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IT Trends For The Future
Per Andersen
IDC
www.idc.com
IT Trends For The Future
November 29, 2005
Per Andersen
Managing Director
IDC Nordic
Agenda
The move to Dynamic IT
Project services trends
Outsourcing trends
Offshore trends
Mega-trend: Duality
IT Investments
Infrastructure
- reducing costs
- bandwidth
- security
- reliability
- predictability
Line of business
- improved processes
- improved business
- return on investment
- LOB decision
- predictability
IT Operations
Automation
Operational Efficiency
Business Process
Automation
Responsiveness to Market
Two Focus Areas for Dynamic IT
Business Analytics
Business Applications
Information and Data
Integration
Collaboration & Communication
Access & Interface
Service Level Management
Metering, Measurement
& Charge-back
Security
Infrastructure Virtualization
Infrastructure Provisioning
Platform Management/Monitoring
Business Execs Validate These Requirements
0% 5% 10% 15% 20% 25% 30% 35% 40%
20.1%
26.1%
31.6%
35.2%
36.2%
Implement Applications Faster
Lower Application Costs
Better
Communication/Collaboration
Better Information Access
Flexible Applications
Q: Most important IT improvements to better support business?
Source: IDC’s LOB Executive Survey, 2004
16.3%
23.3%
23.4%
Improve Infrastructure Performance
Lower Infrastructure Costs
Improve Security
Transformation Requiredin Business Process Automation
Business Analytics
Business Applications
Information and Data
Integration
Collaboration & Communication
Access & Interface
Embedded, Real-
time…Closed-
Loop
Standalone,
Time Lagged
Integrated/
Federated
Fragmented,
Unreachable
Integrated,
Multimode
Standalone,
Single Mode
Modular, Flexible,
Customer-
Defined
Monolithic,
Vendor-defined
Real-
time/DynamicStatic
Adaptive,
Modular
Hardwired,
Inflexible
from to
Critical
Dynamic IT Capabilities
Applications & Information Solutions
Enterprise Solutions Platforms to reshape application business
No longer about “the” killer app, but killer platforms
Who is going to win the game?
Emergence of embedded business intelligence
Pure play BI, BPA vendors will be in play
Emergence of Information Infrastructure Platform
Consolidation across data/information definition, access, management, distribution, assembly and presentation
Business Monitoring & Analytics
Business Process
& Application Automation
Information and Data Services
Integration, Event
& Deployment Services
Collaboration & Communication
Services
Access & Interface Services
Transformation Required in IT Operations
Service Level Management
Metering, Measurement
& Charge-back
Security
Infrastructure Virtualization
Infrastructure Provisioning
Platform Management/Monitoring
Automated,
triggered by
business
operational metrics
Unautomated,
post facto audit
Business process-,
services-oriented
Fragmented,
IT assets-oriented
Integrated,
pervasive
Fragmented,
infrastructure-
focused
Rapid, consistent,
automated
Slow, inconsistent,
labor-intensive
Integrated,
process-oriented
Fragmented,
IT-oriented
Apps, data access
virtual resource
pools
Apps, data
hardwired to
infrastructure
from to
Critical
Dynamic IT Capabilities
Infrastructure Software
System vendors and ISVs striving for complete infrastructure offerings
Consolidation and M&A
Systems vendors & ISVs face strategic choices
Quest for “business value” will drive more infrastructure players to partner with solution providers
Open source and Linux willgrowth and becomecommercialized
Service Level Management
& Automation
Metering, Measurement
& Charge-back
Security
Infrastructure Virtualization
Infrastructure Provisioning
Platform Management
& Monitoring
The CIO Agenda
Automating business processes
Integration – Adaptive – SOA
Reliable
infrastructure
Management
Providing access
to corporate
information
Nordic Software MarketsRelative Size & Growth (CAGR)
0%
2%
4%
6%
8%
10%
12%
14%
16%
0 100 200 300 400 500 600 700
Spending 2009, Euro Million
CA
GR
2005-2
009
Content management/
publishing
Security
Storage software
System & Network
Management
Service Oriented Architectures:The Time is Now
Sample: Large international companies, May 2005
Service Oriented ArchitectureUse of Technologies (Share of Companies)
0 20 40 60 80 100 120
.Net
WSDL
Dynamic access
Java
SOAP
Distributed system
Reusable
components
Object code
XML
(Procent)
Source: .Net Versus J2EE in the Nordic Region, 2004
Agenda
The move to Dynamic IT
Project services trends
Outsourcing trends
Offshore trends
IT Services Growth Rates
-5%
0%
5%
10%
15%
20%
2004 2005 2006 2007 2008 2009
Project Services
Outsourcing
Customer SupportServices
Source: IDC, 2005
Use of Consultants – Type of Use
All models for use of consultants exist(sometimes in same company)
– Resources (mostly)
– Competencies (second)
– Project management
– 10% to 100% of project resources from external
Customers emphasize
– Transfer of knowledge
– Sparring, innovation
– Business consulting
– Long term relationships
Future Use of Consultants
When increasing
Part of external sourcing strategy
No growth in own IT organization
Outsourcing entire projects
More business consulting
More project management
Need for special competencies
When declining
More internal resources through mergers
Consolidation leads to centralization
Project cycle comes to an end
Agenda
The move to Dynamic IT
Project services trends
Outsourcing trends
Offshore trends
Current Status of Outsourcing
Already using IT
outsourcing
(51.3%)
Planning on
starting using
outsourcing (8.5%)
Not planning
outsourcing at all
(40.2%)
Source: IDC Enterprise Survey 2005, n=642
Outsourcing by Outsourcing Area
0% 10% 20% 30% 40% 50% 60%
Web hosting
Application management
Telephony
Security
Networks
Desktop or LAN
Server or data center
Source: IDC Enterprise Survey 2005, n=642
Reasons for Outsourcing
0 50 100 150 200 250
Modernization of infrastructure
Obtain higher flexibility
Lack of skilled resources
Cost saving
Operational stability - higher uptime
To focus on core business
Source: IDC Enterprise Survey 2005, n=642
Agenda
The move to Dynamic IT
Project services trends
Outsourcing trends
Offshore trends
”You asked for globalization ...... You got it !”
Size of European Direct Off-shore 2004
1.2% of IT services, 2.5% of project services
Western Europe
imported
1.8b USD in 2004
India 85%
CEE 10%
Other 5%
Plans For Offshore IT Services
0 20 40 60 80 100
500+
250-499
100-249
10-99
It's not interesting
We might use it as the market become more mature
We already use offshore outsourcing services
We are planning to or currently evaluation the possibilities
Source: IDC Enterprise Survey 2005, n=642
Offshore Plans by Vertical Industry
0 20 40 60 80 100
Education
Government/Public
administration
Business Services
Finance, Insurance
etc.
Retail/Wholesale
Telecommunication
Transport and
Utilities
Manufacturing
It's not interesting
We might use it as the market become more mature
We already use offshore outsourcing services
We are planning to or currently evaluation thepossibilities
Reasons for Not Using Offshore
0 50 100 150 200 250
Other
Low quality of
result
Don't know
Lack of flexibility in
process
Don't believe in
cost saving
Distance and
timezones
Culture
Language
Our tasks too
small
Source: IDC Enterprise Survey 2005, n=642
Off Shore Services Types
Project
Services
77%
Outsourcing
15%
Support
8%
Project
Services
71%
Outsourcing
23%
Support
6%
2004 2009
Strategic Options
The end-user etablishes an off-shore armEx: General Electric
The end-user buys directly from off-shore companyEx: Danfoss buys from TCS
The end-user buys from global/local company with resources off-shore
The end-user buys from global/local company that uses off-shore resources as part of the solution (transparent)
What Does This Mean to Local Project Services (System Development)
Need for competencies:
Fronting sourcing projects
Offshore advise and implementation
Project management
Business consulting
Proactive and innovative consulting
Technical competencies in new technologies and architectures
Declining needs:
Basic programming skills
Basic project management
Thank you !
Omøgade 8
Postbox 2609
2100 Copenhagen Ø
Denmark
Phone: +45 39 16 22 22
Telefax: +45 39 18 44 48
http://emea.idc.com
Per Andersen
Direct: +45 39 16 22 30
Managing Director
IDC Nordic
