The predictions and forecasts for the IT industry are in full swing with everyone including the analysts to pundits and publications sharing insightful and interesting bits. I am not an analyst but I couldn’t stop myself from doing my own crystal ball gazing.
Rather than focusing on a laundry list of trends, I would like to highlight one key theme that is visible to most of us today. It started a few years back and continues to catch steam in 2013. I call it, for lack of a better phrase, “Love thy neighbour’s business” syndrome.
Whether 2013 will be a year better or worse (than 2012) for IT business is a key question racking everyone. While all organizations in the marketplace are exploring all possible options-some to win, some to survive, some rethinking their original models while some are exploring market areas consciously neglected earlier. We see many organizations try greener pastures, exploring areas which were earlier considered as different businesses.
While exploring these greener pastures is a desperate attempt to generate quick returns for many, for a few others it is a conscious, well thought through move to expand their footprint.
Here are 7 key trends, which I believe, will impact businesses in 2013:
1) We will see many IT firms step on each other’s turf, making the industry more competitive and cut-throat.
2) Product Companies will focus on services business targeting revenues from consulting and professional services with a bigger push on the XaaS model. Hardware companies like Dell, HP, Xerox have already set the agenda for getting into services in last few years. This move is triggered by flat IT budgets of companies forcing them to move from Cap-ex to Op-ex, with decreased focus on licenses and big budget purchases.
3) Independent Software Vendors (ISV) will target acquisition of consulting and professional services firms. This will be in addition to the focus on cloud strategy and ISVs acquiring firms with cloud offerings.
4) Services companies will focus on generating their own IP (which they have desisted from doing for long while focused on building business around IPs created by other companies) and generating services around these IP models. Services organizations are all focusing on strengthening their own IP sets in addition to their traditional play and integrate them with the services offered.
5) Hardware product companies will continue to make acquisitions of software companies to make their portfolio more integrated (CISCO- Newscale , Dell- Quest, Lenovo- stoneware). And the vise-versa will also be true. MS has launched surface. Oracle, after its acquisition of Sun, has launched appliances. Symantec has launched backup appliance. Google’s nexus brand of smartphone and tablets are already causing anxiety to the incumbent players.
6) Software companies who have already entered into hardware will get deeper into it and those who have not will worry about what they are losing by staying away. This will lead to some launching hardware products or acquiring a hardware firm.
7) Companies focused on consumer market will start focusing more on enterprise market (Amazon, Google, Apple).Though we haven’t seen any enterprise focused companies entering into consumer market yet, with cloud coming in, SMB space will be the next big thing for them. Already enterprise focused companies like SAP, Oracle, SAS are using cloud to crack the SMB market, hoping to make a big dent.
Such changes will threaten leaders in existing areas; disrupt alliances and partnerships, shaking up the overall eco-system further. Not all transitions might succeed, in fact, most might fail. What would be interesting though is to watch out for those few who might succeed.
It seems companies have more faith in ancient wisdom of Confucius who said, “Consistency is the virtue of fools (and wise people change their minds as they grow wiser)”. Would you agree?