[sbinews] IT predictions for 2004

  • From: sbistcbangalore@xxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Mon, 22 Dec 2003 20:42:23 +0500

No. This time there isn’t going to be that year-end announcement of the “next 
big thing” in information technology. Most predictions by IT experts in the 
industry spoke about making the most of existing infrastructure. 

“Do you think the next big thing in technology will happen in the next 12 
months?” was the question that Gartner asked a number of CIOs. And the answer, 
according to Jose Ruggero, vice president, Gartner: “We don’t see the next big 
thing happening. Why don’t you instead help us use what we already have?” 
Ruggero concludes that “the focus will be on refreshment and upgrades of 
existing infrastructure,” so that the infrastructure’s flexible and efficient. 
With the role of CIOs changing rapidly, Ruggero says that their priorities for 
2004 will be to take business costs down, enable risk-managed innovation, 
provide business guidance, demonstrate business value, enhance security and 
integrate applications. (Has information technology reached a saturation point 
as far as development goes?) 

According to Gartner, the top global business concerns will include security/ 
business disruption, operating costs/ budgets, data protection/ privacy and 
need for revenue growth. The business concerns for Indian companies would 
include use of information in products and services, the need for revenue 
growth, and thirdly data protection and privacy. 

The key management priorities: demonstrating business value of information 
services (IS)/information technology(IT); developing leadership in the IS 
senior team and strengthening the IS/business linkage. In India the key 
management priorities would be to develop leadership in the IS senior team; 
make IS more service-oriented; strengthen the IS/business linkage. 

 The technology priorities globally would be to develop efficient/flexible 
infrastructure; managing efficient/ flexible infrastructure; and security 
enhancement tools. In India the technology priorities, according to Gartner 
would be, to develop efficient/ flexible infrastructure; CRM; IT performance 
management, application integration, and managing an efficient/ flexible 

Sunish Sharma, engagement manager, McKinsey, also feels that there will be 
cost-cutting and that “enterprise budgets will be moving down”. However, IT 
talent, according to Sharma will be freely available, because of the series of 
lay-offs and companies will try to some of this talent inhouse. 

Sharma sees some aggressive offshoring happening despite all the furore in the 
US - “but mainly for non-strategic applications”. Other forecasts include the 
“clear industrialisation of software” and software development in OEMs such as 
IBM, HP. The other big trend will see big software players such as Oracle and 
SAP getting into niche areas, Sharma says. 

IDC also has come out with its “predictions for 2004”. It sees 2004 as a year 
of “tech resurrection” after a major setback in the last few years. IT spend, 
according to IDC is expected to be 6-8 per cent “or better”. And the reasons 
for the resurrection, IDC says, will be because of the significant 
strengthening in enterprise IT spending, consumer IT spending continuing to 
hold up, IT spending rebound remaining strong in the United States. IDC also 
sees “a shift among infrastructure hardware and software suppliers to 
standards-based product development and off-the-shelf sourcing strategies”. 

IDC analysts feels that utility computing is a good long-term bet. “The utility 
computing model will drive major changes in system architecture, system 
management, IT product/ service packaging, and pricing. However, in 2004, 
futility, rather than utility, will characterise the market.” 

IDC also predicts that aggressive offshore models are here to stay despite all 
the controversy that it will generate in 2004, which is election year. “In 
2004, the value of IT services provided to US businesses through offshore 
labour will double to $16 billion. In the subsequent three years, it will 
almost triple to $46 billion, capturing almost one-quarter of the US 

 In this regard, Shamini Dhana, director, Silicon Valley Bank, has an 
interesting viewpoint: “Offshoring’s here to stay. And, in fact, your funding 
agency might want to know how you expect to remain competitive if you are not 
offshoring to India — offshoring to India is no more about just cutting costs, 
it’s about staying competitive.” And all this is very good news indeed for 

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