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Summit Strategy: Seven Opportunities for Surviving an Industry in Irons

  Industry Statistics published in DM Direct Special Report
January 28, 2003 Issue
  By DMReview.com Web Editorial Staff

When Summit Strategy's team of analysts assessed the current information technology (IT) environment and looked forward into 2003, they saw few indications that the industry's tough times will ease anytime soon. Still, the IT sector is hardly one to stay static, even when budget-constrained customers are more interested in fully exploiting their existing infrastructure than in deploying the latest round of innovative products and technologies. In a report entitled "The 2003 Summit Seven: Seven Opportunities for Surviving an Industry in Irons," Summit has identified a number of core transformations underway that are likely to play major roles in altering IT vendors' markets and strategies in the coming year. Given the current economic climate, it's especially critical for vendors to understand these trends and to position themselves to take advantage of the opportunities these shifts may provide. The 2003 Summit Seven:

1. Reality Bites: Business Value Drives New IT Industry Value Proposition. Everyone seeking relief from this long stretch of single-digit IT growth will need to wait a while longer for a broad- based upturn. Before we break through to better times, enterprise customers first must stabilize their IT infrastructures, extract maximum value from their underutilized investments and closely align their future IT purchases with their fundamental business objectives.

2. Services Shakeout: IT Confronts Its Own Industrial Revolution. Many elements of traditional IT services are being commoditized as Web-services-based methods simplify many integration demands and as workflow- based software routines systematize and automate configuration, provisioning, management and other once-custom tasks. To survive and prosper, systems integrators and other service providers must move toward utility-based delivery models and higher-end business services.

3. The Line Blurs Between Software and Services. The intrinsic advantages of creating Net-native software and delivering it as an online service will put increasing pressure on traditional software products and business models. In 2003, software-as-services vendors will begin to reshape the markets' expectations about how business solutions should be developed, procured and delivered.

4. Eyes on the Prize: New Round in the Fight for SMBs. The history of our industry is littered with the failed attempts of IT vendors to conquer the massive and dauntingly complex small- to mid-size market. Enterprise market saturation and IT budget constraints are now driving a host of vendors to take another run at the small- and mid-size business sector, setting the scene for a high-stakes free for all.

5. Web Services Form DNA for New Industry Architecture. As Web services gain a foothold, it is becoming increasingly clear that these XML- based standards will drive changes that affect almost every element of the IT industry. As early adopters move to implement service-oriented architectures, independent software vendors and systems integrators move to join software tools and platform vendors in the pursuit of Web services-based strategies and alliances.

6. IT Consolidation Spawns New Types of Ecosystems. The tough economic times have driven a wave of vendor mergers and acquisitions, and we expect this consolidation to continue, even when the industry turnaround arrives. Customers want vendors - individually or collectively - to take on full accountability of life cycle IT solutions, a multisourcing demand that will drive new multilevel alliances throughout both horizontal and vertical markets.

7. WiFi Remaps Wireless-Industry Competition. Even as uncertainty about 3G wireless networks mounts, high- bandwidth local-area WiFi networks are taking the world by storm. The emergence of WiFi is shifting power away from the major wireless operators and equipment suppliers, and toward the IT giants that provide WiFi equipment and enterprise platforms.

Beyond the Summit Seven are three Future Watch "trends in waiting" that could presage massive shifts over time: "Multisourcing Opens the Tap for Utility Computing," "Automation Motivation: Enabling Real-Time Business Intelligence" and "Linux as Giant Killer: Killing Someone Else's Giant Rather Than Yours."

According to the Summit report, vendors cannot afford to hunker down and ignore the fundamental changes underway, even during this period of economic malaise. Vendors that understand the ramifications of these shifts and position themselves to capitalize on them will be best able to move aggressively when the business climate brightens.

To obtain the entire Summit Seven 2003 report, visit http://www.summitstrat.com/ass ets/SSV09RA.


For more information on related topics visit the following related portals...
Business Intelligence and Strategic Intelligence.

This piece has been brought to you by the DMReview.com Web Editorial staff.

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