Archive for IT Market
by Bill Ives
April 7, 2011 at 3:53 am · Filed under
IT Market
Forrester has released its current US Tech Market Outlook for 2011 and 2012. It projects 8% Growth in US IT Purchases in 2011 and 10% in 2012. Andrew Bartels provided this report with Ellen Daley and Sarah Musto. I was pleased to receive a review copy. These predictions were both slight increases from their thoughts in January where they had forecasted 7.4 percent for 2011 and 9.3 for 2012. Revising forecasts up is always in the right direction, especially with our economy.
The new report puts a number on these percentages, US business and government purchases of information and communications technology products and services will be $805 billion in 2011. Looking at the numbers by segment, software remains the largest part of the US IT market, at $219 billion. Telecommunications services come in at $197 billion. Communications equipment will be the third at $108 billion.
To explain this increased forecast, Andrew Bartels writes in his blog, “One reason is that…US economic growth still looks solid (as evidenced by the 216,000 increase in nonfarm payroll employment in March, 2011)… But more important is the strong momentum in business purchases of technology goods and services. 2010 growth in the US tech market turned out to be 8.9%, even better than the 8.4% growth we projected in April 2010.”
This is good news. I hope they are right. There is much more detail in the report, especially a very fine-tuned segment analysis.
by Bill Ives
March 15, 2011 at 3:36 am · Filed under
IT Market, Mobile
Forrester recently released a new report, Mobile App Internet Recasts The Software And Services Landscape: App Innovation On Phones Will Spread To Cars, Appliances And Entertainment by John C. McCarthy. It notes that while the explosion of app innovation started with the iPhone, the rise of the “App Internet” significantly impact the enterprise software and services market. Apple has over
iPhone 350,000 apps, and Android has countered with more than 150,000. They wrote that 33% of people with smart phones, download applications at least monthly. I am part of the majority on this issue but I do enjoy my smart phone. As part of the report, they interviewed 27 vendors in this space. I was pleased to receive a review copy of the report.
According to their survey of over 2,100 North American and European software decision-makers, 41 percent say that increasing the number of mobile apps for both employees and customers was a high or critical software priority. The development of this mobile “app Internet” with hybrid local and cold-supported applications will not only foster huge levels of innovation, but it will also open up new services opportunities around the creation and management of these B2C and B2B apps.
This second wave of innovation will leverage cloud-based services. Forrester believes that three service lines will grow significantly during the next 36 to 48 months. First, building initial apps – projected to be at $5.6 billion/year market globally by 2015. Second, managing apps and devices – projected to be at $3.8 billion/year market globally by 2015. Third, re-inventing the business processes and back-end systems – projected to be at $7.6 billion in revenues by 2015
As innovation continues and services vendors help IT pick up the slack, the app Internet will also accelerate the evolution of the enterprise desktop and business applications markets. Forrester sees four main shifts ahead. First, lower-cost apps will increase pricing pressure. Second, task-oriented experience will drive modular design. Third, the consumerization of IT will promote a freemium model. Fourth, a range of different revenue models will emerge. The app stores have really opened up the market.
Some of the innovations will come as sensors in the new mobile devices unlock the notion of context. For example, the sensors enable apps to limit the amount of cumbersome data entry by auto-calculating your location. In addition, the simpler, purpose-built, task-oriented apps are easy to use. To address the lack of screen real estate, the apps have to be highly relevant and very straightforward. This requires creative UIs.
The report concludes with the suggestion that the boundary between business and consumer that has been gradually eroding since the advent of the initial home PC in the late 1980s will fall completely. With the advent of the Freemium sales model and taking a percentage of the transaction, they predict that that the two worlds will become one.
by Bill Ives
February 28, 2011 at 4:57 am · Filed under
Enterprise 2.0, IT Market, Innovation
Software innovation goes way beyond the high tech industry as more products are increasingly computer driven. For example, I saw recently that the new Chevy Volt has four-fold increase in computer components over prior cars. Mike Gilpin at Forester looked into this issue and recently offered the report, How To Foster Software Innovation To Exploit The Economic Recovery. His contributors in the report included Mary Gerush, Roy C. Wildeman, Dave West, Tom Grant, and David D’Silva. They interviewed experts in a dozen organizations that excel at software innovation and recorded the important process, organizational, cultural, geographical, and staffing practices that promote software innovation. I was pleased to get a review copy.
Their research focus was as much on the leadership concerns of management as it was on the enabling technology. One of these concerns was an expectation that 2010 (and beyond) would bring a return to growth and a return to a focus on innovation as the top priority. At the same time they felt that they had, “in one way or another (outsourcing, attrition, soul-destroying management practices) frittered away their innovation competency, and that they needed to take urgent action to get it back.” I have read about this shift from cost cutting to innovation in other sources and it is certainly a welcome change.
Mike reported that Forrester is forecasting growth of 9.2% for the software industry in 2010 off a somewhat depressed 2009 base. Other industries will grow at varying rates, but Forrester expects information technology to play a significant role in the strategies of many enterprises aiming to return to profitability and growth. It is nice to see growth as a goal and not just profits. We certainly need growth.
They feel that what Forrester calls, Smart Computing, will play a significant role. This smart computing is defined as:
“A new generation of integrated hardware, software, and network technologies that provide IT systems with real-time awareness of the real world and advanced analytics to help people make more intelligent decisions about alternatives and actions that will optimize business processes and business balance sheet results.”
I put the whole quote here because I am a big believer in real-time awareness and the use of analytics. The transparency within enterprise social media offers a rich opportunity here and a number of people see this use of analytics to be the next major step in enterprise 2.0. Analytics are not limited to social media but social media offer a new form of analysis – what people say and think, and not simply how the transactions and processes are running.
The report offers some examples where software innovation can play a major role including connecting mobile customers to a business through direct connections with mobile apps such as the Nationwide Mobile for iPhone app, the State Farm Pocket Agent, or the Pizza Hut iPhone app. I have seen elsewhere that the majority of computer interactions will soon shift from desktop computers to smart phones so firms should move into this channel full force. Another area is increasing the intelligence brought to a point of sales experiences by knowing more about the customer to make additional recommendations for product use of related sales.
Software innovation comes in two flavors; incremental and disruptive. The report expands this to four flavors incremental depth or incremental breath and disruptive that brings out a new product to an existing category and the creation of a new category. Each has their value and each begins by listening to customers but it does not end there. The other path is predicting want customers might want in the future and then validating this with them.
The report goes into great detail on these and related issues. One of their concluding recommendations is to develop a social media strategy to compliment your software strategy. This can help with implementation. You can find the report at the Forrester site.
by Bill Ives
October 27, 2010 at 3:48 am · Filed under
IT Department, IT Market, Information Management
Forrester has released its report, US And Global IT Market Outlook: Q3 2010, by Andrew Bartels with Christopher Mines and Chétina Muteba. They have reduced their forecasts for the year to a still positive 8.1% IT market growth for the US (down from our 9.9% forecast in July), with 7.4% growth predicted for in 2011. Forrester used data from the US Department of Commerce and the reports of 53 vendors. US business and government purchases of Communications and IT products and services will total $758 billion dollars in 2010.
Breaking down the details shows a divers range across sectors within IT. For example, US computer equipment is set to raise by 19% in 2010, with all categories growing at double-digit rates. US software purchases should rise by 9.1%, with operating system software, middleware, and applications sharing the growth. Communications equipment raise by only by 5.5%, led by enterprise and small and medium-size business (SMB) buying.
On the other hand, IT services growth will lag a bit, with systems integration projects picking up late in 2010 as licensed software buying increases. The laggard of the group is US IT outsourcing and telecommunications services. Sales here will lag, with the former rising by only 2.8% and the latter dropping by 0.9% in 2010.
I was pleased to get a review copy of the forecast and there is a lot more detail with the report.
