Digital transformation is the changes associated with the application of digital technology in all aspects of human society.

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2 Digital transformation is the changes associated with the application of digital technology in all aspects of human society. [1] Digital transformation may be thought of as the third stage of embracing digital technologies: digital competence digital usage digital transformation, with usage and transformative ability informing digital literacy. The transformation stage means that digital usages inherently enable new types of innovation and creativity in a particular domain, rather than simply enhance and support the traditional methods. [2]

3 Steam, water, mechanical production equipment Division of labor, electricity, mass production Electronics, IT, automated production Blurring the physical and the digital divide Industrial Revolution 4.0

4 In 1971 small company Intel released 4004, first ever microprocessor. It had only transistors. Today, modern architectures have over 1.75 billion transistors, delivering times more computing power.

5 In 1975 Microsoft was born, bringing power of the computing to the masses A computer on every desktop and in every home, Microsoft vision

6 40 years later... Digital Economy is leading us to new Industry 4.0 Revolution. Digital Economy will reach EUR 3.2 trillion in the G-20 economies and already contributes up to eight per cent of GDP, powering growth and creating jobs.

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11 Supercomputers in our hands.

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13 Seeing the world with new eyes The world s largest taxi company does not own any taxis The world s largest phone company does not own any infrastructure The world s largest cinema house does not have any cinemas The world s largest accommodation provider does not own accommodations The world s most valuable retailer does not have any inventory The world s most popular media owner does not create any content 13

14 Astonishing Pace of Change Source: World Economic Forum The cost of key technologies has fallen rapidly. Time to reach $1B valuation or more.

15 Affordable Transformative Technology Connecting Physical and Digital Industrial Robots 3% of 2007 Cost DNA Sequencing.01% of 2007 Cost Solar Power.5% of 1984 Cost 3D Printers, $500 1% of 2007 Cost Drones, $700 1% of 2007 cost Media Telecom Retail & CPG Financial Services Automotive Healthcare Manufacturing Public Sector Sensors.3% of 2007 Cost Virtual Reality, $600 $600, 1% of 2007 cost Smartphones

16 Wearables Motion Sensing Technology Voice Recognition Holographic Computing

17 YEARS IN BUSINESS Digital Era Value Very Sobering Reality. Digital Companies grow fast and disrupt further $25b $50b $75b $100b $200b $300b $400b $500b

18 WORLD IS CHANGING IS GONE % O U T O F L A R G E S T G LO B A L C O M PA N I E S i n 1955

19 Digital Business Transformation: Designing for your future customer Business architecture is now a strategic variable... Do not harness technology to the imperatives of the business model, but rather, adopt the business to the possibilities of the technology. ~ Paraphrased from Boston Consulting Group, BCG Perspectives, Oct. 2016

20 Trends that will transform business, next five years (%) Technological advances Demographic shifts Shift in global economic power Resource scarcity & climate change Urbanization Source: PWC CEO Survey 86% of CEOs consider Digital their #1 Priority CEOs believe technology will transform their business more than any other global trend

21 Digital transformation is both inevitable and mandatory In the midst of a major tech revolution, aka the 4 th industrial revolution #1 priority on our customers agenda There is no other company than Microsoft that can have that kind of dialogue with customers with credibility ~ Satya Nadella 25% of the world s economy will be digital by 2020 Organizations mature in their journey generate 100M+ more operating income than those that lag behind

22 Top of mind for business leaders and their digital transformation Digital transformation = Cultural shift technology problem 1 RIGHT SKILLS shortage 42% of CIOs with hiring plans are in search of people with combined TECH BUSINESS +backgrounds 4 By 2018, AI will be incorporated into 1/2 of all apps developed. By 2020, savings garnered by AIenabled efficiencies are expected to total an estimated U.S. 60Bfor enterprises 7 The most commonly cited barrier to digitization for most CIOs 2 Most important decision CEOs must make in 2016 is to$ invest in data science development 5 29% of the respondents identified IoT initiatives and related machine-tomachine and telematics projects as new areas of spending for the year ahead 8 Central to any digital workplace initiative: increasing the involvement of the employee community in technology strategies 3 The CIO s challenge is to convince the entire enterprise that SECURE BY DESIGN should be treated as a business priority 6 30% By the end of 2016, of businesses will have begun monetizing their information assets, which is fueling an information-driven economy targeted at $156B9 Organizations can t transform to digital unless people do Leaders embrace digital-first to fast track transformation Harness information to change the way you do business 1 Forrester Research. The race to digital mastery is on in Forrester. November 11, Andy Rowsell-Jones, et al CIO Agenda: Global Perspectives on Building the Digital Platform. Gartner. February 23, Matthew W. Cain and Paul Miller. Recipe for Digital Workplace Execution: Transform the Employee Experience. Gartner. March 3, Beth Stackpole. Forecast 2016: 5 fast-track trends to tackle now (and one to ignore). CIO. December 1, Ken McGee and Mark Raskino. The Most Important Digital Business Decision Senior Executives Must Make in Gartner. February 16, Marcus Shingles et al. Tech Trends 2016: Innovating in the digital era. Deloitte. February 22, John Dodge. Who s in charge of AI in the enterprise? CIO. February 15, Beth Stackpole. Forecast 2016: 5 fast-track trends to tackle now (and one to ignore). CIO. December 1, Mike J. Walker, et al. Top 10 Strategic Technology Trends for 2016: Information of Everything. Gartner. February 26, 2016.

23 Global IT budgets: Digital transformation and cost savings priorities Digitization of labor, capital, and multifactor productivity Combined annual impact: $1.6T - $2.2 T by US GDP +6% - 8% TECHNOLOGIES are moving faster than the EXPERTISE needed to exploit them can be disseminated to the workforce 7 OPERATIONS 57% 16 % INNOVATION 4 BASELINE PROJECTIONS gov.uk saved ½ 63M 9% 60B reduce employee-related costs by 7% of all apps developed will incorporate artificial intelligence By 2020: in public spending within a year of its launch 2 Digital labor platforms can: increase output by AI By 2018: 3 ACCESS INFRASTRUCTURE DIGITAL LITERACY DIGITAL TOOLS encouraging workers to participate in the digital economy 8 in savings garnered for U.S. enterprises 5 40% reduction in IT expenses for organizations after deploying a private cloud 6 30% By 2018, of organizations will formalize workforce digital literacy strategies to improve business outcomes and employee engagement 9 Digitalization drives down costs Investments in innovation pay off in efficiency Future-ready your workforce through digital literacy 1 James Manyika. Digital America: A tale of the haves and have-mores. McKinsey. January 12, bn saved in 2012/13: Efficiency and reform 2012/13 summary report, UK Cabinet Office, Susan Lund et al. Managing talent in a digital age. McKinsey. February 29, Marcus Shingles et al. Tech Trends 2016: Innovating in the digital era. Deloitte. February 22, John Dodge. Who s in charge of AI in the enterprise? CIO. February 15, Jim Rapoza. Rounding Up Virtual Machine Sprawl With Private Cloud. Aberdeen. January 4, Bill Snyder. The 6 Hottest New Jobs in IT. CIO. March 7, James Manyika. Digital America: A tale of the haves and have-mores. McKinsey. January 12, Gavin Tay and Achint Aggarwal. Examining the Promise and Progress of Digital Workplace Programs Globally. Gartner. January 27, in savings garnered for U.S. enterprises 5

24 All industries are investing heavily in digital transformation 2016 $ Billions Forecasted digital transformation spend $ billions 1 2 Financial services Public sector $ Telco and media Advanced manufacturing Retail/wholesale trade Health Professional services Basic goods manufacturing Utilities billion Forecasted digital transformation spend for top ten highestspending industries 10 Transportation calculated based on 2015 actuals from Gartner plus an 8% CAGR Source: IDC, PAC, Gartner, Markets and Markets, MGI analysis

25 But cloud momentum continues to accelerate If you re resisting the cloud because of security concerns, you re running out of excuses. The question is no longer: How do I move to the cloud? Instead, it s Now that I m in the cloud, how do I make sure I ve optimized my investment and risk exposure? By 2020 clouds will stop being referred to as public and private. It will simply be the way business is done and IT is provisioned.

26 Digital Leadership is Now a Continuous Process Expanding competitive radar screen; non-traditional competitors Creative, new business models Fast imitation and commoditization Highly information intensive digital business designs Extended, complex information chains Traditional Product Other Influencers New Players Other Providers Traditional Competitors Higher Order Opportunities Economics Services 26

27 27 Thinking BIG with customers is all about impacting the Digital Business Model Value Creation Effort Focus Digital Transformation New ways to create value with a digital business THINK BIG Digital Effectiveness Redesign and digitize processes to more fully reach desired outcome Value Creation + Digital Efficiencies Digital Replacement Digitize existing processes to reduce waste of time, effort and expense Replace existing digital capabilities with lower cost ones Value Destruction - The value created by any change decays over time Business as Usual Value is created when things change, so no value creation Time Digital Business Transformation Impact over Time

28 Data is increasing at rates never witnessed before ZETTABYTES OF DATA 30% of businesses will have begun monetizing their information assets, which is fueling an information-driven economy targeted at $156B9 By the end of 2016, 1 ZETTABYTE = 1B TERABYTES

29 In 2016, world around us is different. And we needed a different mission. Empower every person and every organization on the planet to achieve more. Microsoft Mission

30 Digital transformation focus ENGAGING CUSTOMERS Give them new experiences they love EMPOWERING EMPLOYEES Reinvent productivity and enable a datadriven culture OPTIMIZING OPERATIONS Modernize portfolio, transform processes and skills TRANSFORMING PRODUCTS Innovate products and business models

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33 Your Digital Transformation Journey Our Approach Drive, orchestrate and document a co-created digital transformation journey, your Book of Dreams Build a digital innovation lab within a customer s location, and start to bring the book of Dreams to life, your Digital Dream Factory Identify, with customer sponsor, a digital transformation team, your Dream Team

34 Current Threat Landscape

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37 THE REVOLUTION CYBER-CRIME CYBER-ESPIONAGE CYBER-WARFARE CYBER-TERROR

38 FUNDAMENTALLY, IF SOMEBODY WANTS TO GET IN, THEY'RE GETTING IN ACCEPT THAT. WHAT WE TELL CLIENTS IS: NUMBER ONE, YOU'RE IN THE FIGHT, WHETHER YOU THOUGHT YOU WERE OR NOT. NUMBER TWO, YOU ALMOST CERTAINLY ARE PENETRATED. Michael Hayden Former Director of NSA & CIA

39 Defenders think in lists; attackers think in graphs. As long as this is true, attackers win. John LaTour (and others)

40 The Pass-The-Hash Nuclear Bomb Adversaries get in at an edge A Real Graph Example and then traverse the graph to the target

41 Attackers / Defenders points of view Attackers think in graphs Defenders think in lists Firewall Anti-virus Security Logs Incident Response Plan Assets Networks Applications Users Recon & Targeting Delivery Establish Foothold Escalate Lateral Movement Persistenc e Mission Objective Prepare & Watch Detect Alert & Mobilize Triage Investigat e Response COAs Execute

42 Credential Theft? Denial of Service?

43 STRIDE mnemonic STRIDE helps you think through potential threats more completely Threat Spoofing Tampering Repudiation Information Disclosure Denial of Service Elevation of Privilege Plain English Impersonation Unauthorized Modification False claim of I didn t do that bad thing They got the files (or encryption keys) Unavailable They aren t supposed to be an administrator!

44 A Data Breach starts with Identity Breach and Loss of Control Loss of Control often leads to Denial of Service (Cyber Terror)

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48 Cybersecurity Framework Defend against Determined Human Adversaries and Advanced Persistent Threats (APTs) Protect, Detect, and Respond to malicious activity from targeted attacks

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50 HOW DO YOU SEE YOUR FUTURE?

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