HorizonWatching: Our Top Industry Vertical Trends To Watch In 2008

horizon pic - snow tracks

The last three days I’ve posted lists of trends developed by the HorizonWatch team. On Monday I posted our General Trends List.  On Tuesday I posted our Technology Trends List.

The final post in this series is below and it contains a list of important Industry Vertical Trends for 2008.  These represent trends that will have an impact on the IT industry and are significant enough to warrant increased attention during the 2008 calendar year.  We will be watching these from our role in HorizonWatch.  

Top Industry Vertical Trends

1.  Energy & Utilities:  As a result of recent deregulation legislation, the industry as a whole is changing structurally. Existing utility companies are being forced to merge, acquire other companies, and develop partnerships to remain competitive.  There is an emerging opportunity to build intelligence into infrastructures through advanced data collection, networked devices, control systems, and automated meters to address clients’ primary business issues, improve overall energy and CO2 efficiency, provide real-time monitoring, develop standards, enable adoption of green technologies and provide key insights to decision-makers.  Emerging intelligent grid technologies include sensors, smart metering, network automation and control, analytics, and communications technologies such as broadband over power lines (BPL) and WiFi/WiMAX.  Over and above this is the focus on developing non-fossil fuel sources.

1a) Intelligent Utility Networks:  The Intelligent Utility Network represents the transformation of the grid into an interactive energy-management system.  The proliferation of sensors and existing technology such as smart meters, analytics, Services Oriented Architecture, high speed communication network and digitally-enabled equipment have made this possible.  Building intelligence into the grid provides the information backbone to better understand our energy use and empowers utilities, regulators and consumers to better manage their energy environment and practices.

2.  Healthcare Integration:  Fueled by unsustainably high costs, unacceptably poor quality and an ever growing demand for services, the U.S. healthcare system is in the midst of a retail-like transformation where the convergence of high quality individualized information delivered to the point of decision can shape behaviors, reduce costs and influence outcomes.   The following lists some of the initiatives we are watching:

  • Business Intelligence/On Demand Analytics
  • Personalized / Customized Healthcare
  • Pay for Performance / Quality
  • Cross – Ecosystem Collaboration
  • Electronic Health Care Records
  • Streamlined Benefit/Payment Systems

3.  Pharma:  Pharmaceutical companies are facing important industry challenges and they must transform their businesses if they are to prosper into the next decade. Those that can leverage technology and adapt their discovery, development and sales processes to support a diverse product portfolio and emerging global markets will realize financial gains and continued growth.  Also, by improving product and price transparency, companies can improve their public reputation. Perhaps the biggest challenge for the pharmaceutical industry is its ability to transform the culture of its workforce.  Widespread change will require a significant disruption in business models, as well as the integration of knowledge, technologies and processes from many different sources.

3a) Life Sciences:  The Life Sciences market is at a crossroad as certain segments are starting to mature.  Innovation is vital for meeting consumer demands and seems poised to explode thanks to technological advances and increased competition.

4.  Future of Banking:  Global forces are disrupting the traditional banking industry and banks are facing new patterns of competition that didn’t exist five years ago.   Armed with a powerful web of information, customers are becoming less constrained by conventional views of who their financial provider should be.  National borders and industry boundaries are collapsing, and increasing collaboration amongst firms continues to both exert pressure on and create new opportunities for traditional banks.  Here are some of the trends we are watching.

  • Branchless Banking…  The consumer’s preference for online sales and services continues to grow.  The online channel has grown as the dominant source for transactions, service, and sales of banking products.
  • MicroPayments
  • Core Banking
  • Payment Security – Biometrics
  • Mobile Phone payments

4a) Microfinance:  Four billion people form the base of the economic pyramid (BOP) — those with annual incomes below $3,000 (in local purchasing power). Over 3 billion people live on less than two dollars a day and only 17% of them have financial services.   These people do not have a bank serving them.

5.  Telecommunications:  The traditional telecommunications industry includes companies that engage in fixed-line and wireless telecommunication networks for voice, data and video services.   This traditional telecom industry is undergoing a massive transformation, including infrastructure and business processes.   This is a result of an increasing convergence of telecom, media & entertainment, and information/technology industries all which have very different business models, cost structures, value propositions, and skill requirements Telecom service providers are pushing to speed time to market of value added services, lower operating costs to drive profitability, and increase retention and drive new revenue.  So 2008 will be a year that traditional telecom businesses increase their focus on a drive for new business models and architectures.

6.  Media & Entertainment:  M&E companies face daunting challenges as they prepare for the future of their industry.  The combination of new technologies and economic pressure on core operations raise the stakes for making the right business decisions, as well as avoiding the wrong ones.  As new devices and delivery formats offer more active, customized experiences to the end user, media firms have found that the traditional methods of creating value are insufficient to remain competitive.   As mentioned in trend 5 above, industry lines are blurring.  As an example, telcos and cable companies are getting into each other’s business and competing across triple play offerings (phone, internet, TV). 

  • Content providers looking to distribute content across three screens– mobile, computer, TV– and to avoid being locked in by service providers’ “walled gardens” where possible
  • New businesses are springing up all over the place to support any time, any place, any device viewership, e.g., Slingbox and Joost
  • User-generated content continues to explode (e.g. video)

It is important to note that the trend here is towards integration and convergence of technologies, applications,
and trends.   Consumers are driving adoption and innovative uses of these many of these technologies.  User-generated content is increasing. Blogs, amateur filmmakers and others are creating content that complements — or perhaps threatens — traditional media outlets.   Included are things like Social Networking sites (Myspace, Facebook, AOL/AIM, etc), Virtual Worlds for Social Networking (Second Life, Active Worlds, There, etc.), Virtual Worlds for Kids and Teens (Habbo Hotel, Webkinz, ClubPenguin, etc), Earth Mapping (e.g. Google Earth, Microsoft), Console Gaming (Xbox, PlayStation, etc),  Massive Multiplayer Online Role-Playing Games (World of Warcraft, Everquest, etc), and Web 2.0 features (tagging, pictures, video, blogging, commenting, etc.).

7.  R&D / Product Development:  The trend is to transform global R&D and PLM processes to align with and push the business strategy  (e.g. by identifying the right products / optimizing the product portfolio) and at the same time identifying operational/maturity improvements for managing the “business” of R&D and PLM, thereby increasing effectiveness and efficiency.   Today every company needs to look at the R&D / Product Development processes and determine if those processes need to be transformed.   New product development is at the heart of any innovative company focused on growth.   Innovative companies that leverage Web2.0 tools in their development processes will be the ones maximizing their growth.   

Some companies are using Web 2.0 tools to 1) leverage mass customer contributions, 2) provide open architectures for others to build on as they like, and 3) handing control over key product decisions directly to users.  Large companies require a global R&D strategy.  High speed communication technologies open the possibility for global R&D.  Although the project management on a global scale has its challenges and specific problems, R&D activity serves local markets best when the activity is also located in those local markets.  A global R&D strategy needs to consider: 

  • The need to tap into sources of knowledge and information where ever they might be located on the globe.
  • The need to transfer that knowledge to other R&D centers and other parts of the organization.
  • The need to coordinate activities between various R&D centers to ensure that knowledge is used appropriately.
  • The need to balance the allocation of priorities and resources globally based on strategic need rather than proximity.
  • The need to develop global products with customization to meet local markets.

8.  Intelligent Transportation Systems:  All levels of governments are slowly recognizing the toll urban congestion is taking on our economies and our environment.  Intelligent Transportation Systems improves transportation safety and mobility and enhances productivity through the use of advanced communications technologies.   Intelligent transportation systems encompass a broad range of wireless and wire line communications-based information and electronics technologies.  When integrated into the transportation system’s infrastructure, and in vehicles themselves, these technologies relieve congestion, improve safety and enhance productivity.   We are watching ITS trends in three specific areas:

  • Congestion Charging:  Using IT to reduce urban congestion, resulting   in 1) reduced travel times, and 2) decreased demand for fossil fuels
  • Automatic Fare Collection:  Using IT can automate the collection of fares and speed public transportation queue lines
  • Advanced Transport Information Management:   Using IT to build an integrated multi-modal transportation information system that can provide agencies and citizens with an integrated, real time transportation information system

9.  Defense – Network Centric Operations:  These are operational Systems in defense, security and intelligence organizations require comprehensive information management systems to facilitate better decision making.  These systems can provide a huge competitive advantage to accomplish mission objectives – whether military, peace keeping, or homeland defense in nature. 

10.  Trusted Identity:  Identity has a social and business issue that goes well beyond technology, requiring innovative ideas.  Focus on identification and strong authentication, on full life cycle of identification, focus on cross industry.   There are four targeted key industries:  Finance (online banking), Healthcare (Patients and Providers), Government, and Travel.

11.  Small Medium Enterprises:  The fact that SMB is growing is no new trend, but it does remain a very significant trend.  In fact, SMB is the largest fastest growing sector for IT spending – driven by increased sophistication with new delivery models.  Business Solutions represents one of the largest opportunities – $83B and Midmarket services spending growth is increasing twice faster than that of large enterprise – driven by BRIC countries.  

As always, we are interested in your ideas and comments related to this list of trends.  Please feel free to enter your feedback below.

HorizonWatch: Top IT Technology Trends To Watch In 2008

Horizon pic earthviewYesterday, I posted a list of important General Trends impacting the IT industry in 2008.  Today’s post contains a list of important IT Technology Trends for 2008 as developed by the HorizonWatch team I am on.  These represent IT industry related technology trends that we feel are significant to warrant increased attention during the 2008 calendar year.  We will be watching these from our role in HorizonWatch and thought you would be interested in seeing them. 

Top Technology Trends Impacting The IT Industry

1.  Green Data Center:  This trend is all about helping companies reduce thei overall power consumption of IT systems.  In addition, the increased use of IT for business processes, the consolidation of workloads and increasing availability of bandwidth have driven the size of data centers and driven the power density in these data centers exponentially.  There is an emerging market need to design, construct and manage new data centers with higher energy efficiencies as well as improve the energy efficiency of existing data centers.  From the CIO’s perspective, they might not see it as a ‘Green Initiative’…they just know they need to optimize space, power, cooling and resiliency while improving operational management and reducing costs.

2.  Virtualization 2.0:  Virtualization technologies can improve IT resource utilization and increase the flexibility needed to adapt to changing requirements and workloads.  The next phase in virtualization technologies will be efforts that enable broader improvements in infrastructure cost reduction, flexibility and resiliency.  Virtualization is a technique for hiding the physical characteristics of computing resources from the way in which other systems, applications, or end-users interact with those resources. This includes making a single physical resource (such as a server, an operating system, an application, or storage device) appear to function as multiple logical resources; or it can include making multiple physical resources (such as storage devices or servers) appear as a single logical resource.

3.  Cloud Computing:  Cloud computing is an emerging approach to shared infrastructure in which large pools of systems are linked together to provide IT services.  The need for such environments is fueled by dramatic growth in connected devices, real-time data streams, and the adoption of service oriented architectures and Web 2.0 applications, such as mashups, open collaboration, social networking and mobile commerce.  Continuing advances in the performance of digital components has resulted in a massive increase in the scale of IT environments, driving the need to manage them as a unified cloud.  Cloud computing refers in general to software applications that are delivered over the Internet.  With cloud computing, organizations, such as companies or government agencies, can have access to massive amounts of computing power without having to expand their own data centers. In essence, computing is offered in the same way a utility offers water or electricity – on demand.  Examples of cloud computing range from Google’s Web services for consumers to Amazon’s Elastic Compute Cloud for businesses. 

4.  Software as a Service: Software as a service (SaaS) is a software application delivery model where a software vendor develops a web-native software application and hosts and operates (either independently or through a third-party) the application for use by its customers over the Internet. Customers do not pay for owning the software itself but rather for using it. They use the software through an API accessible over the Web and often written using Web Services or REST. The term SaaS has become the industry preferred term, generally replacing the earlier terms Application Service Provider (ASP) and On-Demand.

5.  Enterprise Web2.0 Mashups:  An enterprise mashup typically adds collaborative functionality, making the end result suitable for use as a business application.  Web “mashups” will drive many activities here. that combine data from more than one source into one integrated tool will be the dominant model for the creation of composite enterprise applications and will peak around 2012.  Mashup technologies will evolve significantly over the next five years, and application leaders must take this evolution into account when evaluating the impact of mashups and in formulating an enterprise mashup strategy.

6.  Information Management:  Information management is the collection and management of information from one or more sources and the distribution of that information to one or more audiences.  Information Management is a critical part of a company’s information infrastructure.  It enables optimization, abstraction and semantic reconciliation of metadata to support reuse, consistency, integrity and shareability.  One of the implications of this trend is that advanced analytics, rules/optimization engines, BPM, and information infrastructure will increasingly converge.

7.  Semantic Web:  The semantic movement is all about making it easy for software agents to find, share and integrate information more easily.  This is a complex job as there there has been a huge increase in non-structured data (blogs, wikis, videos, podcasts, and other web 2.0 tools).  As the semantic web takes hold, search engines will become more effective than they are now, and users can find the precise information they are hunting.  This could have a huge impact as mobile search begins to take off.

8.  SOA:  There’s been a lot of hype and buzz around SOA and it is all justified.  Companies are moving toward SOA to increase flexibility & agility by organizing business tasks as a set of reusable services or elements.  Increasingly business design requirements demand applications and technology silos be integrated with each other and SOA is a tool that helps IT achieve this required result.  Using SOA, IT applications that support business processes are restructured into reusable building blocks or ‘services’, which can be combined, configured, and reused to rapidly meet changing business needs in innovative, cost-effective ways.  

9.  The Security Imperative:  Security has shifted from technology discussion to a business imperative and has become a boardroom topic as the costs of ignoring it have become too apparent.   Being responsible for protecting people, property, and/or information is a formidable challenge that seems to change with the blink of an eye.  There are many threats that businesses and governments have to consider, including identity fraud, cyber attacks, suicide bombers. natural disasters. and pandemic threats.  Staying on top of the latest Security issues, strategies, and technologies is essential in preventing or mitigating emerging threats and in enhancing security for any organization.  Some of the emerging trends in 2008 will be a shift towards appliances, the emergence of multi-function security appliances, embedded security
, and advanced biometric solutions. 

10.  Emerging Country Provisioning Platform:  Provisioning configures required systems, provides users with access to data and technology resources, and refers to all enterprise-level information resource management involved (server, services, user, mobile subscriber, & mobile content).  There are a number of emerging economies that are making the leap to the Internet Age.  The Internet, along with mobile devices, can serve as a platform for citizens to access basic services, such as banking, healthcare and insurance.   There is a window of opportunity to establish a provisioning platform within these emerging economies. 

11.  Embedded Data Intelligence:  In the past 5 years businesses have been buying and installing all sorts of Networked Devices, including sensors, actuators, and controllers.  These devices are designed to deliver new data & act upon insights.   Clients are increasingly interested in to using these networked devices to help them establish a sense and respond framework that integrates both operational and business information to achieve the benefits of the real-time enterprise.   Embedded Data Intelligence solutions are designed to analyze the data collected from sensor networks that are monitoring physical objects and environments. By extracting useful events and insights from this data, organizations can now respond to new opportunities and threats and use this information to unleash new found business value and create innovative business models.

12.  Unified Communications:  The whole objective here is to move towards an integrated, single environment that offers the user a more complete and simpler experience. Gone are the days when voice and paper drove business communications.  Today, there are many tools that drive business communications and decisions.  So expect in 2008 that the march toward digital convergence and unified communications will pick up steam.  In the business enterprise, IP telephony has reached about 25 percent of the global market, with most organizations testing the waters for wider deployment.  The movement of Microsoft and others into this space will enhance its uptake.

13.  Speech Technology:  In 2008 advanced speech recognition and translation technology will continue to find its way into more applications, both enterprise and consumer.  Two areas to watch are

  • Real Time Language Translation…Moving to an on demand environment for the translation of the spoken and written word, including Speech to Speech, Speech to Text, and Text to Speech, and
  • Contact Center…Reducing labor costs by integrating speech technology into the Contact Center of the Future.

14.  Surface Computing:  A surface computer is a computer that interacts with the user through the surface of an ordinary object, rather than through a monitor and keyboard.  The category was created by Microsoft with Surface (codenamed Milan), the surface computer from Microsoft which was based entirely on a Multi-Touch interface and using a coffee-table like design, and was unveiled on 30 May 2007.  Users can interact with the machine by touching or dragging their fingertips and objects such as paintbrushes across the screen, or by setting real-world items tagged with special bar-code labels on top of it.  Watch for continued buzz around surface computing in 2008. 

As always…if you have any feedback or comments on this post, please let us know below…or via email if you wish.  Thanks!

Top General Trends To Watch In 2008

07xxxx BSPark Pictures 006This posting contains a list of important General Trends for 2008.  The list below represent general IT industry related trends that are significant to warrant increased attention during the 2008 calendar year.

Look for other two other posts on trends…one will provide a list of technology trends and the other will provide industry vertical trends.  

Top General Trends Impacting The IT Industry

1) Economic Uncertainty:  The impact of the ‘mortgage mess’ will be larger than we all hope for.  The worldwide economy will be volatile during the next few years. The U.S. consumer economy will slow, maybe into recession, with a resulting impact on the world’s economy. Specifically, this will weaken the business models based on consumer and Internet advertising. Advertisers, entrepreneurs and investors will switch their attention to B2B business

1a) Energy Prices:  Oil prices surged to $100 per bbl on 1/3/08.  Further price increases could have significant implications for the global economy

2) Greening/Climate Change:  Helping companies comply with Governmental Climate Change initiatives.  Increased focus on climate change, the use of  natural resources, and fossil fuels  have caused numerous government agencies and industry leaders and the public  to initiate various Green Initiatives, which are focused on the optimization of resource usage for both societal and economic reasons.   Example trends to watch:  Carbon Management, Water Management, and Climate & Weather Modeling

3. Globally Integrated Enterprise:  What will an enterprise in the 21st century look like? The best-of-breed globally integrated enterprise will be architected (1) to deliver competitive offerings by leveraging low-cost and/or specialized capabilities of its global partner network, (2) to foster innovation by collaboratively harnessing the expertise of its global workforce, and (3) to deliver locally-differentiated products and services to its global customer base by packaging multiple offerings.  This will require transformation of existing enterprises in terms of their processes, information technology organizational structures, governance models, workforce education, business agility and resiliency, etc.

4.  Business Architecture:  We’ll see more and more attention on innovation in business model design.  It’s quite clear that this is the path to the most sustainable kind of competitive advantage.  That’s one of the biggest reasons you hear the buzz around Service Oriented Architecture (or SOA).  If you want to be that kind of rapid-response, global player, SOA is the way clients are going to drive more and more flexibility into their application and business process base, and that flexibility is fundamental to business model redesign.   But you can’t just focus on implementing SOA, you need to first design the business model.  We expect to see a whole new profession of business architects and business model consultants.

5.   Emerging Markets:  The GDP in emerging countries continues to outpace that of developed nations.  The BRIC Countries (Brazil, Russia, India and China will continue to represent remarkable opportunities in terms of Outsourcing and IT spending.  It should be noted that business models in these countries are different than in mature economies, allowing businesses to leapfrog to new infrastructure technologies. 

5a) Africa: Africa, and its population of over 900 million, has worked its way into the global dialogue on economic opportunity. And while there are still many obstacles to be overcome, Africa is fast becoming a legitimate force in the global economy, thanks in part to an abundance of natural resources, a steadily growing economy, and some long-awaited political stability. 

6.  The Increasing Power of the Consumer:  Web2.0 tools and the growing integration of technology into every aspect of life – home, office, home office, family, car and recreation – will profoundly impact business technology.   The control of technology is shifting from corporations to individuals.  This will result in ‘consumerizing’ business IT and creating an entirely new consumer to business (C2B) as well as business to consumer (B2C) marketplace.   Examples include:  Apple iPhone, Amazon, Healthcare performance ratings, mobile search.

7.  Social Networking:  Social networks are webs of personal acquaintances made through common interests or circumstances.  Social networking applications are solutions that are predominantly designed to enable interaction between groups of individuals through the association of individuals either to each other or to a vertical domain. Social networking services are tools which allow users to represent and extend their social networks online.  We expect more hype surrounding social networks in 2008 as industry leaders attempt to find a way to make money in this space.

8.  3D / Virtual Worlds:  Virtual worlds will become a powerful tool and a driving force to what many are calling the 3-D Internet – one that is open, immersive, innovative, and social …  and that enables new or transformed applications that impact our business and societal progress, many we haven’t even imagined as yet.   In 2008 we expect to see a number of announcements on new consumer oriented virtual worlds that appeal to niche segments.

9.  Viral Marketing:  Viral marketing and viral advertising refer to marketing techniques that use pre-existing social networks to produce increases in brand awareness, through self-replicating viral processes, analogous to computer viruses.  Viral promotions may take the form of funny video clips, interactive Flash games, advergames, images, or even text messages.  Viral marketing describes any strategy that encourages individuals to pass on a marketing message to others, creating the potential for exponential growth in the message exposure and influence. 

10.  Mobility is Poised for the Next Phase:  Perhaps one of the biggest trends to watch is Mobility.  There is so much on the near horizon that makes this an exciting space to watch.  In 2008 we’ll see new devices, new infrastructure technology, increased focus (if there can be more) on digital content, new mobile search and advertising capability, and new enterprise mobile solutions. 

11.  Prediction Markets:  More corporations are setting up their own prediction markets hoping to tap into the wisdom of employees.  Prediction markets are being used to let employees weigh in on a range of matters, from product launch dates to sales growth to economic forecasts. Prediction markets are speculative markets created for the purpose of making predictions.  Assets are created whose final cash value is tied to a particular event (e.g., will the next US president be a Republican) or parameter (e.g., total sales next quarter).  The current market prices can then be interpreted as predictions of the probability of the event or the expected value of the param
eter.  Other names for prediction markets include information markets, decision markets, idea futures, event derivatives, and virtual markets.

As always, I am interested in your thoughts.  What trends did I miss?  What trends are important from your perspective?

Cowen’s Best of 2007 Disruptive Innovation Awards

Cowen & Company is an investment banking firm that focuses on a number of sectors, including Health Care, Technology, Media & Telecommunications, Consumer, Aerospace & Defense, and Alternative Energy.  The firm recently published a report titled Best of 2007 Disruptive Innovation Awards which reports on the most disruptive and innovative products and services in the consumer sector.  Cowen’s panel of judges voted using two criteria:

  • Those products most likely to have a disruptive influence on the technology landscape in 2008
  • Those products whose disruptive influence is inadequately appreciated by the investment community.

The report listed the following winners:

  • Samsung’s Storage Drives:  All-flash, solid state storage drives for PCs establishing a new product category whose
    inevitable adoption has extremely positive implications for chip and chip equipment makers. 
    See press release here
  • The OLPC XO laptop:  The first mass market personal computer with a price point of just $200.  The consortium behind One Laptop per Child (see website for more information) has created a brilliant fully featured system that only excludes two things familiar to most PC users:  Microsoft Windows and Microsoft applications.
  • The Big Switch:  Rewiring the World, From Edison to Google by Nick Carr – Synopsis: the utility computing era has arrived; internal corporate IT operations will now face substantial external competition.  According to Cowen, this book is the best bet to be the most influential tech business book of the next 12 months.  See more info on the book here. 
  • Digital-to-analog set top box converters:  Poised to be the #1 growth category in consumer electronics in 2008. With the coming DTV transition, 14 MM antenna-only US TV households will have cable quality reception without paying a cable bill.  For more background on set top boxes, go here
  • Apple’s iPhone:  The most hyped product launch in ages, but with under-appreciated disruptive potential for two reasons: 
    • Research in Motion:  due to all but inevitable enterprise support for the iPhone in 2008, and
    • Verizon and other wireless service providers whose practices of providing walled garden internet service and intentional crippling of desirable cell phone features are under full scale assault.
  • Google Maps:  My Location application (go here for more info) provides location-based services without a GPS.  According to Cowen, this will help Google realize its mobile ambitions while accelerating Verizon’s descent into being just a big dumb pipe.

Cowen’s perspective of these disruptive innovations is particularly interesting since it comes from an investment banking point of view.  For more information, check out this MSNBC video where Arnie Berman, chief technology strategist at Cowen and Co. reviews the best disruptive innovations of 2007.

IDC Financial Insights: Top 10 Predictions For 2008

IDC recently held their conference call that provided their top 10 predictions for 2008 in the Financial Industry.  This call was part of a series of Top 10 Prediction calls for the major industries they cover. For this I took the following notes:

Overview Of Spending Cycle

Historically, from 1995 – 2000 the focus was to grow at all costs.  As the economy took a downturn from 2001 – 2003 the focus turned to cut all costs.  Since 2004 firms have been in a period of “Rationalized Investments”.  Growth has been emphasized, but with specific metrics tied to those investments.  Growth initiatives must prove that they will pay off.

Firms are approving IT spending that can impact four areas. 1) Customer Acquisitions, 2) Customer Retention, 3) Knowledge worker collaboration (web 2.0 initiatives) and, 4) Improved Operational Efficiency (smart bet on platforms that can be leveraged across customers and partners)

There are three main Business Drivers for IT Spending:

  1. Globalization open ups new markets, but it also opens up door for competitors to take away existing business.  Footprint must be strong wherever you go and firms must invest in a strong technology infrastructure.  US institutions are attractive takeover targets.
  2. Regulatory Milestones.  Meeting these milestones allows to improve operational efficiency
  3. Customer Centricity.  This is now back with a growth tarket attached to it.  Initiatives must build upon infrastructure improvements that have been made over the years.

Top Ten Predictions For 2008

1.  Financial Institutions Will Move Risk Management / Analytics to Top Investment Priority.  This is a result of the Sub-Prime mortgage impact. Also, data analytics are a focus as the regulatory compliance has led to significant amounts of data being available.  Finally, Basel II investments has led to more tools and visibility that can feed new predictive models.

2. Contactless Mobile Payments Meets its Demise. While drivers remain to come up with a mobile payment solution, there have been delays in deploying contactless handsets and the necessary infrastructure to support contactless mobile payments.  The industry ecosytem will need to come together and agree on standards and/or alternative technologies

3. Insurers Recognized as Web 2.0 Leaders.  Insurers are expected to take the lead in using SOA and webservices in order to streamline operations, saving resources, and providing better service to policyholders.

4. Treasury and Cash Management Fees will Increase at Tier 1 Banks Globally.  Banks are expected to raise the prices of current products and introduce new Cash Management products with higher price points.  The driver for this is that banks are looking to increase their non-interest based revenues and will be doing this by introducing high value-added products and services.

5. BPO growth, already strong double digits, will accelerate.  The economy and resulting budget constraints will drive important decision making on where firms will invest and where they can offload certain processes.  Example:  The large banks will realize that they cannot differentiate themselves in check processing,

6. Basel II initiatives will morph into enterprise data management at tier 1 Global Banks.  This prediction is as a result of Basel II projects nearing completion.  Meeting these regulatory requirements have resulted in new data to analyze. Expect more data management and integration efforts at tier 1 banks as they realize the power of data tied to analytics.

7. B2B Payment Hub Race will get underway.  IDC says they expect at least 10 new B2B payment hubs to launch in 2008 as banks apply their learnings from electronic bill payment and presentment in the consumer market to the corporate market.  So expect new services designed for electronic invoice presentment and payment.  Drivers include the open standards that make it easy for corporations to switch banks.  First mover advantage will be huge here.

8.  Legacy Billing Systems Get Tossed.  P&C insurers are expected to increasingly replace their legacy billing systems as they look to reduce complexity, reduce support costs and look to increase flexibility of billing operations. The new billing systems will be more tightly integrated with the core admin systems.

9.  Number of US Banks will shrink to less than 8,000 in 2008.  Consolidation will increase due to a number of factors, including 1) the economic turmoil in the US, 2) Softening Consumer Credit and Real Estate lending and 3) The weakened US Dollar.

10.  Capital Market firms go beyond the grid.  Firms are looking to increase the efficiency of processing the flood of data from the increased volumes of transactions.  They are also looking to leverage and manage all their data assets. As analytic tools are demanding increasingly higher levels of computing power to deal with advanced and more complex securities and trading techniques.  This will all result in IT departments having requirements on improving computing power, but keeping a lid on growing data center costs.  Thus look for first movers in the area of cloud computing technology.


Here is the URL for you to download the slides and listen to the broadcast again if you were unable to attend the live event.  IDC will ask you to provide basic information (your name, email, and company) in order to download the slides, as these proceedings are high in value but also complimentary. www.financial-insights.com/top10fi

IDC Reveals Top 2008 Cross-Industry Predictions

This week IDC is having a series of Top 10 Prediction calls for the major Industries they cover.   The first event was held today and serves as the kickoff to the rest of the conference calls.  It covered the top predictions across all industries.  There are two big prediction themes that IDC came up with:  1) Spending on Green Initiatives and 2) Spending on Web 2.0 Initiatives.

For the call that was held today, I took the following notes:

Overview Of Spending On IT in 2008

Those Industries spending above average in 2008 include….

  • Healthcare (7.5%) 
  • Government (6.3%) 
  • Process Manufacturing (6.2%) 
  • Discrete Manufacturing (6.0%) 
  • Utilities (5.9%)

Those industries where spending is below average include:

  • Banking (3.0%) 
  • Retail (5.3%)

2008 Big Theme #1 = Green

  • Energy:  Climate change issues will drive increased investment in energy and IT as companies initially focus on cutting energy costs across their organizations 
  • Manufacturing:  For environmental compliance and corporate responsibility – your suppliers problems will become your problems.  IDC gave the example of the issue the Toy Industry had this year with the China Toy Manufacturers. 
  • Government:  IDC expects that Governments will lead by example in area of Green IT initiatives 
  • Retail:  Corporate social responsibility and "Green Retail"  will be one of the top 5 priorities for retailers.  IDC says there are many areas where retailers can become more ‘green’.

2008 Big Theme #2 = Web 2.0 For Industry

Those industries that have a heavy consumer orientation will accelerate their Web 2.0 usage. 

  • Healthcare:   Healthcare is such a consumer oriented market.  Therefore, expect Health 2.0 will have a profound impact on how consumers interact with the health system 
  • Financial Services:  Another consumer oriented sector, expect institutions to embrace Web 2.0 and graduate from experimentation to deployment of next generation web technologies. 
  • Government:  Gov 2.0 will replace e-Gov as younger citizens demand a more interactive online experience. 
  • Retail:  IDC expects an increased focus on Web 2.0 as the online social community momentum targets traditional retailers.

Biggest and Best Predictions: 

  • Financial:   As a result of the impact of the sub-prime mortgage issue, expect financial Institutions to replace revenue growth with risk management / analytics as a top investment priority.
  • Health:   Consumers are demanding more information from the Health industry.  As a result, Business Intelligence investments will be a top priority to increase information transparency
  • Energy:  Intelligent grid initiatives will leverage existing investments and target specific problem areas
  • Manufacturing:   Becoming a Globally Integrated Enterprise becomes a focus as the large manufacturers move toward a globally integrated business model.
  • Government:  Infrastructure optimization and IT resource re-purposing will be top Government IT Trend
  • Retail:   Retailers will require the centralization and integration of demand intelligence

Out on a Limp Predictions (IDC says there is a less than 50% chance of these happening.

  • Financial:    Contactless Mobile Payment meets its demise.
  • Health:   Retail clinics disrupt healthcare delivery in 2008 
  • Government:  Government will begin to experiment with "everything as a service"
  • Retail:   Personalized promotions and narrowcast advertisting officially start the slow death of the newspaper circular.

Industry Specific IDC Prediction Conference Calls

There are a series of follow on conference calls on the major sectors IDC covers.  You can find out more about these sector calls by going to their events page.   Here is a list of the upcoming calls: 

  • Worldwide Financial Services 2008 Top 10 Predictions – Jan. 7th 
  • Worldwide Manufacturing 2008 Top 10 Strategic Predictions – Jan. 8th 
  • Global Retail Insights 2008 Top 10 Predictions  – Jan. 8th 
  • Health Industry Insights 2008 Top 10 Predictions – Jan. 9th 
  • Energy Insights 2008 Top 10 Predictions – Jan. 10th 
  • Worldwide Government 2008 Top 10 Strategic Predictions – Jan. 11th 
  • Global Top 10 Predictions for Product Lifecycle Strategies in 2008 – Jan. 24th

I hope to be attending these calls and reporting on them here on the HorizonWatching blog.   

Top 10 Technologies For 2008 According to Gartner

Gartner, Inc. has a list of top 10 technologies and trends that will be strategic in 2008.  They released the list below at their Gartner Symposium/ITxpo, held in Orlando, Florida last October.   According to Gartner, a strategic technology is one with the potential for significant impact on an enterprise in the next three years.   

Gartner’s top 10 strategic technologies for 2008 include:

  1. Green IT.  The focus of Green IT will accelerate and expand in 2008.  This will impact datacenters, powergrids, and those companies with heavy carbon emissions.
  2. Unified Communications.  Gartner analysts expect the next three years to be the point at which the majority of companies implement IP Telephony.
  3. Business Process Modeling.   The strategic imperative for 2008 is to integrate the various activities being peformed across the enterprise by all roles, including enterprise architects, senior developers, process architects and/or process analysts.  Gartner expects BPM suites to fill a critical role as a compliment to SOA development.
  4. Metadata Management.   Metadata management is a critical part of a company’s information infrastructure.  It enables optimization, abstraction and semantic reconciliation of metadata to support reuse, consistency, integrity and shareability. 
  5. Virtualization 2.0.  Virtualization technologies can improve IT resource utilization and increase the flexibility needed to adapt to changing requirements and workloads.  The next phase in Virtualization technologies are those that enable broader improvements in infrastructure cost reduction, flexibility and resiliency.
  6. Mashup & Composite Apps.   Gartner says that enterprises must formulate a mashup strategy.  According to Gartner, by 2010 Web mashups will be the dominant model (80 percent) for the creation of composite enterprise applications.
  7. Web Platform & WOA.  Companies must evaluate service based delivery technologies.  Web platforms are emerging which provide service-based access to infrastructure services, information, applications, and business processes through Web based “cloud computing” environments.
  8. Computing Fabric.  A computing fabric is the evolution of server design beyond the interim stage, blade servers, that exists today. The fabric-based server of the future will treat memory, processors, and I/O cards as components in a pool, combining and recombining them into particular arrangements to suits the owner’s needs. 
  9. Real World Web. This term describes when information from the Web is applied to the particular location, activity or context in the real world.  It is intended to augment the reality that a user faces, not to replace it as in virtual worlds. Expect new applications, new revenue streams and improvements to business process that can come from augmenting the world at the right time, place or situation.
  10. Social Software.  Through 2010, Gartner expects the Web 2.0 product environment, and the social networking/collaboration it enables) to continue to evolve and have an impact on enterprises.

For more information, check out the article I found at Network World