It's the time of year when researchers tweak their models, update their forecasts and publish their annual predictions for the new year. IDC is no exception and indeed we're already well into the season of presentations and calls to clients giving our views of what's going to happen next.
Obviously, in Europe the economic crisis is exerting an enormous influence on the market. Early results from our pan-European survey of IT buyers indicate that the second half of 2011 saw severe reining-in of IT spend as the optimistic budgets of Q1 2011 were slashed and replaced with far more conservative spending plans by midyear as the scale of the sovereign debt issue became apparent. However, plans for 2012 are not dramatically lower than for 2011 - in most cases, the budgets that were already cut in 2011 are left as they are - for now.
Otherwise, the big issues this year are around mobile computing, cloud services, social networking, and big data analytics - these are all in their own way revolutionary technologies with both IT and business implications and 2012 is the year in which they really begin to strongly affect the core business - it's the mainstream business leadership that's starting to "get" the potential (both good and bad) of these technologies, not just the IT department or the youngsters sneaking them into the enterprise though the back door.
Bottom Line for ICT Buyers:
1. Retrench in 2012, but don't panic, and invest where possible. You probably spent 2011 cutting back the optimistic investment plans you drew up in 4Q 2010 or 1Q 2111, and you are probably prepared psychologically for a very tough year in 2012. So the key to using ICT successfully in 2012 will partly be to get "more for less" from suppliers, as was the case in 2009, but just as important is the potential to use some of the ICT costs savings you will make in 2012 to fund new projects that make the organization more agile, better loved by its customers, or even generate new revenues directly. You always have to cut as you go into a recession, but you can never cut your way out of a recession.
2. Focus on the business opportunities (while being mindful of the risks) of the potentially game-changing technologies - mobile, cloud, social networking, and big data analytics. Cloud, in particular, is a step-change in IT provision, and IDC predicts that it will turn out to be as big a transformation as client/server in the 1980s and the web in the 1990s. Technology revolutions don't just democratize and popularize technology, they have the power to create entirely new, previously unimagined business models - eBay, Amazon and Facebook were simply unimaginable before the Web. Will cloud spawn equivalents of these three? If so, could they put your company out of business if you don't react fast enough? Technology revolutions carry immense business risk as well as opportunity.
3. Keep a careful eye on the vendor landscape in 2012, and watch for signs of vendor "fatigue". In IT services, we're expecting another round of vendor consolidation, with a major IT services player disappearing as a separate entity in 2012. Vendor consolidation doesn't have to be a bad thing - the acquiring vendor can sometimes drive significant improvement in customer service, for example - but it brings the risk of service disruption and, by reducing the over-supply of vendors, it counteracts the price pressure that has benefited enterprises over the last three years. But we do not see prices rising in 2012 for services players; indeed, we expect to see them fall again as budgets remain flat or trends downwards.
Obviously, in Europe the economic crisis is exerting an enormous influence on the market. Early results from our pan-European survey of IT buyers indicate that the second half of 2011 saw severe reining-in of IT spend as the optimistic budgets of Q1 2011 were slashed and replaced with far more conservative spending plans by midyear as the scale of the sovereign debt issue became apparent. However, plans for 2012 are not dramatically lower than for 2011 - in most cases, the budgets that were already cut in 2011 are left as they are - for now.
Otherwise, the big issues this year are around mobile computing, cloud services, social networking, and big data analytics - these are all in their own way revolutionary technologies with both IT and business implications and 2012 is the year in which they really begin to strongly affect the core business - it's the mainstream business leadership that's starting to "get" the potential (both good and bad) of these technologies, not just the IT department or the youngsters sneaking them into the enterprise though the back door.
Bottom Line for ICT Buyers:
1. Retrench in 2012, but don't panic, and invest where possible. You probably spent 2011 cutting back the optimistic investment plans you drew up in 4Q 2010 or 1Q 2111, and you are probably prepared psychologically for a very tough year in 2012. So the key to using ICT successfully in 2012 will partly be to get "more for less" from suppliers, as was the case in 2009, but just as important is the potential to use some of the ICT costs savings you will make in 2012 to fund new projects that make the organization more agile, better loved by its customers, or even generate new revenues directly. You always have to cut as you go into a recession, but you can never cut your way out of a recession.
2. Focus on the business opportunities (while being mindful of the risks) of the potentially game-changing technologies - mobile, cloud, social networking, and big data analytics. Cloud, in particular, is a step-change in IT provision, and IDC predicts that it will turn out to be as big a transformation as client/server in the 1980s and the web in the 1990s. Technology revolutions don't just democratize and popularize technology, they have the power to create entirely new, previously unimagined business models - eBay, Amazon and Facebook were simply unimaginable before the Web. Will cloud spawn equivalents of these three? If so, could they put your company out of business if you don't react fast enough? Technology revolutions carry immense business risk as well as opportunity.
3. Keep a careful eye on the vendor landscape in 2012, and watch for signs of vendor "fatigue". In IT services, we're expecting another round of vendor consolidation, with a major IT services player disappearing as a separate entity in 2012. Vendor consolidation doesn't have to be a bad thing - the acquiring vendor can sometimes drive significant improvement in customer service, for example - but it brings the risk of service disruption and, by reducing the over-supply of vendors, it counteracts the price pressure that has benefited enterprises over the last three years. But we do not see prices rising in 2012 for services players; indeed, we expect to see them fall again as budgets remain flat or trends downwards.
