horizonwatch 2009 trends

IBM Market Insights

© 2005 IBM Corporation

Bill Chamberlin, [email protected] Corporate Market InsightsMarch 2009

HorizonWatch 2009 Trends

IBM Market Insights

© 2009 IBM Corporation2

About This Document

The report’s objective was to gather and report on 2009 top trends in order to help understand which trends were the most important emerging trends in technology and business. Overall, our intent is to improve our understanding of emerging trends.

We are making this external version available to help our clients and partners as they plan for 2009. We are hoping this document helps you understand the important trends for 2009.

Note: This document is not meant to be a statement of direction by IBM nor is IBM committing to any particular technology or solution.

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About IBM’s HorizonWatch Community

HorizonWatch is an internal IBM ‘Grass-Roots’ community that has been in place for over eight years. The community has over 1800 members from all types of functions, all divisions, all geographies within IBM.

Community members are all interested in learning about, and collaborating on, emerging business issues, trends and technologies.

We meet via conference calls. Topics are presented to the community by subject matter experts. In between conference calls, we collaborate via the HorizonWatch Blog (open to IBM

employees only)

For more information, please contact Bill Chamberlin at [email protected]

For a similar community experience, join the HorizonWatching group on LinkedIn at the following URL: http://www.linkedin.com/groups?gid=1817327.

And visit the HorizonWatching blog www.horizonwatching.typepad.com

About HorizonWatching

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Table of Contents

Note: This slide deck best viewed in screenshow mode. Hotlinks have been incorporated throughout the slide deck.

• Introduction

• Ten General Trends We’ll Be Watching

• Ten IT Trends We’ll Be Watching

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Installation DeploymentIrruption

The Industrial Revolution

Age of Steam and Railways

Age of Steel, Electricityand Heavy Engineering

Age of Oil, Automobilesand Mass Production

Age of Information and Telecommunications

Frenzy Synergy Maturity

Panic1797

Depression1893

Crash1929

Dot.com Collapse

2008 Credit Crisis

Period ofInstitutional Adjustment

1

2

3

4

5

Panic1847

1771

1829

1875

1908

1971

1873

1920

1974

1829

Source: Perez, C., “Technological Revolutions and Financial Capital”, 2002

Crash

• Formation of Mfg. industry• Repeal of Corn Laws opening

trade

• Standards on gauge, time• Catalog sales companies • Economies of scale

• Urban development• Support for interventionism

• Build-out of interstate highways

• IMF, World Bank, BIS

History tells us that there have been five important waves of economic and social transformation

Introduction

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Installation DeploymentIrruption

Age of Information and Telecommunications

Frenzy Synergy Maturity

Dot.com Collapse2008 Credit Crisis5 Period of

Institutional Adjustment

We are about to enter the deployment phase of the Age of Information and Telecommunications

Crash

Shifting sources and allocation of capital - restructured financial services, government stabilization actions, business savings drives transformation

Economics of a connected world

Shift in wealth and economic influence to the East

New constructs and capabilities for global integration

Global demographics

Finite capacity of the earth and resources

Characteristics of this Deployment Phase:

Introduction

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IBM is preparing our clients for the deployment phase with the smarter planet campaign

“Every human being, company, organization, city, nation, natural system and man-made system is becoming

interconnected, instrumented and intelligent. This is leading to new savings and efficiency—but perhaps

as important, new possibilities for progress.”

GREEN AND BEYONDLimited resourcesI need efficiency…

SMART WORKNew business and process demandsI need to work smart…

NEW INTELLIGENCEData exploding and in silosI need insight…

DYNAMIC INFRASTRUCTURECostly and inflexible infrastructureI need to respond faster…

www.ibm.com/innovation/

Introduction

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There are a number of external environmental trends impacting all global businesses.

Key Trends Implications

• Increased Regulation• Infrastructure Investments• Rebuilding Stability, Transparency & Trust

Political Trends

• Customer focus on costs, short-term ROI and risk aversion

Economic Trends

Socio-Cultural Trends

• Demand for anytime/anywhere functionality, delivered in real time

• Increase focus of customer centricity in corporate environment

• Recession / Instability• Bank Failures / Lack of Credit• Layoffs / Consumer Confidence

• Uncertainty• Governmental legislation

• Demographic Shifts• Society demanding personalized

services and mobility

• Mobility technology providing globalized information access

• Disruptive emerging technologies (virtualization, cloud,, SaaS, etc)

Technological Trends

• Enable sense and respond driven adaptability in an unpredictable world.

• Drive towards increased collaboration in decision making

Introduction

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With this background in mind, the HorizonWatch Community has chosen a list of 20 trends to watch in 2009

General Trends 2009

1. Recession

2. Growth Markets

3. Government Response

a) Infrastructure Development

b) Smart Cities

4. Business Response

5. Workforce Optimization

6. Enterprise Mobility

7. Corporate Social Networking / Communities

8. Energy, Environment, & Sustainability

9. IT Vendor Landscape

10. Vertical Industry Trends

IT Technology Trends 2009

1. Web Services

2. Virtualization

3. Cloud Computing

4. SaaS

5. Analytics as a Service

6. Mobile Applications / Services

7. Security

8. Embedded Intelligence

9. Unified Communications

10. Telepresence / Video Conferencing

Introduction

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General Trends We’ll Be Watching

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1. Recession. The global economic recession now in progress will likely continue through 2009 and into 2010

Expectations for 2009• Global GDP will be almost flat for 2009• Expect a significant impact on IT spending in 2009, with recovery delayed at least into 2010 and 2011. • Opportunity growth will primarily be found in services and solutions that help reduce costs / boost productivity / increase efficiency.

Characteristics:• Widespread instability of financial markets. Banks failing. Lack of Credit • Oil price fluctuations. • Large asset write offs. • Mass layoffs.• Low consumer confidence• Lack of transparency and trust

General Trends We’ll Be Watching…

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2. BRIC / Growth Markets. Growth in emerging countries will decelerate, but remain much higher than developed economies

• Growth markets have been hit hard by rapidly falling commodity prices and export volumes. There has also been a decrease in capital inflows as external growth evaporates.

• Overall, long-term optimism among business leaders remains strong and public sector spending will help maintain IT growth.

• Increased business and consumer use of the Internet is a major driving force for IT infrastructure spending in emerging markets.

• Continue focus on Brazil, Russia, India, and China (BRIC)


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3. Government Response: Governments will play a broadening role in 2009 by passing stimulus packages and new regulations.

• Governments need to take leadership to get the global economy back on track.

• Stimulus packages with significant focus on infrastructure projects designed to create new jobs and spur economic growth.

• We can also expect increased government control and regulations in 2009.

• Citizens are demanding an increased focus on transparency throughout this whole process.

Source: IBM Government Industry


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3a. Infrastructure Development. Governments will invest significantly in improving transportation, telecom, energy, and water infrastructure.

Applying more computing intelligence to

help transform fields like transportation,

energy and health care will be critical to

solving an array of pressing public

problems. The countries that take the

lead in this area will be the nations that

enact the best public-private

partnerships. - Robert Atkinson, President Information Technology and Innovation Foundation*

Note: Pictures above have embedded hotlinks. Click on a picture in screenshow mode to go to an ibm.com website to learn more.


* Source: NY Times, 2008

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3b. Smart Cities. Governments will increasingly invest in embedding intelligence into the infrastructure of new and existing urban cities.

The vision of “Smart Cities” is the urban center of the future, made safe, secure environmentally green, and efficient because all structures - whether for power, water, transportation, etc. are designed, constructed, and maintained making use of advanced, integrated materials, sensors, electronics, and networks which are interfaced with computerized systems comprised of databases, tracking, and decision-making algorithms. - U.S. Dept. of Energy, “The Vision of a Smart City”, 2000

Examples of New Smart Cities:• Masdar, Abu Dhabi, • New Songho City, South Korea, • Gujarat International Finance Tec-City, India• King Abdullah Economic City, Saudi Arabia

•King Abdullah Economic City, Saudi Arabia


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4. Business Response. Every CEO will focus on reducing costs. Forward looking CEOs will see this as an opportunity to invest and leapfrog competition.

Number of layoffs since Nov. 1, 2008, at America's 500 largest public companies:

488,712

• Undoubtedly there will be a huge focus on cost reduction and, unfortunately, layoffs.

• Now is a perfect time to dismantle legacy organizations, business models, infrastructures, and processes and use the time to rebuild.

• Leading edge companies will invest in order to prepare themselves to take advantage of the new economy, whenever it surfaces.

Source: Forbes Layoff Tracker


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5. Workforce Optimization. Workforce cost cutting and productivity boosting will be big trends in 2009.

• 2009 will be a busy year for HR.

• Restructuring and layoffs will result in many workforce issues that will impact employee productivity.

• Organizations will need to manage remaining people better than ever.

• Workforce knowledge, skills, and relationships are an organizations biggest asset.

• Expect clients to show interest in productivity and collaboration technologies


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6. Enterprise Mobility. To stay competitive in an interconnected world, organizations are extending their resources, data, and connectivity to people wherever they are.

• More people are working at home or via mobile access than ever before.

• Focus on customer service increases mobility.

• Generation Y enters the workforce, expecting mobility.

• Business processes need to be re-engineered to exploit mobility.

• Organizations need to leverage and exploit mobile and remote collaboration technologies.


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7. Corporate Social Networking / Communities. In 2009, companies will invest in social technologies that improve business interactions between companies and their networks of employees, customers, partners, and suppliers

Source: Gartner, Nov 2008

• Web 2.0 and social information technologies will continue to grow in 2009

• Collaboration and productivity are key drivers

• Need new tools designed to analyze information from these networks.


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8. Energy, Environment, & Sustainability. There is an increased awareness at the grassroots and governmental levels regarding climate change and how IT solutions can help.

• This trend touches all facets of the global economy – all countries, all industries.

• IT can significantly contribute to control and reduce the CO2 emissions.

• Expect an increase in investments in the infrastructure (e.g. smart grid) and in renewable energy sources.

• IBM plays a leadership role in applying technology and services to sustainability initiatives.

Note: Click on above picture to go to an ibm.com website to learn more.


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InfrastructureTechnology

Services

Industry Solutions

Network

Some IT vendors may die a slow death or merge with others

Some IT vendors will emerge from this stronger.

New competitors with new approaches to business models and IT services delivery are staking claim to the future of the IT


9. IT Industry Landscape. The current economic environment and resulting emphasis on business model transformation will favor innovative vendors.

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10. Vertical Industry Landscape. Growth opportunities will exist in areas being prioritized by governments, such as infrastructure, energy and environment, healthcare, and financial.

Transportation & Public Sector: Expect a heavy focus on funding a rebuilding of the transportation infrastructure.

Energy & Environment / Utilities: Concerns over energy, environment and climate change will also drive investments in “SmartGrid” and related embedded intelligence technologies.

Healthcare: Technology-related initiatives will create opportunities in healthcare and the telecommunications industry

Financial: Expect new regulations designed to improve the stability of the global financial system.


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Honorable Mention - Outsourcing. In a recession, organizations will seek increased cost efficiency. Clients will expect improved performance, better quality and more responsive delivery

HIGHER SERVICEEXPECTATIONS

HIGHER SERVICE EXPECTATIONS

Increasingly savvy customers demand quality service and

continuous availability across an expanding range of assets and

applications.

Expect there to be shifts in outsourcing relationships and buying behavior.

Expect a steady demand for cost-oriented, tactical outsourcing at the expense of large complex relationships.

Clients will expect improved performance, better quality and more responsive delivery.

Outsourcing expected to pick up at the end of the recession – early indicator of growth agenda.


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Information Technology Trends We’ll Be Watching

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1. Web Services. No longer just a place to find information, websites are offering collaborative, interactive, and personalized services.

New companies are expanding the utility of the web, creating location-based services and financial payment systems.

Access to services from anywhere, anytime, on any device.

Websites become highly social and immersive environments.

Websites become personal agents.

Technologies to watch: Mobile technologies Voice search / Voice recognition Touch / Gesture computing Video Virtual Worlds Semantic technologies

IT Trends We’ll Be Watching…

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2. Virtualization. Virtualization is rapidly transforming the IT landscape. In 2009, expect increased buzz about storage, desktop, and application virtualization

The bad economy will accelerate interest in virtualization technology.

With virtualization, you have a logical rather than a physical view of data, computing power, storage capacity and other resources.

For years, virtualization has improved the utilization rates of servers.

In 2009 expect there to be increased buzz about storage, desktop virtualization, and emerging application virtualization.

The University of Pittsburgh Medical Center is transforming its systems through consolidation, standardization and virtualization. This has resulted in a 150% increase in processing capacity.

Note: Click on above picture to go to an ibm.com website to learn more.


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3. Cloud Computing. The eventual end of the recession could be a significant lever in the adoption of cloud as companies use cloud to help them implement new business models

http://www.ibm.com/dynamicinfrastructure

2008 was a year of hype for cloud computing. Most of what has been publicized about cloud computing is about public cloud-based services.

The economic downturn is perfect time for companies to implement cloud technology.

New types of clouds will emerge in 2009

Challenges need to be overcome, including bandwidth, complexity, standards, interoperability, and security.

In 2009, IBM’s Dynamic Infrastructure and IBM’s SMB Smart Business are two important initiatives.


IBM Market Insights


4. SaaS. The Software as a Service is a disruptive delivery model that will continue to grow at a fast rate in 2009.

Drivers: Improved time to value for new applications Zero-CAPEX alternative to on premise solution Total cost of ownership (TCO) Unmet performance expectations with on-premises solutions Changes in sourcing strategy.

Inhibitors: Security Customization


IBM Smart Business is a breakthrough way for small and medium businesses to acquire, use and manage technology that is radically simple.

IBM Smart Business: http://www.ibm.com/smartmarket

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5. Analytics as a Service. Increasingly, the ability to pull value from data is a crucial competitive differentiator.

Business intelligence (BI) and information management (IM) initiatives leaders must do two things well if they are going to be successful. First, they must provide new capabilities to business management and knowledge workers. And second, they must build and evolve a better and more capable information-centric infrastructure. - Gartner, October 2008


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6. Mobile Applications / Services. There will be increased focus on the development of enterprise-based mobile applications, services and cloud infrastructures, both public and private.

Mobile devices are increasingly being used for web searches and applications traditionally done from a desktop.

The application development community will increasingly focus their efforts on developing mobile web application services.

Growth countries use mobile a s leapfrogging approach to connect the base of the socio-economic pyramid to the formal economy.

Expect large government investment in rural broadband Internet infrastructure

Emerging solutions will include voice search and exploit mobile video.

Within four years, more than 70% of the workforce will connect to corporate networks via mobile devices – IDC WW Mobile Middleware 2008–2012 , Jan 2009


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7. Security. In spite of the global economic recession, information security will continue to be a dominant IT priority in 2009.

• Businesses need to manage risk across the entire organization

• Emerging technologies will test security professionals

• Virtualization• Cloud Computing, • SaaS• Mobility • Social Computing

• In 2009, expect a strong role for managed security services

Source: Open Security Foundation

2008 Security Breaches by Type

Stolen Laptops

23%

Hacks20%

Web17%

Lost16%

Stolen-Other15%

Email9%


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8. Embedded Intelligence. There will be increased focus on embedded technologies and enterprise solutions that can deliver a sense and respond framework.

Consider a world in which there are a billion transistors per human, each one costing one ten-millionth of a cent. We'll have that by 2010. There will likely be 4 billion mobile phone subscribers by the end of this year… and 30 billion RFID tags produced globally within two years. Sensors are being embedded across entire ecosystems—supply-chains, healthcare networks, cities… even natural systems like rivers. - Sam Palmisano, Nov 2008


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9. Unified Communications. Enterprises will look to integrate the matrix of different installed communication types in order to provide a seamless communication system across multiple networks, applications and devices.

Integrating communications and collaboration in a rich, multimedia experience — one that can include unified telephony, voice, video, instant messaging, Web conferencing, e-mail, voice mail, and business processes and applications — enables a whole new way for people, teams and communities to find experts and make faster, better decisions.


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10. Telepresence / Video Conferencing. In 2009, there will be an increase in enterprise adoption of video collaboration solutions in the effort to reduce corporate travel and drive remote workforce productivity.

• In 2009, companies will be looking for an edge in cutting costs while optimizing a growing remote workforce.

• Leading edge Companies will establish telepresence connections with their top partners and clients.

• Low cost desktop video conferencing solutions needed


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Honorable Mention: Storage. Storage may very well be a bright spot in 2009 as IT looks to vendors to help them store more data in a smaller footprint, store more copies of data in different locations, and keep more copies of data for longer periods of time.

Key Trends in Storage• Virtualizaton• Data De-duplication• Tiered Storage• Green Storage• Universal Storage Systems• Standardizing on SAS• Growth in SSD• Home Storage

In this environment where CIOs will be focusing on cost reduction, storage solutions that help reduce storage costs or improve efficiency of existing storage assets will be in demand.


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