Lippis Report Issue 117: Top 10 IT Predictions For 2009
This is not 2001, but 2009. This recession’s impact on the IT industry is nothing like the Great IT Depression of 2001 when $5 trillion of IT market value was wiped out, IT firms worked off large product inventories pushing margins down and hundreds of thousands of IT jobs were lost. 2009 IT spending is projected to be +/- 2%, which does not include the yet to be approved $700 to $850B stimulus package which IT will benefit from because of its universal broadband, healthcare IT investment, smart grid and green energy initiatives. In fact IT jobs, especially those with networking skills, are in demand. But 2009 is similar to 2001 in one regard: IT leaders are flocking to the safety of large IT suppliers who possess healthy balance sheets and staying power; companies such as IBM, Cisco, HP, Microsoft, CA, Oracle, et al. No doubt there is caution in the air as IT leaders focus on smaller projects that have quick payback or large IT projects that can be delivered at speed to realize business value in short order. While the first two quarters may be slower than normal, the hope is that the back end of 2009 will be stronger. With this as a backdrop here are our Top 10 IT Predictions for 2009:
Increasing Corporate Value Though Integrated Networks and Applications
Prediction 1: 2009 is the year of Data Center Redesign. Data center projects including consolidation, greening, virtualization and increasing cloud computing have been accelerated thanks to the macro economic climate and are in full force now and for the foreseeable future. In addition to strong economic incentives which take advantage of increased performance at lower cost including dollars, footprint, carbon, etc., with the downturn in the economy internet usage has spiked. As companies cut travel, training, conferences, trade shows, etc., employees have turned to the web for conferencing, training and collaboration. Consumers too have turned to on-line shopping to reap greater discounts then those from brick and mortar stores, fueling the demand for greater data center performance. Also data center performance upgrades cannot be pushed out in time like desktop operating systems and operational IT infrastructure.
Kevin Kennedy Joins Avaya As New CEO
Prediction 2: HP, IBM and Cisco are on Collision Course over Data Center Dominance. HP, IBM and Cisco will position for dominance in the data center space in 2009 thus putting them on a competitive collision course. The drivers are mainly a result of the macro economic cycle causing IT leaders to flock to the safety of large IT suppliers and the up tick in data center projects. Cisco, HP and IBM are augmenting their data center solution with adjacent offerings crossing into each other’s traditional markets which is sure to change these once friendly partners into fierce competitors.
The Network’s Sustainability Effect
Prediction 3: IT Suppliers step up to offer IT and non-IT Energy Efficient Solutions. 2009 will bring energy conservation and efficiency solutions from IT suppliers that transcend their own products to control energy consumption of IT and non-IT devices. In addition to more energy efficient power suppliers and cooling technologies, IT firms will offer architectures and solutions that allow IT and business leaders to monitor and manage the energy consumption of not only IT devices but facility systems such as lighting, AC, Heading, etc.
Top Ten 2009 Predictions
Prediction 4: Unified Communications gets Folded into Collaboration Solutions. In addition to standalone UC offerings UC will be increasingly integrated into collaboration offerings. Further, the communications-enabled business processes market, while still small will segment into technology specific-enabled business processes. In 2009 a mobile-enabled business process, video-enabled business process, cloud-enabled business process, etc., will emerge to address business needs to streamline processes and improve productivity.
Extreme Savings: Cutting Costs with Wide-Area Data Services
Prediction 5: Enterprise Grade Facebook-Like Social Networking with UC, Video et al Takes Off Thanks To Efficiency/Productivity Gains. Call it Web 2.0, enterprise 2.0, etc., but in 2009 the combination of social networking, collaboration, UC and video will come together to offer business and IT leaders a bottoms up approach to self organizing into groups of people that share information to advance projects and improve workflow. In short, enterprise grade facebook style social networking complete with UC, presence, video, etc., will transform how people organize within a corporation to deliver work.
Five Steps to Successful IT Consolidation
Prediction 6: IT Leads The Economy Out Of Its Slump. Business and IT leaders realize that sustainable productivity gains come from business process streamlining and automation. IT provides the automation. In addition new data center designs and collaboration models increase business value creation and productivity. After RIF (Reduction in Force) and business process review, IT is the only tool available to create sustainable business value.
Ethernet: The High Bandwidth Low-Latency Data Center Switching Fabric
Prediction 7: IT Organizations Are Redesigned. To support user programmable enterprise web 2.0 services and data center convergence IT leaders will be forced to review their existing mode of operation and organization. Gone will be the silo skills of security, communications, networking, storage, servers, applications, etc., and instead there will be a horizontal IT organization that delivers services and infrastructure. The delineation between user and IT procured will change with IT providing infrastructure and collaboration, in which users freely insert content and program to their liking. In the data center the segmentation of IT skills based upon technologies and administrative domains will change too as technologies cross old boundaries and vendors offer broader solutions.
Cisco Aims to Improve Power Usage in Data Centers
Prediction 8: Brocade, Juniper and Extreme Are Not Standalone Firms By Year End 2009. There will be vendor consolidation in 2009 and with data center projects garnering the lion’s share of market dollars, a big black hole will form sucking smaller players into the portfolio of larger ones. It’s not clear if Juniper will be an acquirer or be acquired as its market value is nearly $10B, which yields it options.
Prediction 9: Microsoft Finds That OCS Lacks Industry Traction. It’s taking much longer for Microsoft’s OCS to gain industry traction. There are no 10,000 seat deployments of OCS to which one can point. So far the traditional enterprise communication suppliers are doing very well with their UC offerings including Cisco, Avaya, Siemens, ShoreTel and Mitel. It does not help Microsoft that its main partner, Nortel is bankrupt and maybe preparing a chapter 7 filing liquidation. Also it’s difficult to change the mind of IT leaders now as they are so focused on short-term projects. Microsoft’s UC solution is based upon presence while all the other communication company’s UC offerings are based upon VoIP/IP telephony. So 2009 does not look like Microsoft’s year for OCS, but don’t count them out, perhaps 2010 is their year.
Prediction 10: Wireless LANs Connections Increase. 2009 may very well be the cross-over year where wireless connections outgrow those that are wired. This would be a major turning point in the fortunes of companies that produce ethernet switches and WLAN products. Clearly firms such as Cisco and HP ProCurve offer both wired and WLANs, but Juniper, Extreme and Foundry offer limited WLAN solutions. Companies such as Aruba, Ruckus Wireless, Trapeze Networks, et al, are poised to gain as this cross-over takes place.