• December 10, 2007
  • By Jessica Tsai, Assistant Editor, CRM magazine

IDC Eyes Technology's Future

IDC recently released its predictions for the information technology market in 2008, an era the Massachusetts-based research firm refers to as the "Post-Disruption Marketplace." To date, the market has seen significant paradigm-shifting developments in technology -- "disruptions," in the eyes of IDC -- that have enhanced the way applications and the Web are incorporated into society. By 2008, those upheavals will be so frequent -- and so mission-critical in terms of competition -- that changes of that magnitude will soon be seen as mainstream events, according to the report. At the same time, however, overall spending on technology will likely slow down, the firm believes. Technology has taken significant strides in the past few years, IDC finds, thanks in large part to these disruptions altering the technology landscape: "online delivery, community-based development, solution-oriented packaging, and emerging markets." The research firm notes that in 2007 alone, significant developments further advanced users' ability to interact with the Internet: "everything-as-a-service, Web 2.0 applications, open development communities, 'free IT' funding models, and the emergence of non-traditional competitors [such as] Google, YouTube, and Facebook." Whether it's considered disruption or innovation, it seems the new competitive edge is going to depend on creativity. Vendors are being forced to rethink their offerings, said Frank Gens, senior vice president of research at IDC, in a statement. IDC anticipates 2008 to be the end of the experimental phase and the beginning of a nurturing phase that will be necessary for users to fully experience the depth of capabilities in the new technologies and business models. This stage may come at an opportune time, as IDC predicts that the rate of growth in worldwide technology spending will decrease from 6.9 percent in 2007 to somewhere between 5.5 percent and 6.0 percent in 2008. (In the U.S., meanwhile, the growth rate will decrease from 6.6 percent this year to between 3 and 4 percent next year, according to Reuters.) But even with a slowdown in spending, IDC doesn't expect reduced levels of development in other areas of the market. In particular, small and midsize businesses (SMBs) will continue to show strong interest, with the sector expected to increase spending by between 8 percent and 10 percent. Developing countries will also remain strong; IDC points to the BRIC nations (Brazil, Russia, India, and China) and nine other emerging markets -- including Egypt, Mexico, Poland, South Africa, South Korea, and Turkey -- to command a whopping 16 percent increase in spending next year. Moreover, instead of spending to develop technology, enterprises are likely to embark on mergers with and acquisitions of smaller companies, to expand their reach. The acquisition frenzy could well reshape in the CRM industry -- as acquisitions of major business intelligence vendors did in 2007 -- and might extend the tentacles of one of the technology world's biggest names into the arena. In fact, Reuters quoted Gens as saying that "Google could cement its position in the small- and midsize-business market with an acquisition of Salesforce.com or Intuit, two companies with strong Web-based business applications." Another major trend will be the continued investment in online delivery models -- the preferred and most accessible channel for SMBs, according to IDC. In accord with the desire for increasingly convenient solutions, prepackaged applications will become more prevalent. In addition, the industry will continue to reflect a desire for community, with new solutions offering ever-greater connection to the online world. Mobile networks will play a large role in that transformation, as they work to extend that "always on" mentality to any handheld device or application. IDC notes that the mobile network operators will do this "begrudgingly," suggesting that the pursuit of a competitive edge will come at the expense of the number of channels producing revenue. (Verizon Wireless recently announced its intention of opening its network to certain nonproprietary devices by the second half of 2008, but it still reserves the rights to decide which phones can operate on its network. That selectivity could undermine the basic intent: "In order for an open network to become a reality, all carriers will have to participate," Gigi Sohn, president of public interest advocacy organization Public Knowledge, told the Washington Post.) Domestic telecommunications companies will also further push for consumer voice over Internet Protocol (VoIP). Finally, IDC predicts that there will be a focus on the environment-friendly solutions of "Green IT," and efforts made to organize the massive amounts of data obtained from social networks, using high-tech software such as text analytics, sentiment extraction, and related technologies.

Related articles: Database and Storage Markets Keep Growing Two reports detail the growth of the database and worldwide software storage markets, driven by strong growth in the SMB segment and enterprises looking to host heterogeneous IT environments. BI Tools Market Shows Continued Growth A study by IDC reveals that BI software is both popular and necessary; Business Objects and SAS continue to lead the field. SaaS Will Increase Serving Size A new IDC study predicts a focus on partnering, a movement toward on-demand, and an overall increase in software as a service availability. Business Processes Manage to Keep Growing IDC predicts rapid growth for the BPM software market, which is expected to reach $5.5 billion by 2011. IDC Anticipates Brisk Services Growth The CRM services rate slows, while Asian consulting and outsourcing gains the lead the worldwide services market.
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