IDC Canada: IT could be a lot worse off

The ICT industry should be living by a new mantra, according to IDC Canada chief Vito Mabrucco – never let a good economic downturn go to waste.

During the Toronto-based consultancy’s 2009 predictions Web conference, Mabrucco laid out his case as to why forward-thinking IT shops (and the vendors that service them) can weather today’s economic storm and come out looking better than ever in 2010.

“The pessimist sees difficulty in every opportunity,” he said. “On average, [economic downturns] last under two years. The idea that a business cycle will come back often gets lost in the media hype.”

Taking a more optimistic viewpoint of the IT landscape, Mabrucco pointed to the proliferation of technologies like cloud computing, virtualization, and business intelligence as key drivers for operational efficiency.

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For companies with smaller budgets and less time for lengthy implementations, software-as-a-service (SaaS) delivery and payment models are incredibly appealing and the choices among vendors are plentiful, he added.

“At the departmental level, the benefits of a fast implementation and lower upfront costs will be seen in the enterprise,” Mabrucco said. Vendors who push Web-based delivery models will also see greater success during these times.

Outsourcing as a whole, he added, will continue to accelerate, with companies seeing the benefits to farming out their core applications. Mabrucco said this will be especially true in the financial services sector, which should be using IT to help modernize both their back-end systems and the customer experience.

Last November, former JP Morgan Chase & Co. CIO Austin Adams expressed the same sentiments to IT leaders at CAWorld 2008 in Las Vegas. To take advantage of today’s economic climate, he said, technology should be used to bring business units together.

“There has never been a better time for CIOs and other technology leaders to show that technology can add business value,” Adams said. “Executive managers are much more willing to listen to IT folks nowadays. The question is are we going to do anything to add value or just focus cutting costs?”

Adams added that in his financial services industry, there isn’t a single company in the world that isn’t more dependent on technology today than it was a year ago.

And with so much more data floating around the enterprise, Mabrucco said 2009 might end up being business intelligence’s finest hour.

“Organizations will be looking to reduce costs and integrate disparate business information,” he added. That will become a fundamental technology for more businesses throughout the next 12 months.

Another technology that brings business units together is mobility.

One of the biggest tech industries in 2008 was the $38 billion Canadian telecom market, which will continue to be a force in 2009, according to IDC Canada. Mabrucco said companies that develop a strong wireless strategy will be in the best position to succeed as the mobile industry undergoes significant changes in the near future.

Mabrucco also questioned whether the Canadian market could support three national wireless players and speculated that a merger between two of the largest wireless providers could emerge.

On the vendor side of things, Mabrucco said that the hardware market will continue to be the hardest hit in the coming year, with most IT shops unwilling to make significant capital investments.

“We’ll see consolidation in the PC, server and storage industries,” he added. Software companies will start to join up to create scale, which could result in deals similar to last year’s EDS-HP merger, Mabrucco predicted.

The most successful tech companies in recent years, he said, have been able to create consumer applications that cross over into businesses. He pointed to Research In Motion Ltd., which was founded on the BlackBerry’s ability to deliver on-demand e-mail to consumers.

“Enterprises are made up of consumers who are trying to get things done,” he said. “Like SMS, e-mail and the PCs that came before that, applications that have the greatest personal impact on employees are consumer apps that cross-over.”

Mabrucco added that IT managers will have to recognize this in 2009 and embrace the potential of blogs, wikis, and other social networking and communication tools, to drive their businesses.

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Jim Love, Chief Content Officer, IT World Canada

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