IT leaders must be able to respond to change more quickly than ever before, according to Gartner analysts at the Gartner Symposium/ITxpo in Sydney. There is a need for flexibility and a need for agility, and CIOs should create two IT budgets for 2008, the analysts said. The business plans that you had in June are probably not going to address completely the changed conditions of business in December.
On a worldwide basis, IT spending continues to grow at a rapid rate in developing countries. In fact, one-third of IT spending now occurs outside North America, Western Europe, and Japan. This development will create innovation in IT, new competitors, new usage patterns, and continued cost improvement for users.
As IT moves east and south, it will mostly affect the growing areas of the industry. End-user spending will globally move towards software, services, and all aspects of mobility. These categories made up 57 per cent of spending in 2006, will become 60 per cent in 2008, and will grow to 63 per cent in 2011.
The analysts explained that 2007 is on pace to be a milestone year for the IT industry: IT spending worldwide will reach $US3.12 trillion, an eight per cent increase over last year. Spending for 2008 is forecast to grow 5.5 per cent to a total of $US3.3 trillion and is expected to grow to $US3.79 trillion by 2011.
IT spending in the Asia/Pacific region has a forecast annual growth rate of nine per cent in the next three years. In Australia, IT spending is expected to top $A57 billion in 2008, up slightly on 2007 numbers.
Gartner analysts examined how IT leaders can drive growth for their businesses. Business is telling IT loudly that it wants IT to be a business leader. More CIOs are coming from business backgrounds with no previous experience in technology.
Five major discontinuities are combining to force IT organisations to change long-standing practices for procuring and managing IT, according to Gartner. These trends, which will grow through 2011, include: Web 2.0; software as a service (SaaS); global class computing; the consumerisation of IT; and open source software. These five have the potential to completely disrupt vendor business models, user deployment models, whole market segments, and key user and vendor brand assumptions.
Gartner analysts also outlined how IT leaders need to attract and retain customers by taking advantage of efficient, secure, always-available communications. In the emerging strategies for communications, user control is critical and communications in context, at the right time and place, makes a significant difference.
Len Rust is publisher of The Rust Report.