Ed. note: On December 18th Wikibon Chief Analyst Dave Vellante (right), EMC Global Marketing CTO Chuck Hollis (center), and EMC SVP of Global Services Tom Roloff (left), spent 40 minutes in The Cube in Marlborough, Mass., discussing the trends and events they expect in the coming year. The following is the first is a five-part series examining what they predicted.
DV: It is December 18th and it’s hard to believe that 2012 is coming to an end. This past year was when cloud became reality, and there’s been a ton of action around flash, particularly in the startup area, that we covered extensively here on Wikibon and SiliconAngle. Converged infrastructure, which really was a three-horse race between VCE, HP, and Oracle – now everybody’s hopped on the converged infrastructure bandwagon. Big data is really hitting its stride, and there’s a lot of activity there. We continue to see industry consolidation, and BYOD is all the trend.
So, Chuck, you have a lot of experience in predictions. You write a blog and every year you make some predictions.
CH: And some of them actually come out. It’s amazing.
DV: And Tom, you have the CIO perspective. I know you spend a lot of time talking to IT executives. So we’re going to basically run the gamut here. So let’s start with the macro trends. What are your predictions for 2013?
Shifting Spending
CH: If we look at what the analysts are telling us, IT spend in 2013 will be just a little north of what we saw in 2012. So resources are tight, the economy’s tight. My guess is the first half of 2013 will look at lot like the second half of 2012. That being said, I think we both see some hot pockets where people are investing deeply. I’ve come across several health care providers who are investing heavily. Certain industries are investing in mobile. So even though the aggregate picture might not be the rosiest in the world, there certainly are hot spots.
TR: I would agree. First, people are looking to shift spend from running the business & keeping the lights on to helping the create new revenue streams & enabling the business in new ways. That pie has been 75-25 keep the lights on for a long time, and I think all enterprises & all the CIOs I’m talking to are asking ‘What do I do to get that keep-the-lights-on part to be more efficient, and what do I do to free up dollars to reinvent myself? And maybe that allows me to keep a similar sized budget but deploy it in different ways.’ So I think there’s a cost reduction over here, investment over there kind of conversation going on.
CH: The other thing I’ve noticed is tough economic times tend to accelerate transitions. If you’re thinking of investing in new systems to help save money or create new value, there’s nothing like a spell of bad weather outside to make that go faster.
DV: So what do you guys see for IT growth? Are we talking 3%-4% based on your radar?
TR: It’s going to vary by industry, but I think low-to-mid single-digits is what everybody’s been telling us. I’ll tell you that larger corporations are trying to do more with less. I’m seeing some of the SMBs saying, ‘Hey, I’ve got opportunities to really invest strongly.’ Health care is a really hot area right now.
The Rich Get Richer
DV: So my intuition is that IT growth is really tied to GDP now. They are in lock step. So the prediction I would make for 2013 is the rich get richer. What I mean by that is the IT business has really become an oligopoly. You’ve got seven players – IBM, HP, Dell, EMC & VMware, Oracle, Cisco, & Microsoft – that actually own a lot of the market.
CH: And they’re all good friends.
DV: Put it this way, you all watch what each other is doing. So VMware’s acquisition of Nicera creates this ripple effect. So I would predict that that oligopoly actually gains share in 2013.
TR: I think CIOs are sitting there saying, ‘Can I actually consolidate my vendor base more.’ they’re saying, ‘I’ve got a lot of guys to manage here. I’m always going to experiment on the fringes here, but when it comes to the core partners I’m working with, I can’t manage 20 of them. Can I get it down to five or six.’ I’d put SAP in your bucket. And I think CIOs are asking themselves, ‘I’m going to need certain applications, and then when I get down into platforms & infrastructures, how do I bet on the right guy?’
Ed. note: The next article in the series will cover service providers, both traditional and Cloud providers including SaaS and Amazon.com.
[...] The following is the second is a four-part series examining what they predicted. The first part http://servicesangle.com/blog/2012/12/24/transition-and-consolidation-vellante-hollis-and-roloff-dis… focused on overarching trends for 2013. This pat picks up where the first one left off, discussing [...]
[...] The following is the second is a four-part series examining what they predicted. The first part http://servicesangle.com/blog/2012/12/24/transition-and-consolidation-vellante-hollis-and-roloff-dis… focused on overarching trends for 2013. This part picks up where the first one left off, discussing [...]
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