- Category: December 2010
Springboard Research presented its analysis of key trends in the Asia Pacific IT market in 2010, along with a preview of the top trends the company believes will shape the regional market in 2011.The analysis is based on Springboard Research’s continuous tracking of the major trends and developments in the Asia Pacific IT markets, which includes substantial ongoing primary research conducted throughout the year with CIOs and other IT and business decision makers, briefings with leading IT vendors, and analysis of publicly available information on IT companies, countries, products, technologies and services in the region.
Their top 10 trends that will shape enterprise IT in the Asia Pacific region in 2011 are:
#1 Cloud Computing – From Silver Bullet to Just Another Sourcing Option
Throughout 2011, the hype surrounding cloud computing will give way to a more realistic understanding of its relevance and applicability among CIOs and other senior IT decision‐makers. According to Springboard, cloud computing is just one of many valid sourcing options IT organizations must consider alongside traditional approaches, including both on‐premise deployments as well as hosted solutions. Far from expecting cloud computing to replace all other approaches to application deployment/service delivery, IT decision makers must determine the optimal sourcing option for various services based on criteria including usage scenario, scalability requirements, IT skills availability, and types of workloads being enabled. The debate over public versus private versus hybrid approaches has led to further cloud related market confusion over the past 12 months. Ironically, however, in 2011 this debate will actually serve to help organizations better understand and therefore position cloud‐based approaches relative to existing IT initiatives. As IT (and many business) decision makers educate themselves on the distinction between internal versus external service deployments, and between dedicated and shared access, they will better understand how the various cloud approaches compare with other, existing approaches within their organizations.
In terms of overall spending, the public cloud market in Asia Pacific remains dominated by software as a service (SaaS) solutions. SaaS demand will remain strong, particularly in scenarios where connectivity is required (email, web conferencing) or limited existing on-premise investments prevail (CRM). However, infrastructure as a service (IaaS) offerings from both cloud providers (e.g., AWS, Rackspace) as well as more traditional telco providers (e.g., Singtel, Telstra) are expected to grow rapidly. For CIOs and IT decision makers, cloud related security concerns will center around interoperability and integration of systems, data and processes likely to be accessed across multiple internal and external deployment scenarios.
#2 Demand for Mobile Reporting Services Transforms “Business Intelligence”
Previously bundled as “Business Intelligence” (BI), reporting and analytics will begin to bifurcate in 2011, largely as a result of an increased demand from end‐users for mobile reporting services. With a strong initial focus on role‐based report delivery, lightweight navigation, simple drilldown and basic user‐driven interactivity, mobility will begin to move BI out of IT and into the hands (literally) of business decision makers. Organizations will discover that users require more contextually relevant reporting and analytics, including more social, collaborative and geo‐location driven reporting, providing vendors an opportunity to separate out BI functionality into various ‘layers’, including specific products optimized for particular mobile platforms. This will have a significant architectural impact for the majority of enterprise IT organizations that span application delivery, application lifecycle management, security, data integration, data warehousing, and telco services amongst others.
#3 Managed Services Providers Innovate to Drive Added Value
One of the most important milestones in 2011 will be the expansion of managed services beyond basic infrastructure management to include more application‐related services. As more organizations seek to reap the benefits of a better integrated approach to managed services, there will be a clear move towards application outsourcing that combines infrastructure and application management to yield better application performance at a lower cost. As this trend continues to gain strength, the lines between SaaS and managed services will increasingly blur.
Managed services providers (MSPs) will be forced to innovate with new business and delivery models based on reliable, standardized and scalable platforms and develop specific SLAs for the management of these extended environments, influenced by cloud computing. Springboard expects to see further consolidation and commoditization of IT managed services with services like monitoring, tracking, patching, and performance reporting increasingly delivered via the cloud throughout 2011.
#4 HTML 5 Boosts an Application‐Centric Web across a Wide Range of Devices
HTML 5, the next major revision of the HTML standard, is expected to be formally ratified by late 2011 and will gain greater attention throughout the year with its ability to support video playback, drag and drop user control, inline document editing, client‐side data storage and more interactive web form capabilities. HTML 5 will enable a further significant leap from being document centric to becoming more application centric and will enable a new wave of mobile applications to be delivered to a wide range of devices.
Application server technology has previously enabled static HTML documents to be rendered as rich, dynamic web based content. However, additional proprietary plug‐in technologies such as Adobe Flash/Air and Microsoft Silverlight were also required to augment basic HTML content to provide highly interactive and visually appealing, rich user interfaces. HTML 5 will enable richer user interfaces and greater interactivity across a much wider range of client devices – including mobiles. This will eventually lessen the gap between more proprietary mobile platforms (such as Apple’s iPhone and iPad) and more open platforms such as Google’s Android OS‐based devices.
#5 IT Distribution Channel Partners Accelerate the Evolution of their Business Models
Distribution channel partners are in a particularly vulnerable position as the IT market moves quickly toward cloud computing. The days of surviving on business models dependent on distributing generalized IT products with razor‐thin margins and living day‐to‐day on cash turns supported by vendor‐provided credit are quickly coming to a close. To make matters worse, the traditional large‐scale SI deals that supported channel partners for years are increasingly disappearing or are being won and delivered by vendors directly. In 2011, regional system integrators (SIs), value‐added resellers (VARs) and distributors will be forced to develop better specialty services by offering vertical industry and business solutions in order to deliver to the customer the level of value required to survive in a cloud‐enabled market. Already being pushed by their vendor suppliers to invest in skills around high growth solutions, channel partners will need to elevate their customer intimacy and ability to deliver clear business value.
#6) Telcos Embrace the Cloud but are Forced to Prove Their Customer Orientation
In 2011, Telecommunications companies (telcos) of all sizes, and in many Asian countries, will formally embrace cloud computing as an offering targeted at enterprise IT. However, Springboard Research believes that not all telcos will be as equally committed - or capable - of delivering the full range of cloud services demanded by customers. Infrastructure hosting will be targeted at larger enterprise clients with SaaS offerings targeted at small‐to‐medium sized business (SMB) customers during 2011. However, cloud “pure‐play” vendors will also continue to grow and be attractive, often by partnering with telcos to provide more complete and packaged solutions (e.g., offsite backup and more flexible capacity and performance options).
The goal for any cloud service provider during 2011, however, will be to prove assumptions about exploiting efficiencies, cost advantages and the ability to productize for a mass market on a cost effective basis. These are generally key differentiators for telcos offering cloud‐based services versus more traditional IT players, including enterprise application vendors, infrastructure vendors and more traditional hosted service providers. Nonetheless, telcos are significantly constrained by their own marketing vision, their ability to communicate that vision and the ability to execute on it as a matter of daily business operations. 2011 will be the time these assumptions are tested in reality.
Given the key characteristics of the cloud (network‐based access, usage‐based pricing, leveraging of shared resources, automated provisioning), telcos would appear to be extremely well‐positioned to benefit from the massive market opportunities that cloud computing will likely provide. However, significant challenges and barriers still exist that will be difficult to overcome, even for the larger telcos. 2011 will test telco’s own infrastructure and support services with responsiveness to customer requests/issues, the ability to adequately address ‘unique’ scenarios or requirements that fall outside their standard offerings and an overall ability to recognize and respond to the changing demands of small and medium sized businesses in a timely manner.
Springboard Research believes that 2011 will see telcos increasingly providing cloud based services - whether based on infrastructure or applications - but by 2012‐2013 only a limited range of services will ultimately be offered. This will bring some market instability with enterprise customers unclear and unconvinced on which services will be maintained over the long term. Organizations should therefore carefully assess their risk when short‐listing telco providers - whether small or large - for sourcing cloud‐based solutions and/or services.
#7 Real‐time CODE Emerges: Content Management Meets Collaboration
Real‐time collaborative document editing (CODE) will begin to gain broader attention in the enterprise market during 2011. The most widely known example of real‐time CODE today is Google Docs. This service allows multiple users to collaboratively edit a live document in real time, but it is unlikely to go “mainstream” in 2011. Just as instant messaging reduced email‐based collaboration “cycle” times over recent years, document centric processes that require multiple participants to edit and/or approve documents will also benefit significantly. Typical applications in the enterprise will include incident reporting, proposals, tenders, approvals, submissions, project planning and case management (amongst others). Driven by the substantial potential efficiencies and advantages of CODE, Springboard Research expects to see the enterprises formally evaluate the impact to their businesses. Immediate benefits include enhanced/multi‐dimensional version control, reduced document data volumes, improved document template management, superior content integration and, of course, reduced collaborative cycle times. Though it is unlikely that Google will emerge as a serious enterprise software vendor within the next 12‐18 months, Springboard Research does expect to see a much greater interest in (and gradual take up of) CODE solutions over the coming decade with 2011 serving as a transition point.
#8 Information Security Becomes a Key Enterprise Priority and Sparks Client Virtualization
Wikileaks has demonstrated the damage that can be caused when information assets are not properly protected. The risks to organizations when unprotected information is released can include reputation damage, competitive losses and even criminal charges, which are coming into greater focus with every new leaked document. In 2011, governments and large enterprises will invest far more in technologies, services and business processes to protect their most sensitive information assets.
Improved information security will bump up against - and be challenged by - a number of the strongest trends driving the IT industry in 2011 such as providing analytics for mobile workers, pervasive network access and new social media. Springboard believes that when organizations evaluate how best to improve information security, many will embark on strategies to fundamentally modernize their entire infrastructure management strategies and probably opt for client virtualization.
#9 Converged Infrastructure Stacks Challenge General‐Purpose IT
For the past 30 years, success and growth in the IT industry has been driven by general purpose hardware and software components integrated together by vendors, business partners and end‐users for particular needs. This model of computing has served the industry exceptionally well and has brought IT to millions of new businesses and consumers over the past several decades. Like preceding industry changes, this industry framework will remain and continue to drive a majority of the market for years to come. However, integrated stacks of hardware, software and services in devices and appliances will continue to gain prominence and will challenge the traditional industry model in 2011 - even in the face of the emergence of cloud computing. In almost every segment of the IT industry, specialized converged infrastructure solutions are mushrooming. The best example is perhaps Apple and its integration of hardware, software, service and content bundled into products like the iPhone. In 2011, vendors will heavily promote “vertically integrated” stacks as a means of differentiation in an attempt to address the requirement for simplification of the technology environment.
#10) Consumerization of IT Drives Major Changes in Usage Patterns and Expectations
Rapid growth in the usage of mobile devices, (e.g., smart phones, iPads, etc.) combined with an explosion in social computing (e.g., Facebook, Twitter, etc.) has already impacted the way end‐users view IT. Over the next 12 months, this ongoing consumerization of IT will have increasingly dramatic impacts on the ways in which end‐users access enterprise applications and data. While employees continue to access sensitive applications and data from secured, corporate networks, they are increasingly using web‐based offerings and mobility devices for both work and personal reasons. This represents growing complexity for IT teams that are already wrestling with the need to embrace new technologies - but struggling to maintain management and control over older ones. CIOs will face ever increasing pressure to allow more consumer/personal devices into corporate networks, manage the influx of social computing habits of their employees and handle the increasing mobile security issues they present. Springboard believes that IT teams will be forced to embrace the more consumer‐friendly computing habits and environments. With a variety of form‐factors existing in the marketplace, there is a critical need for applications to be offered in a platform‐and‐device‐agnostic manner (e.g., standard user images) which provides users with a seamless experience across various form factors. However, IT organizations must avoid the temptation to support mobile access by developing even more complex, multi‐layered applications. Instead, IT organizations should use this opportunity to embrace the basic Internet standards they have likely been trying to standardize on for the past decade (i.e. standard based HTML over HTPP on SSL). Throughout 2011, it is this ability to avoid over‐complicating the mobile application environment that will separate leaders from followers.
As the world continues, in 2011, to recover from the global financial crisis, the IT industry will undergo fundamental shifts in technology adoption and usage. A critical driver behind these changes will be cloud computing, which will move further along its transition from hype to specific implementations and organizations looking to take definitive steps along clearer and better understood multi‐year adoption roadmaps. Other driving forces pushing industry change will be mobility, analytics, IT democratization, IT abstraction and convergence. The degree of change and evolution shaping the market in 2011 will place a greater premium on agility and rethinking old assumptions and computing models. Winners and losers will be separated by an ability to quickly identify the shifts underway, to see (and accept) things in different ways and mobilize their organizations or teams to respond as quickly and effectively as possible.
Extract from Springboard Research’s report – see Research Central.
By Daniela La Marca