 "It’s
getting better." That appears to be mantra for every
serious player in the technology world when 2003 comes up
for discussion. Analysts and pundits point to a number of
positive trends for companies that understand how the market
has changed—and are able to capitalize on those changes.
Besides, looking back, it could hardly get any worse. Even
before all the numbers are in, the stats IDC and Gartner have
reported for 2002 read like a funereal drumbeat of bad news.
Here’s just one sobering factoid: According to one report,
the worldwide IT industry shrank by 2.3% in 2002, a startling
reversal from the average annual growth rate of 12% during
the past two decades. In the U.S., according to a different
report, the fall in IT spending was more than 7% across all
industries.
Today, the CIO and CEO fret about ROI and TCO, and the technology
landscape has changed dramatically. First, and this is no
surprise, budgets are tighter—much, much tighter. Second,
IT chiefs need to identify a quantifiable business value in
adding to the technologies that were implemented so liberally
during the past few years. Third, no user company is interested
in keeping up with the Joneses—in one IT spending survey,
barely 20% reported caring about whether their competitor
deploys a particular application. So if you’re a business
development executive, you might want to rethink that "customer
list" slide in your presentation.
So in this post-bubble, post-Y2K, post-let’s try-everything
economy, there’s exactly one overarching theme: The new
killer app is…a solid business rationale. Product innovation
always has and always will be crucial, of course, but those
companies that survive and thrive this time next year will
combine cutting-edge technology development with innovative
and sound practices in manufacturing, marketing, channel distribution,
etc.
So, let’s get out the crystal ball, ask our question
and shake it for an answer: in this new era of conservative
capitalism, what are some of the hot technology trends for
2003? Analysts (and our ball) point to some interesting trends,
each covering a plethora of issues and technologies: enterprise
software, the mobile workforce and integrated security.
Taking (Software) License
IT chiefs have long known that additional seat licenses cost
the vendor virtually nothing, and contracts will increasingly
reflect that fact. Analysts believe that the trends for 2003
will be toward more subscription-oriented software licensing
agreements rather than outright sales, accompanied by a move
toward payments over time rather than up-front cash expenditures.
Both these trends will wreak havoc on many companies’
existing business models and will place greater emphasis on
more automated, intelligent enterprise management software
for tracking usage trends. As with hardware, the key differentiator
for enterprise software will increasingly come from service
and support. According to one Aberdeen study, the only software
providers who registered gains in this bleak market did so
not through licensing but from IT services.
Despite the woes, there are strong opportunities for vendors
focused on mid-market companies with fewer than 5,000 employees.
This is one segment that, analysts say, was largely ignored
during the boom and is ripe for growth. The prospects get
even rosier with niches, such as enterprise content management,
CRM and supply chain management technologies, or with vertical
markets such as manufacturing and healthcare. However, software
suppliers must also master new sales channels, become proficient
in faster implementations, and develop business models that,
for example, emphasize volume over margin.
Other analysts point out that IT managers are looking for
increased intelligence, integration and automated management
solutions across a broad spectrum of systems. This calls for
more adaptive solutions that respond automatically to a changing
IT environment without requiring provisioning every time something
is altered.
The Mobile Workforce
The next big trend is smaller—literally. Just as the
major story at Comdex this year was the near-glut of handheld
offerings and wireless services, look for a wave of products,
services, standards and (perhaps) office policies in this
area. These smaller, lighter devices point to a broader trend
toward supplying data and communications to an increasingly
mobile workforce.
In many ways, this is where the real innovation is right now.
Look for Palm’s market share to drop further as the Pocket
PC form factor becomes more technologically sophisticated
and gains broader acceptance, particularly within the enterprise.
It’s still an open question whether corporate IT will
want to get involved with acquisition, tech support and policies
for a low-budget item like a handheld device, at least in
the near term. But as these devices increasingly become part
of the notebook/PC/workstation/ server mix offered to corporate
clients by large vendors, look for a rapid evolution of standards
in this arena, particularly for Internet access, security
and corporate application development. That’ll help users
to go beyond the standard contacts/calendar/e-mail functions.
Wireless watchers think 2003 is shaping up to be the year
in which some nascent technologies finally take off. Keep
your eye on Wi-Fi. Names like T-Mobile (with its 2,000 Starbucks
connections) and Boingo Wireless currently get all the press,
but if there’s going to be a nationwide WiFi network
this year, it’ll come from the consortium known as Project
Rainbow, thanks to its partners: AT&T Wireless, IBM, Intel
and Verizon.
A recent study of CIOs by Morgan Stanley uncovered news that
32% had already deployed a wireless local network in at least
one part of their organization and 24% were considering deployment.
The CIOs ranked wireless initiatives No. 5, up from No. 17
just the previous quarter, among their top priorities.
Meta Group expects the wireless LAN market to grow at a compound
rate of 30% annually. But the researcher draws some distinctions
between markets. "Vendors seeking success in all markets
must strike an effective balance between the richness of features
required by enterprises and the low cost needed for consumer
and public deployments," says Chris Kozup, senior research
analyst at Meta’s Global Networking Strategies group.
"We expect a clear distinction among products that will
emerge in the next 12 to 18 months to meet the specific needs
of the enterprise, consumer and public market segments."
Meta points out the fact that wireless LAN products hoping
to target the enterprise market must include advanced features
that incorporate robust security, management and reliability.
Vendors must push advanced features, going beyond Wi-Fi, as
well as control some part of the wireless solution, such as
access points or client adapters.
Integrated Security
Increased spending in Homeland Security will affect not only
physical infrastructure, but logical infrastructure as well,
both in government and corporate organizations.
Morgan Stanley’s CIO survey demonstrates that "security
software" remains an unchanged No. 2 item for respondents,
just behind application integration. And it is the integration
of security that will continue be a trend in 2003.
IT managers are leaning on solution providers and vendors
to look beyond simple point solutions, such as anti-virus
and firewall technology, to integrated security that offers
protection and access to enterprise data and communication
resources.
This can require taking a look at existing security software
and looking for broader applicability. Such has been the case
with digital rights management software, which has traditionally
focused on entertainment, but is now used to safeguard a much
broader spectrum of intellectual properties and to protect
and enable business-information models.
Digital-rights management software, with its ability to create
and enforce rules concerning the use of digital content, can
interact throughout a company’s information architecture.
Gartner recommends that digital-rights management vendors
concentrate on business-to-business, rather than business-to-consumer
deployments while keeping an eye out for breakthrough business
models in the business-to-consumer arena in 2003.
|
