IT Strategy: Relevant technology will be crucial in 2010

Recent harsh economic realities have meant that, for many companies, strategic and forward-looking IT investment has been sacrificed on the altar of a tactical policy of ‘keeping the lights on’. Spending on core technologies such as data security has remained relatively unscathed during the downturn and investment has actually grown in areas, such as business intelligence, which can demonstrate very rapid return on investment.

But many ‘nice-to-have’ strategic technologies, even those offering demonstrable business benefits and compelling ROI potential, have been put on ice too, due to budget constraints.

However, industry watchers are forecasting that the seeds for profound changes in the corporate technology landscape could be sown in 2010 and a growing body of opinion suggests that this year will be characterised by a thaw in hitherto frozen IT and telecoms investment. Market intelligence outfit IDC goes so far as to predict that the expected economic upswing this year will lead to “recovery and transformation”, even talking of “tipping points” being reached.

In terms of the recovery, it forecasts that worldwide IT spending will grow by 3.2% in 2010, returning the industry to 2008 pre-recession spending levels of about $1.5 trillion.

Strategic hardware, software and services spending are each forecast to grow between 2% and 4%, with hardware experiencing the most notable gains.

For a technology to be strategic, it must have the potential to impact the business of a potential purchasing organisation during a timescale of the next two or three years.

Gartner defines a strategic technology as one that has a high potential for disruption to IT or the business, will require a major investment, or will put companies at risk of losing competitive advantage if they are late to adopt it.

One of the most significant of these trends, which we have looked at in previous columns, is cloud computing. This model sees businesses ‘renting’ core business applications from third-party service providers over the internet. This will result in the greatest change in the way in which they use technology since the decline of mainframes.

Another big winner will be mobile computing. The rise of ever more powerful mobile devices will continue to turn business computing on its head as tablets, smartphones and ultra-portable netbooks take over from traditional desktop PCs. While the move to a brave new mobile computing world continues to cause security and support headaches, the benefits from mobilising staff are just too compelling to ignore. By the end of 2009, IDC expects more than one billion mobile devices will be accessing the internet, boosted by the growing popularity of smartphones and the arrival of devices including Apple’s iPod tablet computer.

It may not have the headline appeal of some other technologies, but don’t underestimate the importance, or the value, of advanced business analytics. Business intelligence solutions are reaching a level of maturity where they can now harvest key data from multiple sources and use it to produce complex simulation and analysis models that can, in turn, be used to optimise the efficiency of business processes.

And in the wake of the Copenhagen conference on climate change, we should not underestimate the important role that IT has to play when it comes to achieving reductions in power consumption and meeting government targets in this field.

The increased focus on reducing greenhouse gases will put added pressure on IT departments to optimise energy efficiency – especially in the data centre. This can be achieved using technologies such as virtualisation, which allows companies to run multiple computing tasks discretely in ‘virtual’ partitions on the same server. This has the effect of ramping up server utilisation dramatically, so maximising the value of hardware and reducing electricity bills.

We will also see a more pronounced blurring of the divisions between home and work computing. IDC notes that today’s social networking generation is increasingly calling for, and being provided with, a new generation of hybrid business applications that draw data and functionality from social and collaborative networks. These ‘socialytic’ apps are expected to not only bring new capabilities to customers and new growth to suppliers, but also new competition and threats to traditional leaders.

These are some of the tech candidates that will either impact or disrupt companies’ long-term strategic agendas and initiatives. It is not blue-sky thinking from boffins in white coats that is relevant for businesses, but real-world innovations that are imminent or already on stream.

There is a strong consensus that 2010 is shaping up as critical year for IT, not least because of predictions that it will see a return to pre-recession revenue levels: organisations need to focus carefully on the technologies that are relevant to, and potentially beneficial for, their business – or risk losing competitive advantage to rivals that do.

Robert Jaques is a leading commentator on technology issues