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Gartner presents 10 Year scenario for IT, business and society

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CIOL Bureau
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Speaking at the CEO and CIO Vision Forum at CeBIT last week, Steve Prentice,

distinguished analyst and chief of research at Gartner Inc. outlined Gartner's

10 Year Scenario for Information Technology, Business and Society. Prentice

described how eight major trends, in four pairings, are combining to produce an

unstoppable whirlwind of change throughout enterprise IT, the industry and

society as a whole

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"We are half way through a 60 year journey from an analog world to a

digital one, which started in 1980 with the PC," said Prentice. "The

first 30 years have been about driving technology into the enterprise. The next

30 years will see technology reaching every individual, in every part of society

and will in turn have a huge impact on the way businesses operate."

Gartner predicts a fundamental shift in the balance of power between big

business and the consumer and between supplier and customer, which will quickly

lead to significant challenges for all organisations regardless of size and

business sector. Business agility is becoming critical in a world where

companies are compelled to meet rising consumer expectations, but many

organisations are shackled by legacy systems. Similarly, ethical and

environmental issues can no longer be brushed to one side as consumers demand

that companies operate as good global citizens. Finally, established businesses

are increasingly finding themselves squeezed by entrepreneurial 'green

fielders' who, unrestrained by legacy systems and unblemished by previous

corporate misdemeanors, are challenging conventional business practices and

pioneering new business models.

Prentice underlined the growing interdependence of technology, business and

society and stressed that it is the collective impact of the eight trends that

will further amplify their individual effects. "While the technologies

continue to evolve, it is their effective deployment and cultural assimilation

that will drive growth and prosperity," he said

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Trends 1 and 2 - Commoditization and Consumerization



The increasing integration of technology into every day life, made possible by
the proliferation of the PC and the Internet, lies at the heart of this trend.

The three facets of Pipes - affordable broadband access and ubiquitous wireless

connectivity, Platforms - low cost, simple to operate PCs and fixed or portable

media devices with a wide range of universally available (and often free) tools

and applications, and Content - search results, location-based services,

downloadable multimedia, news and personalized micro-publishing, have already

combined to destabilize the balance of power between technology producers,

business users, consumers and the state.

"Previously expensive business tools such as PCs have become every day

commodities bought on the web, via mail order or even at the local

supermarket," said Mr. Prentice. "Like the grain of sand which creates

the pearl in the oyster, so the PC has become the nucleus for an IT revolution

in the home."

At the same time, new web-centric software business models are challenging

traditional license-oriented software business models in the consumer space.

This is increasingly influencing the wider enterprise market, not only for

software but also for hardware, telecommunications and support hardware.

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The impact of commoditization and consumerization of IT on enterprise

technology and business as a whole will be far greater than anyone could have

ever predicted due, in the main, to two factors:

  • The commoditisation of the PC is enabling new enterprise architectures
  • Technology-enabled consumer power is forcing businesses to become more

    agile and update their legacy systems

Trends 3 and 4 - Tera-Architectures and Virtualization



Demand for infrastructure capacity will increase a hundredfold over the next ten
years according to Gartner. For four decades 'scale-up', has been the

dominant architectural technology. This is set to change due, in large part, to

PC commoditization. The trend is increasingly towards tera-architectures which

combine with virtualisation technology to establish highly distributed systems

from many low cost components. Google, for example, uses a tera-architecture

approach comprising of more than 170,000 servers providing the company with a

resilient, flexible, agile and scalable system that Gartner believes to be

around 10 times less expensive than one built using a more traditional approach.

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Virtualization is breaking the direct link, which has existed for many years,

between the physical devices and their usage. Virtualisation allows greater

utilisation levels, delivering improved efficiency and greater flexibility.

Virtualization and tera-architectures support the model of the real-time

enterprise (RTE) - a business that uses a real-time IT infrastructure to sense

opportunities and problems faster and responds to them more quickly. In a

real-time infrastructure (RTI) standard components and architectures enable

faster changes and reduce support costs. People-intensive functions are

increasingly automated, extending across entire domains over time. This

automation leads to improved efficiency, quality, cost structure and agility,

ultimately transitioning purchase models to a utility or service model.

Prentice highlighted that the new architectures will help deal with

increasingly significant challenges such as heat generation and power

consumption to provide more environmentally friendly solutions.

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Trends 5 and 6 - New Development and Acquisition and Delivery Models



Gartner predicts that the move in software development towards services spells
the demise of the monolithic application, and with it the dominant positions

held by leading software vendors in the market. The most common revenue model

today is software as a product, with upfront payment for a perpetual license to

use the software. However, the trend is towards offering software as a paid

service with payments over time and based on a usage model. The issues that

software and IT services providers must wrestle with include lower gross

margins, the move to business-based rather than technology-based service level

agreements, new go-to-market models that rely less on their current direct sales

force, and difficulties in educating the financial community about the new

business models and their impact on profit and loss statements for the first

several years.

There are already early indications that hardware will follow in the same

pattern, with similar financial consequences for hardware vendors. As the price

for technology falls it becomes more valuable to offer support and management

services to help enterprises manage their growing array of storage, as well as

growing demands of regulatory and compliance authorities relating to data sets,

than it does to sell a physical device. With growing bandwidth available at

declining costs, many of the drivers for locally based devices also diminish.

This paves the way for an era of utility-style computing where many enterprises

will choose only to purchase access to a shared service on a remote device.

Trends 7 and 8 - Community and Collaboration



With commoditization and consumerization come not only revolutionary changes in
enterprise IT but also life-altering changes to the way we interact with the

wider world. Gartner predicts that by 2010, 70 percent of the population in

developed nations will spend 10 times longer per day interacting with people in

the electronic world than in the physical one.

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Whereas we once lived in geographically defined communities, this is becoming

less true every day. The home is becoming a "docking station" for an

extended electronically supported existence. New communities operating on the

free-sharing of information are emerging at the expense of conventional

advertising and broadcast media. Such network marketing, feeding information on

products and services back to prospective purchasers, has been the basis of the

move from transactions towards participation and interaction - enabled by a raft

of technologies including AJAX but generically referred to as "Web

2.0."

As people increasingly drive the creation of communities, companies face at

least two challenges in this vein: Are they equipped to translate those large

and fluid networks of trusted friends into professional contacts and value? How

effectively can they set guidelines for workers for interaction across cultures

and regions and for privacy and confidentiality in these virtual communities?

Environmentalism and ethical behaviour have been slowly growing issues in

business over the last decade. The increasing scope and power of activist

communities and their ability to effectively publicise their discoveries means

that consumer pressure and the threat of financial damage through disclosure

will become a more powerful influence than formalised regulation and

governmental intervention. Merely adhering to the letter of the law will no

longer be sufficient and consumer pressure will likely judge historical actions

by contemporary ethical standards. "Green" credentials, both for

enterprises and vendors, will become a critical success factor, accelerating the

move towards "Green-IT".

Forward not legacy thinking



While "Green" is an issue that companies need to get to grips with,
Gartner said that this is just one of the hurdles to maintaining competitiveness

in the new world order brought about by consumerisation. Legacy systems and

particularly legacy thinking are the single biggest challenge to transforming

business today. A majority of enterprises still operate ageing systems, which

consume a majority of their IT budget to maintain.

"The dot.com threat may have been a mirage, but transformational

business models enabled by Internet era IT are not," said Prentice.

"The challenge to established companies comes not from other established

players, but from start-up entrepreneurs who will use technology to upset the

status quo."

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