INT's self-inflicted ills face a consolidation 'cure'

In a harsh assessment of the tough economic climate that has profoundly impacted the state of IT today, Gartner placed the blame squarely on the shoulders of industry claiming much of the current malaise is self-inflicted.

"The condition of the industry is not due to lack of demand, it is self-inflicted," Jamie Popkin, group vice president, head of research, Asia Pacific and Japan, told delegates in an open panel debate predicting the future of IT.

He was joined by Gartner's Asia Pacific senior vice president Bob Hayward who was even more blunt in his assessment, claiming IT costs too much and there is a lack of ability to change infrastructure.

Put simply, Hayward said the industry has survived on hype and great expectations.

"Infrastructure is too fragile, complex and expensive and IT risks are not explained or appreciated," he said.

At the same time, Hayward said there are too many vendors selling the same thing, for example: there are 150 companies selling data mining. There are too many vendors unable to articulate or differentiate their value proposition which Asia-Pacific research director Dion Wiggins said has led to the current climate of 'burn and churn' and massive vendor consolidation between now and 2005.

Gartner's hot prediction: 50 per cent of current suppliers will be eliminated in the next few years.

"There are 2300 publicly traded software companies all waiting for the good old days, that is 60 per cent too many," Wiggins said.

As a result of consolidation and vendors buying functionality rather than building it, Wiggins said there will be little innovation between 2004 and 2007.

With vendors trying to be everything to everyone there will be a renewed battle for infrastructure control with Gartner's North America vice president Betsy Burton warning users there is a need to focus on architecture more than ever before.

Burton said the likes of SAP, Siebel and Oracle will package applications to support a broader software environment and try and take control. With applications dictating infrastructure, she said no more than 35 per cent should come from a single source.

Burton said all the big vendors are moving towards end-to-end processing that broadens their technology stack so users should keep their architecture open and flexible to avoid lock-in with a single supplier.

In other predictions, Gartner said that within three years it will be almost impossible to buy a non-wireless device. Analysts also predict there will be 80 per cent more mobile applications in the enterprise by the end of 2004. And the impact will be huge as most IT shops don't have a budget to address governance and security issues surrounding mobile applications.

The Asia-Pacific region will lead wireless innovation and usage and customers will use contracts more to protect themselves.

The IT professional's skills set

The life of an IT professional is never constant and this is particularly true when it comes to skill sets with Gartner's Asia-Pacific senior research VP Bob Hayward warning there will be massive disruption in the IT workforce in the next five years.

Hayward said there are armies of people employed to maintain technology and all of them need to start upgrading their skill sets now.

The dominant skills of 2007 will be based on business processes, coding will play a much reduced role.

Hayward said this will require a real change of attitude for the IT professional who wants to survive. Outsourcing will continue unabated and automation will replace people and drive the need for reskilling; he described it as a "profound period of transformation".

He said the most sought after IT professionals will be those with security patch installation skills and expertise in broadband, wireless, Linux, data mining and middleware.

Oracle leads the infrastructure pack

Gartner's North American vice president Betsy Burton singled out Oracle as having the most integrated infrastructure stack in the marketplace, with its 10g release the vendor is deepening its position in the business software space by moving into the file system area. However, she warned customers about adopting Oracle’s complete application stack saying this can reduce their negotiation capabilities. “For example, not all of Oracle’s applications like its multiple BI products are well integrated," she said adding that the vendor's biggest challenge is to resolve its pricing. "Worldwide, Oracle has a negative reputation because of its extremely aggressive sales tactics, she said. Referring to the vendors’ recent change to its pricing structure from named and concurrent user pricing to processor based pricing, she said "the way they set up the equation on that conversion, you end up having to pay Oracle more money even though you’re not getting more product from them.”

- Helen Han

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about GartnerOracleSAP Australia

Show Comments