What IT Vendors Must Consider for a Successful 2013

Looking at 2013, most IT analysts see big growth opportunities in a handful of areas. Yet, few, if any of these analysts have identified a major challenge to realizing those growths. Read on to discover a little-considered but major sales issue facing the IT industry in the next 12 to 24 months.

The Big IT Growth Opportunities

Most IT analysts agree, the big winners in 2013-14 will be:

· Big Data

· Compute Infrastructure Refresh

· Cloud Computing

· Mobile Deployments

· Network Upgrades.

Big Data, Big Growth

Wikibon expects for big data to grow at 58 percent over the next five years to be a $50 plus billion market. That’s some big pickings in a general market that’s been growing at mid-single digit rates for the past five years.

What’s driving this is the amazing returns that companies can get from a properly deployed big-data-driven business intelligence. Aberdeen Group has found that the margins of companies with BI average four times those without this executive power tool.

Compute Infrastructure Refresh, It’s About Time

Regular compute infrastructure refresh hasn’t happened in many organizations because of economic turmoil. An estimated 80 percent of companies have held off replacing their core data center technology, electing to keep it limping along with extended service contracts, duct tape, and prayer. With average IT infrastructure age at six years, there isn’t much more life left in the 2005 vintage infrastructure that power most companies’ business.

The result is increasing unexplained outages, data centers crammed to their physical limits, and frustrated IT staff. Executives must take notice and will be compelled to do something about it resulting in big IT projects coming on-line in the near future.

Cloud Computing Sneaking in the Back Door

Cloud computing has picked up a lot of the IT growth demands over the past few years with promises of rapid scalability and utility pricing. With a monthly recurring charge that falls well below the approval threshold of many IT staffers and executives, it’s been easy to add capability without much oversight.

For many companies, un-supervised shadow IT has become the norm, not the exception. The result is security risks, uncontrolled IT costs, and loss of ability to determine real compute needs. While there will still be mid-teens growth in the cloud compute market, we expect for the pendulum to swing back to on-premise computing with a cloud deployment strategy, using off-premise vendors for disaster recovery, business continuity, and peak load management.

Mobile Deployments Mean Better Bandwidth

Mobile deployments continue to grow rapidly. With AT&T now offering fourth-generation LTE service, high-speed cellular-based IP network access becomes available from multiple vendors across most of North America, catching up with much of the rest of the world. This means that more mobile users have better bandwidth availability with fewer restrictions than at the office. And yet, fewer than half of world-wide cell phone users have smart phones.

Mobile device compute power now rivals that of older desktops and laptops with better human interface, instant boot, and innovative applications. Gartner predicts that tablet sales will eclipse PC sales in the next two to three years. Mobile devices extend the workday with users checking emails at all hours and mobile users tend to be better informed on current events. We no longer go to work, we just do work, any time, any where.

Gartner expects for 17 percent of servers to be used for hosted virtual desktops by 2015 because of the business continuity, efficiency, and security that it offers. The bulk of these virtual desktops will be on tablets.

Network Upgrades Try to Keep Up

Corporate networks struggle to keep up with all of the increased demand for big PDF documents, audio files, and video files. Add to this the idea of moving terabytes of data around for big data analysis, and network administrators start pulling out their hair over 1 megabit IP networks and even fibre channel networks.

While some companies limit bandwidth consumption to deter YouTube cyber-slacking, this also limits access to training videos, competitive videos, and other programming that can support the business. Most companies need to upgrade networks to support high-speed Wi-Fi access for mobile devices and the overall demand for more bandwidth.

With the drive to converge data and storage network, we are all in for interesting times.

Where the Decisions are Made

Here’s the rub: purchase decisions for most of these fast gainers won’t be made in the IT department where most sales organizations have key relationships. Either the purchase price is higher than the sign-off level of the CIO (typically between $10,000 to $50,000) or the IT department won’t drive the strategic initiative.

Further, CEO’s have a sign off level that has been curtailed in the recent economic environment. In the past, this could have been $500,000 or more. Now it can be less than $100,000.

This means more IT projects now go to the board of directors for analysis and approval. Yet most boards don’t have the technical acumen to make solid IT decisions without analysis from external consulting companies.

Traditional IT-focused sales relationships have declining value, placing conventional sales processes and unsophisticated sales forces at risk. The winners (such as IBM and EMC) have strong relationships with CxOs and board members. The losers won’t even get in the running.

IT Is No Longer Bought by the IT Department

IDC predicts that in the next five years, the marketing department will buy more IT than the IT department.

Big data is an executive-level driven initiative Click here about a system that brings new insights and rapid decision support to the executive team. You don’t sell big data to the data center. The entire sales process happens at the executive and board level through strong business cases. The decision will be handed to the IT team as fait accompli.

Compute infrastructure refresh may be requested by the IT department, but the deal is so big that it requires board approval. When the board is involved, they will have an opinion and will want detailed analysis to make sure that they make the best decision. IT frequently doesn’t have the ability to create a business case and the preferred vendor can be derailed by a board member’s relationship with another technology vendor.

Mobile deployments, while often ultimately administered by IT staff, are usually driven by an operational department such as sales, marketing, and customer service. Sometimes the decisions are based on policies overseen by the COO. Some companies have employees submit monthly mobile device billing as part of their expense reports. Add to this the bring your own device (BYOD) trend, and IT clearly has little impact on defining mobile device strategy. This means the organization loses buying power with vendors and ends up with a fragmented device security and usage policy causing substantial and unnecessary risk exposure.

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