IDC: Pain relief will provide tech opportunities

Confronting a continued downturn in the IT industry, a sluggish economy and the recent outbreak of war in Iraq, technology executives filed into the IDC Directions 2003 conference in Boston Thursday looking for just that: direction.

But despite the challenges the industry faces, the mood among attendees and speakers was surprisingly upbeat, as many looked to the opportunity of growth after decline.

"2002 was a bad year. In fact, it was the worst year in the IT industry," said John Gantz, chief research officer at IDC, during his opening keynote address. "But there are concealed opportunities."

Perhaps not surprisingly, many of the opportunities for IT vendors lie in easing companies' technology pains. A large problem for many companies, according to Gantz, is the "complexity crisis" of disparate software applications that have been installed over time, and which require even more software to make them work together.

IT vendors have an opportunity to benefit by offering companies a way to simplify their complex systems, Gantz said. He pointed out that solving the "complexity crisis" is a long-term endeavor, however, which he likened to Boston's Big Dig. And like this city's 20-year, multibillion dollar effort to move major highways underground, Gantz said it wouldn't be easy.

However, vendors that provide end-to-end products and services that help companies integrate their technology can help, according to IDC Senior Vice President of Hardware and Communications Crawford Del Prete.

One of the possible solutions to the complexity problem is Web services, Del Prete said. However, he cautioned that companies must concentrate on standards like SOAP (Simple Object Access Protocol) and XML (Extensible Markup Language) to make Web services work.

"Focus on standards or it's going to be a fool's errand," Del Prete said.

IDC predicts that the Web services, a market valued at US$416 million in 2002, will be worth US$2.9 billion by 2006.

Another growth opportunity for the industry is utility computing, or the ability to seamlessly access and scale computing capacity on-demand and across geography, applications and operating systems, according to Del Prete.

"Utility computing is the next big transition, but it will be a long time before we are there," he said.

However, he added that companies can cash in by moving forward with utility computing, like IBM Corp. and Sun Microsystems Inc. are doing with their on-demand computing and N1 strategies, respectively.

"Utility computing and Web services are like two sides of a zipper. They could really help each other out," Del Prete added.

Other growth markets are mobility and wireless, and a concentration on home technologies, with the PC as the center of the home network, Del Prete said.

"Opportunities abound," Del Prete said. "This is not the end of innovations."

Conference attendees weren't just looking to hear about leading edge technologies, however, as they also came to find out about hot international growth markets.

For IDC Senior Vice President Philippe de Marcillac, China, India, Russia, Brazil and Mexico are definite up-and-comers.

China has the advantage of a large domestic consumer population and also has proven itself to be a leading technology producer, de Marcillac said. He added that he expects China to vie for leadership with the U.S. in the industry, as Japan did in the 1970s and 1980s.

"The reality is that China is a technology powerhouse in the making," he said.

As for Brazil, it already has a sizable domestic market, de Marcillac said, and Russia and Mexico are expected to continue to build out their industries, supported by supply-side investment, economic growth and government commitment.

International markets seemed to be on the minds of many conference attendees, whose companies are trying to keep abreast of geopolitical changes.

John Merlino, product line manager of Traditional Services at Sun, said that he was interested in hearing de Marcillac's perspective to see if they dovetailed with Sun's own plans.

"His view very much fits with what we're doing," he said.