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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

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