponential gains."

The term "Digital Vortex" describes the driving force created by digitization across all industries and how companies are being inevitably pulled toward the center of the phenomenon. The Digital Vortex research into the challenges and opportunities posed by digital disruption is an important first step for the DBT Center in what will be a five-year journey for IMD, Cisco, and an ecosystem of other partner organizations.

The report, Digital Vortex: How Digital Disruption is Redefining Industries, investigated the state of digital disruption and the outlook for industries through a survey of 941 business leaders in 12 industries and 13 countries including Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russia, United Kingdom, and the United States.

Pete Goldin is Editor and Publisher of APMdigest

Related Links

Hot Topics

The Latest

Keys to Building a Partner Ecosystem That Scales

I've spent a lot of time in the channel, and one thing I keep coming back to is this: a partner program is only as good as what it looks like in the field. Many programs look great on paper, but when a partner is in front of a customer navigating a complex hybrid environment or trying to make the case for AI-powered observability, the gap between what a vendor promises and what it actually delivers becomes very clear, very fast ...

How AI Agents Are Reshaping DataOps for the Always-On Enterprise

Enterprises today operate in a real-time environment where uninterrupted access to trusted data has become a baseline expectation for users, applications and automated systems. Traditional DataOps models, built on manual effort and human triage, cannot keep pace with this always active demand. AI agents are emerging as the operational backbone, ensuring consistent data availability, reinforcing trustworthiness and enabling a level of scale that manual processes cannot achieve ...

AI Deepfakes: Rethinking Trust in the Workplace

For decades, trust in the digital workplace rested on familiar signals. We trusted faces on video calls, voices on the phone, and emails that appeared to come from people we knew. These cues felt human and intuitive. They anchored how decisions were made, approvals were granted, and access was authorized. AI-powered deepfakes have quietly broken that model ...

Nine in Ten Enterprises Plan Cloud Data Repatriation amid Rising Cloud Costs and Data Sovereignty Mandates

Cloud migration was supposed to be a one-way door. For most enterprises, it turns out it isn't. Cloud data repatriation is a real and growing trend. A new survey ... finds that 89% of organizations plan to expand their on-premises infrastructure footprint over the next two years — and 75% have already moved at least some workloads back from public cloud in the past 24 months. The findings point to a broad rethinking of where data belongs ...

Why ITOps Need Right-Sized AI, Not Bigger Models

Over the past few years, large language models (LLMs) have revolutionized the software industry. Given their ability to excel at multi-step reasoning, LLMs have helped enterprises streamline workflows and adapt to the unknown. However, employing such models comes with sky-high costs, latency issues, and limited flexibility. In the realm of IT operations, it is generally wiser to employ smaller, domain-specific models instead ...

The End of Reactive DevOps: AI-Driven Observability for Zero-Defect Digital Systems

For years, DevOps teams operated under a simple assumption: collect enough telemetry, and you can find and fix any problem. That assumption is breaking down. Modern enterprises now operate across microservices, hybrid cloud environments, APIs, Kubernetes, and highly automated delivery pipelines. Releases happen continuously, dependencies shift constantly, and failures spread faster than teams can diagnose them ...

5 Takeaways from the Observability Forecast for Media and Entertainment

New Relic surveyed IT and engineering leaders from the media and entertainment (M&E) sector to understand what's working — and where challenges persist with their observability practices. The findings reveal how M&E organizations are navigating rising platform complexity, audience expectations, and AI-driven change. Below are five takeaways that stand out ...

Why Moving Off the Cloud Is the Easy Part and What Comes Next Is Where Things Get Hard

Let me start with something I've seen play out more times than I can count. A team hits a wall with the cloud. Costs creep up, then spike. Performance starts to feel inconsistent. Someone in finance asks a simple question like "why did this double?" and nobody has a clean answer ... Maybe this isn't the right place for everything. That realization feels like a breakthrough, like you've identified the problem. In reality, you've just identified the starting line ...

MEAN TIME TO INSIGHT Podcast - Episode 24: Network Observability Tool Sprawl

In MEAN TIME TO INSIGHT Episode 24, Shamus McGillicuddy, VP of Research, Network Infrastructure and Operations, at EMA discusses network observability tool sprawl ... 

Capacity Isn't a Guess: Observability-Driven Sizing for On-Prem Databases

In cloud-native systems, scaling is often as simple as moving a slider. For on-premise databases, the stakes are different. Over-provisioning hardware is expensive. Under-provisioning leads to performance bottlenecks that are difficult to fix once the equipment is in the rack ...