Worldwide spending on information technologies will continue to feel the effects of the global recession throughout 2010.  According to a new forecast from IDC, worldwide IT spending will increase by just 3% in 2010 at constant currency.  In the U.S., IT spending is forecast to increase by less than 3%.  “Despite pent-up demand for upgrades and new applications following the deep spending cuts of the past year, economic uncertainty will combine with capital and credit constraints to inhibit spending in mature economies,” said Stephen Minton, vice president of Worldwide IT Markets and Strategies at IDC.  “The engine of global industry growth in 2010 will be in emerging markets, in particular China and India, where IT spending will recover much more quickly.”

Overall, IDC forecasts that worldwide IT spending will reach $1.48 trillion in 2010, still below the $1.5 trillion recorded in 2008.  “Following a decline in overall tech spending of 4.5% at constant currency in 2009, IT spending will not fully recover from the global recession until sometime in 2011,” Minton noted.  IDC’s forecast of 3% growth in worldwide IT spending is at constant currency, and does not assume future fluctuations in the value of the U.S. dollar or other international currencies over the next 12 months.  If the U.S. dollar weakens in 2010, the actual recorded growth of IT spending in US$ may be significantly higher.  Measured in U.S. dollars, worldwide IT spending declined by 8% in 2009 due to the stronger value of the dollar compared to 2008.  On a global basis, IDC expects hardware spending to grow by 5% in 2010, while software spending and IT services spending will grow by 2% and 3%, respectively, in constant currency.  In the hardware segment, worldwide PC spending is forecast to increase by 3% this year, up from the previous forecast of 2% growth, while the forecast for servers, storage, hardcopy peripherals, and network equipment have also been raised.  The outlook for software and services spending reflects the lower value of contracts signed in the past year and continued caution toward new project-based spending in mature economies.  Regional highlights from IDC’s new forecast include the following:

  • Asia/Pacific: Overall, the region will experience 6% growth in IT spending in constant currency, following a 1% decline in 2009.  However, China and India are both expected to experience double-digit growth (11.5% and 13.5%, respectively) this year.  Hardware spending will experience solid gains this year, driven by pent-up demand and new infrastructure deployment.  Following a decline of 8% last year, no IT spending growth is forecast for Japan this year.
  • EMEA: Following a worst-ever decline of 7% in 2009 at constant currency, IT spending in Western Europe is forecast to be effectively flat in 2010.  A few market segments are expected to return to positive growth, but the market sentiment across the region remains weak.  In Central and Eastern Europe, the 20% spending crash of 2009 will be followed by 9% growth in 2010.  IT spending in the Middle East and Africa will also return to growth this year (12% at constant currency) after a 2.5% decline last year.
  • Latin America: IT spending in Latin America will be up by 5% this year.  Overall spending will gradually accelerate in line with the recovery in business and consumer confidence.  Increasing market maturity in some sectors will contribute to price competition as some buyers gravitate towards low-cost solutions.  The key market of Brazil will return to a more robust level of growth by 2011.
  • North America: The gradual economic recovery will enable many U.S. organizations to relieve some of the pent-up demand for system and network upgrades following last year’s spending cuts.  But spending will continue to be cautious and, in contrast to the emerging markets, the SMB sector will struggle to fund new IT initiatives.  In Canada, a subdued market is forecast to produce a decline of 1% in IT spending this year.
Reference : http://vendor.tekrati.com/research/10642/

Dr. Atul Gawande On Complexity

Wednesday, February 3, 2010

Dr. Atul Gawande, author of the recent The Checklist Manifesto: How to Get Things Right, spoke at a California university on Jan 12th 2010.  A most engaging speech. 

He was also on BBC Worldservice’s Health Check program on Feb 1st 2010.


(audio runs 26m 28s)

Gartner’s 2010 IT Budget Survey

Monday, January 25, 2010

IT budgets will essentially be flat in 2010, increasing by a weighted global average of 1.3% in nominal terms, compared with 2009 levels where IT budgets declined 8.1%, according to results from the 2010 CIO survey by Gartner Executive Programs (EXP).  2009 was the most challenging year for IT since the survey began in 1999, and CIOs had faced multiple budget cuts wiping away four years of budget increases, giving CIOs basically the same level of resources as they had in 2005.  While there are some signs of recovery in the 2010 projections, these will not overcome last year’s cuts.  “2009 was the most challenging year for CIOs in the corporate and public sectors as they faced multiple budget cuts, delayed spending and increased demand for services with reduced resources,” said Mark McDonald, group vice president and head of research for Gartner EXP.  “This is set to change in 2010, as the economy transitions from recession to recovery and enterprises transition their strategies from cost-cutting efficiency to value-creating productivity.”

Mr. McDonald said that while technologies are transitioning from “heavy” owner-operated solutions to “lighter-weight” services, CIOs are, in turn, transitioning IT beyond merely managing resources to taking responsibility for managing results.  “Transition gives the enterprise and IT the opportunity to reposition themselves and exploit the tough corrective actions taken during the recession,” he said.  “CIOs see 2010 as an opportunity to accelerate IT’s transition from a support function to strategic contributor focused on innovation and competitive advantage.  They have aspired to this shift for years, but economic, strategic and technological changes have only recently made it feasible.”  Gartner EXP’s CIO survey findings show that, in the near term, business expectations and CIO strategies appear stable, with a continued focus on business process improvement, cost reduction and analytics.  Business expectations are shifting from a focus on greater cost-based efficiencies, to achieving better results based on enterprise and IT productivity.  These productivity gains will come from collaborative and innovative solutions that take advantage of the new “lighter-weight” services-based and social media technologies, including virtualization, cloud computing and Web 2.0 social computing.  This transition can be seen in the top 10 technology priorities for CIOs in 2010 where business intelligence, the No. 1 technology the past five years, dropped to the No. 5 priority.

These strategic, “lighter-weight” technologies are of increasing importance to the CIO.  Exploiting them provides the cost, capacity and capability gains needed to define, source, create and deploy information- and process-intensive solutions that will reshape IT and its future role.  Moreover, the technologies that CIOs are prioritizing in 2010 are technologies that can be implemented quickly and without significant upfront expense, instead of investing millions of dollars to get millions in benefits, with these technologies, up front investments are measured in thousands of dollars to get those same benefits.  “These technologies, implemented properly, create the opportunity for IT to change its role and the operational performance of the enterprise,” said Mr. McDonald.  “Asymmetric technologies like virtualization, cloud and Web 2.0 enable companies to get out from under a front-loaded heavy investment model that limits IT’s agility and flexibility.”  “While enterprises will transition at different rates and times, every CIO faces the need to raise productivity, create new capabilities and use the recovery to drive fundamentals of the current agenda and the repositioning of IT,” Mr. McDonald said.  “Such transitions will not happen overnight but they will start with the decisions and directions established in 2010.”

Reference : http://cio.tekrati.com/research/10549/

Good Design

Tuesday, November 10, 2009

Spot on.


(click for full image)

The Economist : IT Led Global Recovery ?

Saturday, October 24, 2009

…..Just how much of a boost IT can provide [to the global economic recovery] is a subject of some contention…..Moreover, it is likelier that the economy, supported by low interest rates and stimulus programmes, is reviving IT, rather than the other way around—a function of IT’s increasing pervasiveness.  It now accounts for over half of American firms’ investment in equipment (see chart).  In the countries of the OECD, the organisation’s secretariat estimates, it accounts for more than 8% of value-added and nearly 6% of employment.  Sacha Wunsch-Vincent, an economist at the OECD, says, “For most OECD countries, the prospects are of a very fragile and weak recovery, for the overall economy and thus for IT.”

…..the recession has also accelerated trends that could make for a bigger celebration later.  It has speeded up the adoption of promising new technologies, such as cloud and mobile computing. Without the crisis, consumers might not have rushed to buy cheap netbooks or even smart-phones.  Needing to cut investment, companies looked more closely at software delivered as a service over the internet.  One firm that has grown consistently this year is Salesforce.com, the largest provider of such offerings.  These trends have also been fuelled by the shift of the industry’s centre of gravity to emerging markets, where consumers have less money to spend on technology and companies are more likely to outsource their IT.  Countries such as China and India have seen IT spending increase by up to 30% annually in recent years and account for much of the industry’s recent growth.  Between 2003 and 2008, developing countries’ share of spending on IT grew from 15% to 24%, according to the OECD.  Developing countries also make more than half of the world’s electronics.  China alone churns out more than a quarter, compared with just 3% in 1995, according to Reed Electronics, another market-research firm.  As for rich countries, the crisis has prompted governments to speed up IT investments which might otherwise not have become a priority for years, says the OECD’s Mr Wunsch-Vincent.  The stimulus packages of most countries in the OECD include large sums for smart power grids, digitisation of health records and the deployment of broadband networks.  All this, he says, should boost productivity and employment in time, provided the politicians have spent wisely—a big if.

Reference : http://www.economist.com/businessfinance/displaystory.cfm?story_id=14704601

Entering the most uncertain budgeting season in history, the CIO Executive Board, a program of the Corporate Executive Board, released its IT budget outlook and CIO priorities for 2010.  The report includes detailed analysis on spending, staffing, technology adoption and performance data from nearly 200 large organizations spanning the globe and industries.  Key findings include:

  1. IT Operating and Capital Budgets Will Remain Flat in 2010 : Operating and capital budgets will remain flat into 2010, mirroring the lack of growth IT organizations saw between 2008 and 2009.  Adjusted for inflation, this represents a continued, year-over-year decline in real IT spending for 2010.  The median IT operating budget as a percent of revenue in 2009 is 2.13%.
  2. 87% of CIOs are Preparing for a Recovery, But Cautiously : Although uncertain about the shape and timing of a recovery, 87% of CIOs say they are preparing for one — 49% report revising governance models and prioritization criteria to handle increased project demand.  However, with CFOs still focused on increasing cash reserves, CIOs are seeking to balance their response with cost containment, structuring flexible arrangements with sourcing partners (42%) and leveraging cloud-based models for processing and storage (26%) that will allow them to add capacity only as required.
  3. Discretionary Spending, Contractors and Service Levels Targeted for Cost-Cutting:  IT organizations tried to control costs in predictable fashion in 2009:
    • Cutting discretionary spending from 24% of the IT operating budget in 2008 to 20%.
    • Reducing the number of contractors by 12% from 2008 while holding internal staffing flat.
    • ‘Rightsizing’ service levels — 26% of organizations proactively lowered end-to-end availability commitments for mission critical applications in 2009.
  4. Maintenance Consumes Two Thirds of the Operating Budget : Maintenance spending rose from 58% to 66% of the total operating budget between 2008 and 2009, reflecting a lower appetite for investments aimed at delivering new business capabilities.  But the news wasn’t all bad — IT organizations managed to preserve 8% of the operating budget for Innovation in 2009 despite the harshest economy in recent memory.
  5. Unified Communications, Desktop Virtualization and the iPhone are Beginning to Reach Maturity : CIOs report that unified communications (22%), desktop virtualization (10%) and the iPhone (9%) are starting to see broad deployment.
  6. CIOs Are Forging Their Own “Recovery” : CIOs are joining their executive teams in forging their own “recovery.” The survey revealed four key priorities for IT organizations in 2010:
    • Readying IT for a fast, flexible response to the recovery
    • Exploiting IT to enhance the end-to-end customer experience
    • Harnessing unstructured information for competitive advantage
    • Crafting a productivity strategy for social media

CIO Executive Board Executive Director Shvetank Shah says, “Although talk of an economic recovery is gathering steam, organizations are taking a ‘wait and see’ approach to increasing IT investment.  This means a second straight year of flat budgets, but it doesn’t mean that IT organizations will spend 2010 looking inward.  They’ll continue to focus on containing costs to hedge against further economic uncertainty, but CIOs will also be looking to quickly reposition as the situation changes and use new analytics and social media capabilities to better understand and serve their customers and drive productivity internally.”

Reference : http://cio.tekrati.com/research/10458/

Gartner analysts today highlighted the top 10 technologies and trends that will be strategic for most organizations in 2010…..Gartner defines a strategic technology as one with the potential for significant impact on the enterprise in the next three years.  Factors that denote significant impact include a high potential for disruption to IT or the business, the need for a major dollar investment, or the risk of being late to adopt.  These technologies impact the organization’s long-term plans, programs and initiatives.  They may be strategic because they have matured to broad market use or because they enable strategic advantage from early adoption…..The top 10 strategic technologies for 2010 include:

  1. Cloud Computing : …..Cloud-based services can be exploited in a variety of ways to develop an application or a solution.  Using cloud resources does not eliminate the costs of IT solutions, but does re-arrange some and reduce others.  In addition, consuming cloud services enterprises will increasingly act as cloud providers and deliver application, information or business process services to customers and business partners.
  2. Advanced Analytics : Optimization and simulation is using analytical tools and models to maximize business process and decision effectiveness by examining alternative outcomes and scenarios, before, during and after process implementation and execution.  This can be viewed as a third step in supporting operational business decisions.  Fixed rules and prepared policies gave way to more informed decisions powered by the right information delivered at the right time, whether through customer relationship management (CRM) or enterprise resource planning (ERP) or other applications.  The new step is to provide simulation, prediction, optimization and other analytics, not simply information, to empower even more decision flexibility at the time and place of every business process action.  The new step looks into the future, predicting what can or will happen.
  3. Client Computing : Virtualization is bringing new ways of packaging client computing applications and capabilities.  As a result, the choice of a particular PC hardware platform, and eventually the OS platform, becomes less critical.  Enterprises should proactively build a five to eight year strategic client computing roadmap outlining an approach to device standards, ownership and support; operating system and application selection, deployment and update; and management and security plans to manage diversity.
  4. IT for Green : IT can enable many green initiatives.  The use of IT, particularly among the white collar staff, can greatly enhance an enterprise’s green credentials.  Common green initiatives include the use of e-documents, reducing travel and teleworking.  IT can also provide the analytic tools that others in the enterprise may use to reduce energy consumption in the transportation of goods or other carbon management activities.
  5. Reshaping the Data Center : In the past, design principles for data centers were simple: Figure out what you have, estimate growth for 15 to 20 years, then build to suit.  Newly-built data centers often opened with huge areas of white floor space, fully powered and backed by a uninterruptible power supply (UPS), water-and air-cooled and mostly empty.  However, costs are actually lower if enterprises adopt a pod-based approach to data center construction and expansion.  If 9,000 square feet is expected to be needed during the life of a data center, then design the site to support it, but only build what’s needed for five to seven years.  Cutting operating expenses, which are a nontrivial part of the overall IT spend for most clients, frees up money to apply to other projects or investments either in IT or in the business itself.
  6. Social Computing : Workers do not want two distinct environments to support their work – one for their own work products (whether personal or group) and another for accessing “external” information.  Enterprises must focus both on use of social software and social media in the enterprise and participation and integration with externally facing enterprise-sponsored and public communities.  Do not ignore the role of the social profile to bring communities together.
  7. Security Activity Monitoring : Traditionally, security has focused on putting up a perimeter fence to keep others out, but it has evolved to monitoring activities and identifying patterns that would have been missed before.  Information security professionals face the challenge of detecting malicious activity in a constant stream of discrete events that are usually associated with an authorized user and are generated from multiple network, system and application sources.  At the same time, security departments are facing increasing demands for ever-greater log analysis and reporting to support audit requirements.  A variety of complimentary (and sometimes overlapping) monitoring and analysis tools help enterprises better detect and investigate suspicious activity – often with real-time alerting or transaction intervention.  By understanding the strengths and weaknesses of these tools, enterprises can better understand how to use them to defend the enterprise and meet audit requirements.
  8. Flash Memory : Flash memory is not new, but it is moving up to a new tier in the storage echelon.  Flash memory is a semiconductor memory device, familiar from its use in USB memory sticks and digital camera cards.  It is much faster than rotating disk, but considerably more expensive, however this differential is shrinking.  At the rate of price declines, the technology will enjoy more than a 100 percent compound annual growth rate during the new few years and become strategic in many IT areas including consumer devices, entertainment equipment and other embedded IT systems.  In addition, it offers a new layer of the storage hierarchy in servers and client computers that has key advantages including space, heat, performance and ruggedness.
  9. Virtualization for Availability : Virtualization has been on the list of top strategic technologies in previous years.  It is on the list this year because Gartner emphases new elements such as live migration for availability that have longer term implications.  Live migration is the movement of a running virtual machine (VM), while its operating system and other software continue to execute as if they remained on the original physical server.  This takes place by replicating the state of physical memory between the source and destination VMs, then, at some instant in time, one instruction finishes execution on the source machine and the next instruction begins on the destination machine.  However, if replication of memory continues indefinitely, but execution of instructions remains on the source VM, and then the source VM fails the next instruction would now place on the destination machine.  If the destination VM were to fail, just pick a new destination to start the indefinite migration, thus making very high availability possible.  The key value proposition is to displace a variety of separate mechanisms with a single “dial” that can be set to any level of availability from baseline to fault tolerance, all using a common mechanism and permitting the settings to be changed rapidly as needed.  Expensive high-reliability hardware, with fail-over cluster software and perhaps even fault-tolerant hardware could be dispensed with, but still meet availability needs.  This is key to cutting costs, lowering complexity, as well as increasing agility as needs shift.
  10. Mobile Applications : By year-end 2010, 1.2 billion people will carry handsets capable of rich, mobile commerce providing a rich environment for the convergence of mobility and the Web.  There are already many thousands of applications for platforms such as the Apple iPhone, in spite of the limited market and need for unique coding.  It may take a newer version that is designed to flexibly operate on both full PC and miniature systems, but if the operating system interface and processor architecture were identical, that enabling factor would create a huge turn upwards in mobile application availability.

Reference : http://cio.tekrati.com/research/10457/