Technology, Innovation and Future Priorities
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1 Technology, Innovation and Future Priorities Matt Oostveen Research Director IDC Australia Copyright 2011 IDC. Reproduction is forbidden unless authorized. All rights reserved.
2 Agenda CIO & CFO Survey Budget Indicators Business Priorities Technology Priorities
3 IT: It s getting a little complex By % of New Software will be available via Cloud In m Smartphones, 42m media tablets sold. Non PCs outship PCs Mobility becoming the rule for online access, over ½ of 2.1bn internet users Social networking growing at average of 38% YoY for next 5 years 1m Apps combined on Apple & Google, 3bn apps downloaded Public & private cloud spend outgrowing rate of overall IT market by 4-5 times By billion internet connected devices, only 2bn of which are PCs Digital universe will expand by almost 50% to just shy of 2 trillion gigabytes 2011 IDC 3
4 The 4 pillars : Cloud, mobile, social, big data Cloud Social IT & business services delivered via cloud will form a US$15.8B market >3/4 of social media users access via mobile devices >50% of the companies in Asia/Pacific will have a social business strategy Source: IDC, 2012; all data for % of all employees in Asia/Pacific will be mobile workers 1/2 billion smart phones will be shipped 90% of organizations will be analysing some form of 'Big Data The global Big Data technologies & services market will reach $16.9B Mobile Big data 2011 IDC 4
5 Survey CIO CFO 5 markets Australia, India, Malaysia, New Zealand, Philippines & Singapore. 50% had employees ~ 50% had over 1,000 employees
6 CIO Survey - Sentiment Indicate your organisation s view of business prospects 100% 90% % 15.9% 7.3% 80% 70% 60% 50% 40% 30% 20% 81.2% 46.9% 82% 55.9% 29.4% 28.2% Very positive Positive Somewhat positive Neutral Negative 10% 0% % 18.0% 15.9% % IDC Australia FFM, May 2012, n=245
7 The CFO View CFOs are worried Decreasing overall expenses Access to adequate financing Collection of receivables days to receipt of cash stretching out Managing foreign exchange risks Managing employee compensation levels Managing corporate risk to regulatory requirements/compliance issues Managing rapid growth Entering new geographical markets 3 Main Concerns Rising costs of both raw materials as well as employee costs Market uncertainty and exposure to swings in foreign exchange rates Cash flow, including keeping cash in the enterprise as well as access to financing Falling Sales Launch of new products/services 0% 5% 10% 15% 20% 25% 30% 35% IDC Asia/Pacific CFO Poll, Nov 2011, n=250
8 CFOs are Taking Action Nearly of CFOs indicated they will be taking the following actions in the next six months Consolidating suppliers Increasing credit lines Leasing instead of buying equipment Outsourcing non-core business functions IDC IDC Asia/Pacific CFO Poll, Nov 2011, n=250 Aug-12 8
9 Some good news for IT If your organisation cuts overall expenses in response to economic uncertainty, which area do you expect will see the largest budget decrease? Research & Development/Engineering Adminstration & Operations Marketing Customer Service & Support Manufacturing or Product Creation Executive Management Finance/Accounting IT Sales 0% 5% 10% 15% 20% 25% 30% 35% IDC Asia/Pacific CFO Poll, Nov 2011, n=250 IDC Aug-12 9
10 In Fact. Almost 75% of CFOs view IT as a source of competitive differentiation. Top 3 Ways IT Creates Differentiation 1. Improving operational efficiencies 2. Support innovative products and services 3. Improve customer retention/relationships Top 3 Ways IT Fails to Differentiate 1. Implementations take too long 2. ROI is better elsewhere in the business 3. Technology is a commodity in our company. IDC IDC Asia/Pacific CFO Poll, Nov 2011, n=250 Aug-12
11 Spend: By Technology Area Increase Flat Decrease % 52% 48% 30% 8% 13% What happened to Budgets? 60% 50% 40% 30% 20% 10% 0% Hardware Software IT Services Public Cloud Computing Network Hardware Fixed data costs Mobile data costs Decrease since 2011 Remain the same Increase since 2011 IDC Australia FFM, May 2012, n=245
12 ROI On investing in any technology, what would be the timeframe by which you expect the investment to start giving a positive return on investment (ROI)? 100% 90% 80% 100% 90% 80% 9.8% Dependent on Investment > 5 years 70% 70% 4-5 years 60% 50% 40% 30% 20% 10% 0% 11.7% 3+ years 2 3 Years 1 2 Years < 1 Year < 6 months 60% 50% 40% 30% 20% 10% 0% 24.5% 11.4% 3-4 years 2-3 years 1-2 years 6 months - < 1 year < 6 months IDC IDC Australia CIO Poll, May 2012, n=245 Aug-12 12
13 Alignment of Business and Technology Ranking Business Goal 1 New customers/segments 2 Dealing with cost 3 New market expansion 4 High profit margins 5 Customer retention Ranking IT Goal 1 Lower costs 2 Infrastructure improvement 3 More secure environment 4 Better use BI/BA 5 Improve business processes IDC Australia CIO Survey, May IDC 2012, Australia n=245 CIO, May 2012, n=245
14 Technology Deployment Plans Public Cloud 20.0% NFC/Payments BYOD Private Cloud BPO Virtual Private Cloud 24.5% 20.0% 21.6% 22.0% 27.8% >50% inc pilots BI/BA Client Virt 24.1% 23.3% UC/VC 20.4% Green IT 27.3% Social Business Mobile Apps 20.8% 21.9% SVR Virt 22.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% Deployed Next 12 months Next months IDC Australia CIO Survey, May 2012, n=245
15 Industry Transformation Trillions of Things Billions of Users Social Big Data/ Business Analytics Mobile Mobile Cloud Broadband Devices Services & Apps 2011 LAN/ Client- Internet Server Millions of Apps Hundreds of Millions of Users PC 1986 Tens of Thousands of Apps Millions of Users Thousands of Apps IDC Aug-12
16 The 4 pillars Revisited Cloud, mobile, social, big data Cloud Social Moving beyond OPEX/CAPEX issues to business goals and outcomes Still fitness for purpose Cloud is the foundation for the other 3 pillars Social media show be a critical part of any organisations multi channel go to market strategy. Optimise it for mobility, target and profile. Source: IDC, 2012; all data for 2015 Mobility is a massive enabler of business however do not get too distracted by BYOD Platforms and Applications more important SMB friendly solutions will come from the cloud. Large enterprises will need to brace for potential self service analytics Mobile Big data 2010 IDC
17 Some Recommendations Measure Mobility and BYOD is coming fast. Implementation of a strategy is vital to maintain control. Collaborate How tighly linked are your application, infrastructure and facilities teams? Set a vision Goals, budgets and priorities change. Set guidance for what you want to acheive in a non project oriented manner. Make a decision Consumerisation, the carbon tax, data growth won t wait. But do you have the internal skills and resources?
18 THANK YOU Matt Oostveen Director IDC Australia L20, 8 Napier Street North Sydney, NSW Australia
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