When businesses finally open up their wallets, what technologies will get the flash of cash?
The severity of the downturn in the IT industry in 2001 took me by surprise. Technology investment levels kept a steady pace throughout 2000, and there seemed no reason to suspect 2001's downturn. That's why I admire those analysts prepared to take a punt on what will happen in the industry over the coming year, because projecting the future requires the analyst to nail their colours - and reputation - to the mast.
The brave soul who does this each year at IDC is John Gantz. He collates the information IDC gathers from its studies and then identifies the technologies and services most likely to be in demand in the next 12 months. Locally, IDC analysts adjust these predictions based on their own research.
While IDC is fairly bullish about prospects for the Australian IT market, CIOs still appear guarded about what they purchase. There is still a lot of uncertainty in many organisations and this will work against many big-ticket IT projects. Instead, IDC expects CIOs to spend on business continuity, security, storage solutions and Internet related activities. Certainly, from my discussions with CIOs I see a lot of interest in security related IT products and services; even before September 11 a session on the topic of IT security drew the highest audience to an InTEP session in New Zealand.
While dotcoms are now pretty much dot-gones, there is still a long way to go before most organisations exhaust the potential of the Internet. IDC pinpoints a number of technologies and services in this arena it believes will experience a compound annual growth rate (CAGR) of over 30 per cent between 2001 and 2005. These are: virtual private networks; Web hosting; voice over IP and ASP services.
Mobile solutions will also flourish. While the Internet may play a role in facilitating this, competition in the telecommunications marketplace and the increasing versatility of both the mobile phone and the PDA will also be a major influence. Furthermore, the changing patterns of work, (telecommuting), also lend themselves to creative mobile functionality.
The final application IDC identifies is CRM, which has certainly had a patchy track record. Several InTEP CIOs have it under a watching brief but struggle for a substantial business case to support such a major investment in these uncertain times. Perhaps if the economy starts to settle down CRM may get a boost.
I believe that IT will be in a holding pattern for much of 2002. CIOs will get sign-off for technologies that afford cost savings such as storage area networks and thin-client computing; but the days of the reflex upgrade are long gone. I suspect this will impact the adoption of Windows XP and faster PCs. The good news for desktop vendors is that by year's end much of the kit bought for Y2K upgrades will be around three years old. A good deal of this will have been completely depreciated or out of lease. Therefore, we could see the freeing of new funds that could make 2003 the year when IT starts to become healthy again.
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