FWIW, Gartners Top 10 predictions for 2002. The first one is probably the most relevant...
gartner.com
Gartner Predicts 2002: Top 10 Predictions
Out of nearly 200 predictions from across Gartner, 10 predictions rose to the
top. We urge you to bring these predictions into your 2002 planning process.
Across industries, geographies and businesses, the use of IT as an engine for
efficiency, growth and opportunity will remain undiminished in 2002, although it will be
accompanied by healthy skepticism and smarter planning. Our analysis reveals 10
predictions in three crucial areas that will shape business investment in IT:
External Forces
* The IT industry will remain challenged, facing accelerated job losses and
significant vendor consolidation.
* Safeguarding people, knowledge, systems and nations will take priority.
Consumers will go online, finally, with the number using online account
* management doubling by 2005.
Business Behavior
* Short-term focus on expenses will squeeze IS organizations in 2002 as business
demand for IT increases.
* Outsourcing and trusted suppliers will take more control as capital spending
reduces in favor of operating budgets.
* Through 2004, businesses will continue to view the discipline of CRM as a critical
component of corporate strategy.
Applications and Technology Trends
* During 2002, despite budget restraints, operational IT infrastructure will still
need to anticipate and fulfill critical IT initiatives.
* More than 50 percent of mobile applications deployed at the start of 2002 will
be obsolete by the end of 2002.
* By 2004, Web services will dominate deployment of new application solutions for
Fortune 2000 companies.
* During 2002, leading-edge businesses will exploit application integration to
generate business innovation.
External Forces
Large-scale economic, social and political shifts will shape the way enterprises and
vendors view IT in 2002. Although economic caution has already devastated budgets,
not all external forces are negative. The challenge will be to have a balanced
response that streamlines, but that does not weaken, IT and business capabilities.
The IT Industry Will Remain Challenged: From Intel to AT&T, the entire IT industry
will be challenged in 2002 by major market discontinuities as buyer behavior becomes
permanently more prudent and sophisticated. 2001 was a difficult year: Spending on
IT was static. Many discretionary purchases were put on hold. Falling hardware
revenues hit the semiconductor industry badly. And software saw zero growth in new
licenses. The prospects for 2002 are not pretty: First, the IT industry faces
accelerated job losses and vendor consolidation that will last through 2002 and
beyond 2003. Second, as many as half of all IT suppliers that existed in early 2001 will
disappear from the competitive landscape by the end of 2003, as they are acquired or
go out of business. To put this chilling prediction in context, in the previous three
boom years of 1998 to 2000, 28 percent of the leading global software vendors were
merged or acquired. On the bright side, many Asia/Pacific countries will increase their
share of global IT spending as they shift toward IT services. The following are the key
success factors for IT industry players in 2002:
Watch for new competitors from nontraditional segments.
Prepare for business recovery now.
Innovate with repeatable solutions for new technology areas.
Don’t rely on past successes in the challenging new future.
Safeguarding People, Knowledge, Systems and Nations Will Take Priority:
Governments, military institutions, private-sector businesses and public-sector
organizations will use 2002 to assess and guard against risks in security, privacy and
safety. Leading the charge will be defense, intelligence and homeland security
agencies, which will spur intense R&D around information exploitation, innovations from
which will fuel a business activity boom by the middle of the decade (see "Side Effects
of Military Spending: Innovations Through 2010," SPA-14-9383). Inside businesses,
sponsors of security, privacy and business continuity programs will practically "write
their own ticket" for funding and resources, possibly siphoning off investment funds
from other areas. Be wary, however: Beneath the "busy-ness" surrounding security,
privacy and business continuity will be deep-seated concerns for personal safety and
well-being. Those concerns will drive many people to reduce business travel and to
increase their demand for remote-work options. Businesses must respond with a
robust infrastructure for communication, collaboration and information sharing.
Consumers Will Go Online, Finally: Between 2002 and 2005, the number of
consumers using online account management will more than double, reaching 45
percent of the U.S. adult population. Online account management is seen as a good
surrogate for online activity in general. Growth here mirrors growth of online consumer
activity across many fronts. Consumer e-billing, which finally took off in 2001, will
climb out of the "Trough of Disillusionment" on Gartner's Hype Cycle in 2002 and up
the "Slope of Enlightenment," with most adoption occurring in next-generation e-billing
applications (i.e., online account management). Holiday shopping in late 2001
demonstrated the strength in online purchasing and e-billing adoption that will carry
into 2002. Overwhelmingly, the credit card industry has been successful with its billing
strategies. In 2001, 26.7 million U.S. cardholders used Web-based applications offered
by card issuers. Issuers will build on that success in 2002, taking online account
management to a higher level than just monthly bill presentment. With online account
management, card balances can often be updated daily, charges can be disputed and
adjusted online, transactions can be sorted and organized, and consumers can access
more-responsive online customer service. All of these ingredients have created a
strong billing and account management model that customers have adopted. Gartner
estimates that, by 2005, 97.5 million U.S. users will adopt e-billing and online account
management.
Business Behavior
How enterprises tune their business strategies to respond to events will determine
their appetite for IT. Too much caution and short-term focus will hamper IS
organizations' ability to respond to recovery.
Short-Term Focus on Expenses Will Squeeze IS Organizations: Shell-shocked
from 2001, businesses will approach 2002 conservatively, focusing on short-term
return on investment (ROI), acquiring quick-payback products and services, and
cutting back substantially on new IT spending. As businesses prepare for economic
recovery — most likely in the second half of 2002 — they will again look toward IT as
a growth engine into the next business cycle. One caveat lies in wait: When recovery
begins, rising demand for IT will outstrip the IT budgets set during leaner times.
Unless business and IT executives strike a balance between growth-targeted IT
investment requirements and constrained IT budgets, many IT-powered business
initiatives will falter or fail when the economy turns positive.
Outsourcing and Trusted Suppliers Will Take Control: Significant shifts in spending
on IT services began surfacing after Sept. 11 and will continue to manifest
themselves in 2002. Enterprises will shift their spending away from capital budgets to
operating budgets, leading to an increase in the outsourcing of commodity and utility
services. Unlike the case with other areas of IT services, outsourcing expenditures will
increase in 2002 over 2001 as businesses choose outsourcing as a way to transfer
assets, forgo capital expenditures and reduce costs. During 2002, businesses and
their top executives will not tolerate failure. They will expect service providers to
deliver ROI within required time frames and with expected functions, and they will turn
to "trusted suppliers," particularly those with a strong heritage in their industry sector.
Those service providers will be well-capitalized, have significant global or niche market
brand awareness, and offer contract structures that ensure delivery of the intended
business outcomes.
Customer Relationship Management (CRM) Stumbles, but Will Remain
Important: Many businesses enter 2002 having lived through CRM implementations
that failed to meet expectations. In 2002, CRM will be the business application area
that demands considerable attention from CIOs, many of whom will have to balance
inflated expectations with more-realistic benefits. Through 2004, businesses will
continue to view the discipline of CRM as a critical component of corporate strategy,
but their disillusionment over early investments in CRM systems will cause them to
retreat from enterprisewide CRM investments. Instead, they will increase the likelihood
of future CRM success by concentrating in 2002 on change management, skill sets,
streamlined processes and team selling strategies.
Applications and Technology Trends
Innovation continues. Some technologies and applications have strong potential in
good times and in bad, and some efforts are too important to be derailed.
IT Infrastructure Will Be Pulled in Two Directions: During 2002, two opposing
forces will challenge the realm of IT operations, project activity and IT infrastructure:
1) the need to follow through on cost reduction initiatives that began in 2001, and 2)
the need to anticipate and fulfill critical IT initiatives. To minimize new investments in
IT infrastructure, many organizations will identify and redeploy underutilized server
and storage resources — actions that will drive targeted demand for capacity analysis
tools and asset management software. Continuing security concerns will drive
business continuity and disaster recovery projects, which will require data replication,
clustering and load-balancing technology to improve application resiliency. The
build-out of wireless LAN (WLAN) infrastructure will continue, and network services will
be in high demand, as will be secure, redundant and distributed networks. Meanwhile,
large-scale and long-term projects around enterprise systems management will go
unfunded, and the telecommunications equipment market will feel stress. Buyers' focus
on tactical spending rather than on innovative new technology will have a major
impact on vendors of servers, PCs, storage hardware, telecommunications and
systems management software. Enterprises will use low-cost, Intel-based server
technology wherever possible and use life cycle management as the primary driver for
PC acquisitions.
Mobile and Wireless Applications Will See Demand and Volatility: The complexity
of mobile and wireless applications, combined with a lack of standards, will continue to
make mobile and wireless an area of overdue innovation. Risk remains: More than 50
percent of mobile applications deployed at the start of 2002 will be obsolete by the
end of 2002. The lack of sufficiently useful and usable applications will be the biggest
barrier to "always-on" consumer acceptance in 2002. More than 25 percent of U.S.
and European organizations will experience tension between traditional workers and
always-on early adopters. In Europe, which expects relatively high mobile Internet
connectivity, aggressive carriers will position themselves to compete heavily with
banks for mobile payment control, particularly in the low-value payments. "Smart"
portable technologies will begin to proliferate in 2002 (see "Things Tactical and
Practical: The E-Workplace in 2002," SPA-14-9708), driving mobile and wireless
applications for virtual team collaboration, media content management, voice portals,
geospatial information management and personal knowledge management.
Web Services Will Gain Strength: Web services — Internet-accessible software
components — will capture substantial attention in 2002. Web services represent an
extension of what Gartner has called a services-oriented architecture (SOA): More
simply, by making software components available in a Web services model, enterprises
can make agile use of custom software functions (i.e., Web services), each designed
to perform and optimize a specific piece of the business process. For many reasons,
Web services are facing harsh criticism and user reassessment (see "Web Services:
2002 and Beyond," COM-15-0588). Periods of reassessment, however, are common for
new technologies, and Web services will successfully weather the review. By 2003,
more than 40 percent of all Internet-oriented interactions will leverage Web
components from multiple enterprises, and, by 2004, Web services will dominate
deployment of new application solutions for Fortune 2000 companies.
Application Integration Will Generate Business Innovation: Few enterprises can
escape the need to integrate internal applications if they want to develop new
business processes or exploit business-to-business trading-partner management. Yet
many have failed to invest seriously in developing an application-level network that
provides unifying connectivity among people, application systems and devices across
locations and business units. That highly integrated application-level network is the
prerequisite for quick-change systems for business agility, for composite applications
and for such sophisticated initiatives as real-time business activity monitoring (BAM).
During 2002, leading-edge businesses will form integration competency centers and
intensively pursue integration of applications both inside and outside the enterprise. In
so doing, they will build an "enterprise nervous system" that will serve as a backbone
for BAM, agile response and operational effectiveness. Application integration is an
enabler of innovation and underlies many of our predictions for 2002.
These 10 predictions are only part of the Gartner Predicts 2002 coverage. We
complement the top 10 predictions with focused "roll-ups" that elaborate on
predictions in seven related areas.
Features
"Predicts 2002: What’s Ahead for the IT Industry" (COM-15-1667) The IT industry is
experiencing a major market discontinuity, as recent events infect buying habits,
putting financial and physical safety high on everyone's agenda. By Roger Fulton
"Predicts 2002: What's Ahead for Business Investment in IT" (COM-15-1847) Gartner
discusses the most relevant forces and imperatives that will drive business investment
in IT during 2002. By Diane Tunick Morello
"Predicts 2002: What's Ahead for Business Applications" (COM-15-1830) Application
software is moving beyond domain-specific tools, toward becoming another level of IT
infrastructure. By Daniel Miklovic
"Predicts 2002: What's Ahead for IT Infrastructure" (COM-15-1850) IT infrastructure
projects will focus on cost reduction and tactical investments in technology, causing
another year of turmoil in the hardware, software and telecommunications markets.
By Mark Nicolett
"Predicts 2002: What's Ahead for Sourcing and IT Services" (COM-15-1848) Gartner
discusses how the sourcing and IT services market will evolve in terms of overall
market conditions, buyer behaviors and the service providers' response to those
drivers. By Lisa Stone
"Predicts 2002: What’s Ahead for Vertical Industries" (COM-15-1827) Although 2002
will be complex, difficult and risk-intensive, there will be considerable opportunity for
enterprises that align and integrate people, systems and business needs. By
Annemarie Earley
"Predicts 2002: What's Ahead for Software Infrastructure" (COM-15-1975) High-profile
technologies will begin to regain their footing, and a heavy dose of
application-integration-driven opportunities will thrive. By David McCoy
The list of authors whose predictions served as the basis for these roll-ups is indeed
too large to list, and we encourage you to read the related Gartner research, where
the individual predictions and their impact are discussed in much greater detail.
Gartner Predicts 2002 Spotlights
Gartner Predicts 2002: Application Integration & Middleware (see
www.gartner.com/1_researchanalysis/focus/aim2002.html)
Gartner Predicts 2002: Business Intelligence & Data Warehousing (see
www.gartner.com/1_researchanalysis/focus/bidw2002.html)
Gartner Predicts 2002: Business Management of IT (see
www.gartner.com/1_researchanalysis/focus/bmit2002.html)
Gartner Predicts 2002: Customer Relationship Management (see
www.gartner.com/1_researchanalysis/focus/crm2002.html)
Gartner Predicts 2002: E-Business (see
www.gartner.com/1_researchanalysis/focus/ebus2002.html)
Gartner Predicts 2002: Emerging Trends & Technologies (see
www.gartner.com/1_researchanalysis/focus/trends2002.html)
Gartner Predicts 2002: Enterprise Management (see
www.gartner.com/1_researchanalysis/focus/entmgmt2002.html)
Gartner Predicts 2002: ERP II, HR, Supply Chain & Manufacturing (see
www.gartner.com/1_researchanalysis/focus/erp2002.html)
Gartner Predicts 2002: Financial Services (see
www.gartner.com/1_researchanalysis/focus/finsvc2002.html)
Gartner Predicts 2002: Government (see
www.gartner.com/1_researchanalysis/focus/gov2002.html)
Gartner Predicts 2002: Hardware (see
www.gartner.com/1_researchanalysis/focus/hwm2002.html or
www.gartner.com/1_researchanalysis/focus/hwp2002.html)
Gartner Predicts 2002: Internet Platforms & Web Services (see
www.gartner.com/1_researchanalysis/focus/ipws2002.html)
Gartner Predicts 2002: IT Services (see
www.gartner.com/1_researchanalysis/focus/itsvc2002.html)
Gartner Predicts 2002: Knowledge & Content Mgmt., Collaboration & E-Learning (see
www.gartner.com/1_researchanalysis/focus/know2002.html)
Gartner Predicts 2002: Security & Privacy (see
www.gartner.com/1_researchanalysis/focus/security2002.html)
Gartner Predicts 2002: Software (see
www.gartner.com/1_researchanalysis/focus/software120701.html)
Gartner Predicts 2002: Sourcing (see
www.gartner.com/1_researchanalysis/focus/src112801.html)
Gartner Predicts 2002: Sourcing in Europe (see
www.gartner.com/1_researchanalysis/focus/src20020111.html)
Gartner Predicts 2002: Telecommunications (see
www.gartner.com/1_researchanalysis/focus/telecm2002.html)
Entire contents © 2002 Gartner, Inc. All rights reserved. Reproduction of this publication in any form
without prior written permission is forbidden. The information contained herein has been obtained from
sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or
adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the
information contained herein or for interpretations thereof. The opinions expressed herein are subject to
change without notice.
Resource ID: 351521 |
