Executive People - Gartner

PC Market in Western Europe Declined 20.5 Per Cent in First Quarter of 2013

Wed, 15 May 2013 00:00:00 +0200

PC shipments in Western Europe totalled 12.3 million units in the first quarter of 2013, a decline of 20.5 per cent from the corresponding period of 2012, according to Gartner, Inc. (see Table 1).

"The first quarter of 2013 brought the worst quarterly decline in Western Europe since Gartner started tracking PC shipments in this region," said Meike Escherich, principal research analyst at Gartner. "Wide availability of Windows 8-based PCs could not boost consumer PC purchases during the quarter. Although the new Metro-style user interface suits new form factors, users wonder about its suitability for traditional PCs — non-touchscreen desktops and notebooks."

All PC segments in Western Europe exhibited year-on-year declines in the first quarter of 2013. Mobile and desktop PC shipments fell by 24.6 per cent and 13.8 per cent, respectively. Shipments to the professional PC market declined by 17.2 per cent, while those to the consumer PC market decreased by 23.7 per cent.

HP and Acer both recorded declines of over 30 per cent. However, despite seeing its consumer notebook volumes halve during this quarter, HP remained the market leader.

Lenovo and Apple were the only top-five vendors to record growth. Lenovo was again the fastest-growing vendor, with growth in both desktop and notebook PC shipments. This enabled it to close the gap with Acer, which held on to second place. Lenovo continued to expand in the consumer PC sector by winning share from both Acer and HP, and by being aggressive in the professional PC market, where it competed closely with HP and Dell.

"The battle for consumer wallet share continues between different devices," said Ms Escherich. "The PC is the first to fall by the wayside as usage patterns shift toward smartphones and tablets. This ongoing trend will have a profound impact on the size of the installed base of PCs," said Ms Escherich.

Vendor	1Q13 Shipments	1Q13 Market Share (%)	1Q12 Shipments	1Q12 Market Share (%)	1Q12-1Q13 Growth (%)
HP	2,424	19.7	3,550	22.9	-31.7
Acer	1,436	11.7	2,272	14.7	-36.8
Lenovo	1,430	11.6	1,333	8.6	7.2
Dell	1,214	9.9	1,423	9.2	-14.7
Apple	972	7.9	964	6.2	0.8
Others	4,831	39.3	5,941	38.4	-18.7
Total	12,307	100.0	15,483	100.0	-20.5

Note: Data includes desk-based PCs and mobile PCs. Media tablets are excluded.
Source: Gartner (May 2013)

CIOs Will Need to Manage Both Technology and Business Innovation to Gain Competitive Advantage with Big Data

Tue, 07 May 2013 00:00:00 +0200

CIOs must realise that innovation needs to go well beyond the technology used to manage big data, according to Gartner, Inc. To get maximum value, organisations will need to seek and embrace innovation in the way business problems are analysed with big data.

"Big data requires an organisation to embrace innovation on two levels," said Hung LeHong, research vice president at Gartner. "First, the technology itself is innovative. Second, organisations must be willing to innovate in the way they perform decision support and analytics. This second reason is not a technology challenge, but rather a process and change management challenge.

"Big data technologies bring innovative ways of analysing existing business problems and opportunities. New data sources and new analytics can improve the organisation in ways that have never been used before."

Big data's ability to analyse unstructured data in large volumes and from disparate sources leads to innovative opportunities. In most cases, there has been very little precedence for the ways big data can add value to an organisation. It was never possible to run these kinds of analyses or access these new types of data. Seeking value from big data technologies requires innovative thinking and a willingness to accept and trust these sources and methods. CIOs should treat big data projects as innovation projects that will require change management efforts. The business will need time to trust new data sources and new analytics and organisations should start small with pilots that allow full transparency on the data, the analytics and the resulting insight.

However, big data isn't just about the large sources of external data, such as public social network data. Creative CIO thinking can unearth valuable information sources already inside the organisation that are underused.

"Perhaps CIOs feel more comfortable starting with internal data sources, because the thinking is that much of it is already being managed by IT," said Mr LeHong. "However, in many cases, these internal data sources are not controlled by IT at all. For example, call centre recordings, security camera footage and operational data from manufacturing equipment all represent potential internal sources of data to investigate, but they are usually not under the control of IT."

Therefore, CIOs and their teams will need to work with the business to fully understand the pockets of data that are available. With some creative thinking, even data that is already captured can be made richer. Organisations that use big data technologies can afford to keep the full, raw data, building up rich sources of data that can provide new insight. However, CIOs will need to ensure that there is always a clear business purpose and outcome for storing this new data.

Internal data has an additional advantage. It is a good starting point for big data projects because the organisation already owns the data, and it may be easier and/or less costly than accessing external data sources. Also, compared with external sources, the organisation will be more likely to trust the internal data because it comes from its own systems, logs and other assets.

Some organisations have used big data technologies to make existing analytics faster. Although technology may enable faster speed, getting business value from that speed often requires process changes.

Gartner research shows early adopter organisations that implemented faster analytical capabilities changed their processes to get the maximum benefit from the speed. For some organisations, the speed in analysis provides the ability to include a full week of sales data when running analytics, such as price/promotion/markdown optimisation. In the past, because these optimisations would take a day to run, Sunday's sales data often did not make it into the calculations. Now, with the ability to run the optimisations in minutes, organisations can include the full week's data — making their optimisations immediately up to date with market activity.

"CIOs must ensure that big data projects that improve analytical speed always include a process redesign effort that aims at getting maximum benefit from that speed," said Mr LeHong. "Before pursuing big data investments, ensure that the evaluating team has a clear understanding of how faster analytics will lead to an improved business outcome — and build this into the business case."

More detailed analysis is available in the report "CIO Advisory: Getting Value from Big Data Requires Innovative Business Thinking and Process Change." The report is available on Gartner's web site at http://www.gartner.com/resId=2293217.

Additional information is available in the Gartner Special Report "Long Range Trends, Scenarios & Planning for Business Executives & CIOs." The special report can be viewed at http://www.gartner.com/technology/research/cio-trends/ and includes links to reports and video commentary that examine long-view scenarios, perspectives and advice to help CIOs harness business shifts before their competitors.

Gartner will examine the business trends and implications for IT during the complimentary webinar, "Chief Executive Concerns and the IT Implications" taking place today, 7 May at 2:00pm and 5:00pm BST. To register for the webinar, please visit http://my.gartner.com/portal/server.pt?open=512&objID=202&mode=2&PageID=5553&resId=2392415&ref=Webinar-Calendar.

CEO and Senior Business Executive Survey Shows 52 Per Cent of CEOs Have a Digital Strategy

Tue, 09 Apr 2013 00:00:00 +0200

2013 will be a turning point year as CEOs and senior executives, by a ratio of more than four to one, plan to increase IT investment in 2013, rather than cut it, according to a recent survey by Gartner, Inc. The 2013 Gartner CEO and Senior Executive Survey found that, as macro uncertainties abate, 78 per cent of CEOs now feel able to plan their 2013 and 2014 investments and growth.

The Gartner CEO and Senior Executive Survey of more than 390 senior business leaders in user organisations worldwide was conducted between October and December 2012. Qualified organisations were those with annual revenue of \$250 million or more. The survey results show that while major political and economic uncertainties obstructed business investment last year, the fog is now clearing, and digital will play a prominent role in CEOs' 2013 plans.

"This is the year when business leadership teams must commit to investing bravely and deeply to redevelop the technology and information capability of their firms," said Mark Raskino, vice president and Gartner fellow. "After more than a decade of modest investment and sorting out the basics, it's time to think ahead. Business leaders tell us they recognise the need to invest in e-commerce, mobile, cloud, social and other major technology categories, and the capabilities they enable. That can't be done from within existing IT budgets alone."

Gartner's CEO and senior executive survey showed that many business leaders think they have a digital strategy, as 52 per cent of survey respondents said that they have a digital strategy.

"CEOs and leadership teams must crystallise what they mean by digital strategy and work with a small subgroup from the executive team to define what 'digital' means and how it manifests in the broader business strategy," said Jorge Lopez, vice president and distinguished analyst at Gartner. "They must ensure all elements of the digital strategy link clearly to the core business strategy, and that they do not form an independent, possibly distracting, programme of change."

Business leaders intend to change the mix of leadership talent needed to make that change — with chief data officers, chief digital officers and new heads of innovation on the way. The survey found that 19 per cent of business leaders expect to see a chief digital officer by 2014, and 17 per cent expect to see a chief data officer.

"CIOs should embrace growing digital, data and innovation needs, and not stand back from them," said Mr Lopez. "CIOs who intend to stay with their firms for longer than two years should be developing digital business, business information governance and innovation leadership capabilities in themselves and in their teams. CIOs who intend to retire or step back into other roles should help their organisations by incubating next-generation talent in the areas of digital media, information exploitation, and digitally enabled product and service innovation. This can be done inside as well as outside the IT department."

"A number of organisations are already making new, very big bets in information and technology innovation that run to hundreds of millions of dollars of fresh investment," Mr Raskino continued. "The greater risk now is assuming that your lacklustre technology capability can remain a 'back burner' issue for another couple of years."

More detailed analysis is available in the report "CEO and Senior Executive Survey 2013: As Uncertainty Recedes, the Digital Future Emerges." The report is available on Gartner's web site at http://www.gartner.com/resId=2387715.

Worldwide IT Spending on Pace to Reach \$3.8 Trillion in 2013

Thu, 28 Mar 2013 00:00:00 +0100

Worldwide IT spending is projected to total \$3.8 trillion in 2013, a 4.1 per cent increase from 2012 spending of \$3.6 trillion, according to the latest forecast by Gartner, Inc. Currency effects are less pronounced this quarter with growth in constant dollars forecast at 4 per cent for 2013.

The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets. For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognise market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork.

"Although the United States did avoid the fiscal cliff, the subsequent sequestration, compounded by the rise of Cyprus' debt burden, seems to have netted out any benefit, and the fragile business and consumer sentiment throughout much of the world continues," said Richard Gordon, managing vice president at Gartner. "However, the new shocks are expected to be short-lived, and while they may cause some pauses in discretionary spending along the way, strategic IT initiatives will continue."

Worldwide devices spending (which includes PCs, tablets, mobile phones and printers) is forecast to reach \$718 billion in 2013, up 7.9 per cent from 2012 (see Table 1). Despite flat spending on PCs and a modest decline in spending on printers, a short-term boost to spending on premium mobile phones has driven an upward revision in the devices sector growth for 2013 from Gartner's previous forecast of 6.3 per cent.

Table 1. Worldwide IT Spending Forecast (Billions of US Dollars)

	2012 Spending	2012 Growth (%)	2013 Spending	2013 Growth (%)	2014 Spending	2014 Growth (%)
Devices	665	9.0	718	7.9	758	5.7
Data Centre Systems	141	1.9	146	3.7	152	4.0
Enterprise Software	279	3.5	297	6.4	316	6.7
IT Services	878	1.5	918	4.5	963	4.9
Telecom Services	1,655	-0.4	1,688	2.0	1,728	2.4
Overall IT	3,618	2.1	3,766	4.1	3,917	4.0

Source: Gartner (March 2013)

"The global steady growth rates are a calm ocean that hides turbulent currents beneath," said John Lovelock, research vice president at Gartner. "The Nexus of Forces — social, mobile, cloud and information — are reshaping spending patterns across all of the IT sectors that Gartner forecasts. Consumers and businesses will continue to purchase a mix of IT products and services; nothing is going away completely. However, the ratio of this mix is changing dramatically and there are clear winners and losers over the next three to five years, as we see more of a transition from PCs to mobile phones, from servers to storage, from licensed software to cloud, or the shift in voice and data connections from fixed to mobile."

The outlook for 2013 for data center systems spending is forecast to grow 3.7 per cent in 2013, down 0.7 per cent from Gartner's previous forecast. This reduction is largely due to cuts to the near-term forecast for spending on external storage and the enterprise in the economically troubled EMEA region.

Worldwide enterprise software spending is forecast to total \$297 billion in 2013, a 6.4 per cent increase from 2012. Although the growth for this segment remains unchanged from Gartner's previous forecast, this belies significant changes at a market level, as stronger growth expectations for database management systems (DBMS), data integration tools and supply chain management compensate for lower growth expectations for IT operations management and operating systems software.

While the outlook for IT services remains relatively unchanged since last quarter, continued hesitation among buyers is fostering hypercompetition and cost pressure in mature IT outsourcing (ITO) segments and reallocation of budget away from new projects in consulting and implementation.

The global telecom services market continues to be the largest IT spending market and will remain roughly flat over the new several years, with declining spending on voice services counterbalanced by strong growth in spending on mobile data services.

More-detailed analysis on the outlook for the IT industry will be presented in the webinar "IT Spending Forecast, 1Q13 Update: The Nexus of Forces Effect on Spending." The complimentary webinar will be hosted by Gartner on 2 April 2 at 4:00pm UK time. During the webinar, Gartner analysts will look at where IT spending is headed in 2013. To register for the webinar, please visit http://my.gartner.com.

Gartner's IT spending forecast methodology relies heavily on rigorous analysis of sales by thousands of vendors across the entire range of IT products and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data upon which to base its forecast. The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available at http://www.gartner.com. This Quarterly IT Spending Forecast section includes links to the latest IT spending reports, webinars, blog posts and press releases.

Service-Led Solutions Will Displace Traditional Sourcing Approaches Through 2015

Wed, 20 Mar 2013 00:00:00 +0100

The drive of organisations toward increased standardisation of infrastructure, applications and business processes, combined with expanding and more comprehensive provider ecosystems, shows that service-led solutions will displace traditional sourcing approaches through 2015, according to Gartner, Inc. To remain relevant, IT service providers must bridge legacy offerings and new services based on new technologies, new delivery models and new architectures.

"The IT services market plays a key role in bridging legacy offerings and new cloud delivery paradigms. IT services providers able to adapt to change, improve competitiveness and identify growth opportunities will thrive," said Eric Rocco, managing vice president at Gartner. "Growth opportunities certainly exist for service providers with life cycle solutions in relation to the Nexus of Forces (cloud, social, mobile and information). However, this requires IT services providers to adapt to significant changes, including the growing influence of business leaders in technology investment decisions."

Gartner predicts that the overall IT services market will grow 5.2 per cent in 2013 and continue strong growth through 2016. Growth will largely come from changes and opportunities brought on by the Nexus of Forces and newer delivery models, although not exclusively in the consulting and implementation segments.

Segments will not grow uniformly. Hardware support and software support are among the lower-growth opportunities in the IT services market while cloud-based Infrastructure as a Service (IaaS) and business process as a service (BPaaS) are growing strongly at 13.1 per cent and 47.3 per cent, respectively, in 2013. Agility, not cost, will be the primary reason that many organisations adopt cloud computing. Hybrid IT environments will dominate client IT architectures through 2016, underscoring the importance of skills in the old-world legacy environments as well as the new world "as a service" operating models.

"The big squeeze is on for early IT services providers to achieve sustainable value-based differentiation," said Mr Rocco. "This challenge is prominent in a time when economic uncertainty persists to the point of being essentially a certainty in its own right. Providers must be recognised by clients for delivering tangible business improvement to alleviate the cost reduction pressure, or they simply won't prosper or ultimately survive."

With this in mind, Gartner has identified three recommendations for IT service providers in 2013:

Stop undifferentiated bland marketing messages. Cost reduction focus ignores opportunities to improve the business. Emphasise business value and modernisation/extension to transform clients' existing operations. Differentiate using value. Reinforce with references, and in doing so establish credibility and build trust to grow relationships with business buyers. Pricing models must also reflect the value being impacted. Providers must evolve unit-based pricing to outcome-based and value-based pricing.
Reinvent the service portfolio. Restructure the portfolio of services delivered to heighten focus and impact. Asset-based and Internet Protocol-based service offerings are critical elements of future competitiveness. Assess, prioritise and invest in productising of existing IP assets. Modernise service delivery factories as fast as possible. Promote the value of process enhancement technologies and services (PETS) to your business process outsourcing (BPO) clients.
Determine if your business model is based on scale or specialisation. Services themselves will continue to commoditise. Not all providers need to be business transformation enablers, but only providers focused on operational efficiencies driven by scale and cost discipline should bother committing longer term to services that are clearly more mature and rapidly commoditising, such as segments of the infrastructure outsourcing marketplace. Gartner research suggests it will be increasingly difficult for scale-based business models and highly specialised, higher-margin business models to successfully coexist within the same provider.

"Thriving, let alone surviving, in these conditions is equally challenging for established market share leaders, as it is disruptive for new entrants," said Mr Rocco. "Specialised skills, global delivery, verticalised service portfolios and satisfied customer references have formed the foundation of success for IT services providers in a competitive market. Nevertheless, these critical success factors are growing more complex and demanding. The strategic decision to build future value through scale or through specialisation is now the paramount determination that faces all IT service providers."

More detailed analysis is available in the report "The Gartner Scenario for IT Services Providers: The Future of IT Services." The report is available on Gartner's web site at http://www.gartner.com/resId=2355415.
More information on IT services and outsourcing trends and strategies will be provided at the Gartner Outsourcing & Strategic Partnerships Summit 2013, 9-10 September in London, UK, and 23-25 September in Orlando, Florida. Details on the London Summit can be found at www.gartner.com/eu/outsourcing.

Second-Screen Users Will Drive Social TV Activities

Wed, 20 Mar 2013 00:00:00 +0100

Second-screen devices combined with customised content, interactive apps and loyalty programmes will fuel the behaviour of social TV consumers over the next 24 months, according to Gartner, Inc.

Social TV describes consumer engagement, communication and interaction while watching television. Gartner said social TV activities can enhance the value of the TV experience for consumers and offer opportunities to add new users, drive engagement and open up new advertising opportunities through existing social networks.

"Second-screen devices such as tablets, smartphones and ultrabooks are likely to be the principal force behind social TV experiences as companion apps are increasingly written for that experience," said Michael Gartenberg, research director at Gartner. "A combination of content integration, social interaction and loyalty programmes are the key activities that will make up the social TV experience."

Long-term efforts to connect traditional TV broadcasts to the Internet have largely been limited to either content companion websites or connected devices such as TVs and set-top boxes (STBs) and that none of these approaches has led to the creation of a true social TV experience for consumers. However, three parts of this experience are now in the process of being combined into a holistic social TV experience delivered primarily through companion devices:

The use of social networks such as Facebook and Twitter to allow users to create and check status updates as they engage in real-time conversations related to TV programming
Apps that deliver bonus programming, tighter community engagement and larger social interaction through second-screen devices
Incentive programs that allow for more direct engagement with content to generate loyalty through rewards, check-ins and other gamification methods

These efforts have begun to bear fruit in terms of consumer adoption. Rather than delivering traditional Internet services such as web browsing or social media sites to a connected TV, there has been a shift to companion screens, such as media tablets, that show the benefits of the connected experience and the new activities that are now possible. Most social TV experiences are solely delivered through companion apps for portable devices rather than the TV or STB.

The growth of smartphones, media tablets and ultrabooks and their fast consumer adoption, combined with the rise and ubiquity of consumer social networks, has led to the first integration of consumer social actions to the TV experience and is now transforming expanded activities that can be leveraged by hardware vendors, content providers and advertisers to capture consumer attention.

"TV and video content providers such as cable companies have a great opportunity to target heavy users with social TV in order to reduce potential churn," said Mr Gartenberg. "The time to take advantage of this opportunity is right now as social TV services have not yet been dominated by a single solution and the market is far from saturated."

Some services have begun to embrace the social connection and are driving interaction between TV viewers, while others are using social TV to create loyalty programs that reward viewers for both watching and engaging with content. The net result of these activities will help turn users away from time-shifted catch-up TV experiences, and the commercial-skipping activity associated with them, and back toward live broadcasts. Loyalty programmes that add value for consumers will, in particular, help drive engagement with TV content.

The use of companion apps for social TV experience, combined with hardware additions for command and control, will present another incremental use for second-screen devices as well as creating additional perceived value as people spend more time using them. Gartner expects to see device vendors working with social TV apps to not only deliver content and services but also command and control functions for other hardware devices such as TVs, games consoles and audio systems.

Although social TV will be driven by second-screen devices, the television is expected to remain the primary device for sharing video content in the home. Connected TVs will give access to a much wider range of content via the Internet, offering the possibility of worldwide video sharing, which will also extend the social TV experience beyond local friends and into a truly global arena. In this case it will be the addition of a second screen that will drive the social experience.

"Watching TV was historically a social activity, either as a shared viewing experience or as the topic of post-viewing discussion and analysis," said Mr Gartenberg. "The power of extending shared TV viewing, commenting and critiquing, combined with new ways of offering recommendations to friends, have already proved successful in existing social networks. Embracing and extending these activities to second-screen social TV experiences will drive stronger consumer loyalty, extend the value of brands and content properties and accelerate the curve of both content success and failure in terms of consumer adoption."

More detailed analysis is available in the report "Market Trends: Second Screen Users Will Drive Social TV Activities." The report is available on Gartner's web site at http://www.gartner.com/resId=2357015.

European CRM Budgets Remain Strong in 2013

Thu, 28 Feb 2013 00:00:00 +0100

A recent survey of 119 end-user organisations in Europe conducted by Gartner, Inc. found that 48 per cent will increase their budget for customer relationship management (CRM) initiatives in 2013. Only 5 per cent will decrease their CRM budget this year, down from 9 per cent in 2012.

The survey, conducted in the fourth quarter of 2012, investigated the 2013 CRM plans of organisations that together represented over 20 industries and 33 countries in Europe.

"The upward trend we are witnessing confirms organisations' commitment to improving the management of their customer relationships, despite the volatile economic environment across Europe," said Jim Davies, research director at Gartner.

Gartner predicts that CRM software revenue in Europe will total \$3 billion in 2013, up 7 per cent from last year. "In 2013, investments in CRM will continue to focus on technologies that help drive loyalty, satisfaction and revenue growth. As a result, investment in technologies that drive sales and marketing performance, such as lead management software and digital marketing, will be complemented by technologies that can help deliver, and understand, a consistent cross-channel customer experience," said Mr Davies.

The survey respondents reported on the primary objectives of their CRM initiatives in 2013. For the third consecutive year, increasing customer satisfaction was the No. 1 objective. The survey also uncovered some changes in the top half of the rankings, with objectives linked to cutting costs associated with sales, marketing and customer service disappearing from this half. This reinforces the emphasis that will be placed on customer strategy during 2013.

While the desire to create a "single view of the customer" was ranked the No. 3 objective in 2013, customer data and information, which is paramount to a comprehensive and accurate understanding of the customer, has increased in importance and become the biggest challenge in 2013.

Having a single view of the customer is fundamental to an organisation's ability to understand customers' needs, perspectives and aspirations. It is also essential for optimising sales, marketing and support functions. "Obtaining this single view is, however, complex and requires a master data management strategy that encompasses an increasingly diverse set of data formats and sources, including feedback from customers themselves," said Mr Davies.

More detailed analysis is available in the report "Survey Analysis: European Organizations Crave a Single View of the Customer in 2013," available on Gartner's web site at http://www.gartner.com/resId=2272217.

Worldwide Public Cloud Services Market to Total \$131 Billion in 2013

Thu, 28 Feb 2013 00:00:00 +0100

The public cloud services market is forecast to grow 18.5 per cent in 2013 to total \$131 billion worldwide, up from \$111 billion in 2012, according to Gartner, Inc. Infrastructure as a service (IaaS), including cloud compute, storage and print services, continued as the fastest-growing segment of the market, growing 42.4 per cent in 2012 to \$6.1 billion and expected to grow 47.3 per cent in 2013 to \$9 billion.

Cloud advertising continues to be the largest segment of the cloud services market, comprising 48 per cent of the total market in 2012. Gartner predicts that from 2013 through 2016, \$677 billion will be spent on cloud services worldwide, \$310 billion of which will be spent on cloud advertising.

"The continued growth of the cloud services market will result from the adoption of cloud services for production systems and workloads, in addition to the development and testing scenarios that have led as the most prominent use case for public cloud services to date," said Ed Anderson, research director at Gartner. "Evidence of this growth is found in the increasing demand for cloud services from end-user organisations, met by an increased supply of cloud services from suppliers."

Although there is wide variation between cloud services market subsegments, strong demand is anticipated for all types of cloud services offerings. The cloud business process services segment (BPaaS) is the second-largest market segment after cloud advertising, comprising 28 per cent of the total market in 2012, followed by cloud application services (software as a service [SaaS]) at 14.7 per cent, cloud system infrastructure services (IaaS) at 5.5 per cent, cloud management and security services at 2.8 per cent, and cloud application infrastructure services (platform as a service [PaaS]) at one per cent.

Market dynamics vary substantially when considering the cloud services market size and market growth across the different regions of the world. In general, the emerging markets in Asia/Pacific, Latin America, Eastern Europe, the Middle East and North Africa show the highest growth rates, while representing the smallest overall markets. China is the exception, being both a large and growing market. Likewise, the mature markets of North America, Western Europe, Japan and the mature Asia/Pacific countries constitute the larger, but slower-growth, markets.

"Although forecast growth is generally high across all regions, the adoption of cloud services varies significantly by country. Providers should not assume that a generic strategy applied to specific countries or regions of the world will produce the same outcome when applied to other countries, even countries with similar market characteristics," said Mr Anderson. "Local economic factors, regulatory issues, the local political climate, the diverse landscape of global and local providers, including noncloud providers, and other country-specific factors ensure a unique marketplace in each country and region."

North America is the largest region in the cloud services market, accounting for 59 per cent of all new spending on cloud services from 2013 through 2016. Western Europe, despite the growth challenges in the region, remains the second-largest region and will account for 24 per cent of all new spending during the same time period. However, the highest growth rates for cloud services continue to come from the emerging regions of Emerging Asia/Pacific (led by Indonesia and India), Greater China and Latin America (led by Argentina, Mexico and Brazil).

"IT services providers, particularly those focused on delivering cloud services offerings or related services, must consider these disproportionately large mature markets if they want to play a leading role in cloud services growth worldwide," Mr Anderson said. "Similarly, markets in Emerging Asia/Pacific, Greater China and Latin America should also be important considerations for IT services providers that want to capitalise on the high growth of these regions, particularly Latin America and Greater China."
Additional information is available in the report "Forecast Overview: Public Cloud Services, Worldwide, 2011-2016, 4Q12 Update." The report is available on Gartner's web site at http://www.gartner.com/resId=2332215.

By 2016, 70 Per Cent of the Most Profitable Companies Will Manage Their Business Processes Using Real-Time Predictive Analytics or Extreme Collaboration

Tue, 26 Feb 2013 00:00:00 +0100

Seventy per cent of high-performing companies will manage their business processes using real-time predictive analytics or extreme collaboration by 2016, according to Gartner, Inc.

One of the more effective techniques for business process improvement is intelligent business operations (IBO), in which processes are "aware" of and can learn from a wide range of work interactions, their context and the situations around them. Once a situation is sensed, analytics can be applied actively or on-demand to predict the outcomes of potential changes.

"The impact of integrating real-time analytics with business operations is immediately apparent to business people because it changes the way they do their jobs," said Jim Sinur, research vice president at Gartner. "The most dramatic change is the increased visibility in how the company is running and what is happening in its external environment. Individual contributors and managers have more situational awareness, so they are able to make better decisions faster."

As a result, organisations with real-time analytic and decision management capabilities perform better. Improved situational awareness leads to better and faster decision making and superior customer service, revenue growth, cost reduction and risk avoidance. Gartner said that virtually every business operation has one or more areas where real-time analytic services or active analytics should be applied.

"It has been technically possible to implement real-time analytics in transactional and record-keeping operational applications for decades. However, few business processes or operational applications have actually used them until recently," said Mr Sinur. As the sources of business event data proliferate and business application management, complex event processing, rule management, visualisation, business process management (BPM), optimisation and other software tools improve, IBO is rapidly becoming a more practical and popular solution.

"Human or automated actions can be initiated for proper decision making to achieve the desired business outcomes. If the situation dictates, knowledge workers can collaborate in and around the process, case or instance to decide on and effect change," said Mr Sinur. "We fully expect more organisations to leverage IBO in the future, resulting in innovative differentiation and higher performance. An example is work routing based on incoming arrival rates, where the knowledge required and skills needed are dynamically matched against resources available in-house, with dynamic expansion to non-employee resources as needed."

Many organisations are finding at least one critical process that has appropriate leverage for higher performance, examples include intelligent fleet management and intelligent prescription management processes. Gartner said IBO will be a significant differentiator for high-performing companies and it promises to deliver new differentiating processes that will impact on both new and established industries.

The demand for IBO will drive an increase in intelligent technologies and the methods that surround active intelligence. This includes various combinations of event, business rules, analytics, social collaboration, dynamic processes and visualisation software, packaged to support various types of problems.

Gartner advises business process directors and solution architects in all types of organisations (if they haven't already done so), to assess their organisations' likelihood of adopting IBO for a critical or differentiating process. This will then allow them to investigate IBO-related technologies, look for opportunities to carry out an IBO proof of concept and pilot IBO on at least one process in the next two years. At the same time, it is advisable to undertake a scan of competitors to establish if they are leveraging IBO against their organisations.

For a more detailed analysis see "Predicts 2013: Business Process Improvement Leaders Need to Stop Tackling the Tactical and Get Strategic” This analysis is available on Gartner's web site at http://www.gartner.com/resId=2258215.

Worldwide Business Intelligence Software Revenue to Grow 7 Per Cent in 2013

Tue, 19 Feb 2013 00:00:00 +0100

Worldwide business intelligence (BI) software revenue will reach \$13.8 billion in 2013, a 7 per cent increase from 2012, according to Gartner, Inc. The market is forecast to reach \$17.1 billion by 2016.

"BI and analytics have grown to become the fourth-largest application software segment as end users continue to prioritise BI and information-centric projects, and spending to improve decision making and analysis," said Dan Sommer, principal research analyst at Gartner. "As more and more information is generated, business models need reinvention, and it's increasingly clear that mastering analytics on big data will be a key driver for the next economic cycle."

CIO appetite for BI is complemented by more-tactical buying in business units for departmental and workgroup analysis, as well as for personal BI, enabled by the Nexus of Forces (cloud, mobile, social and information). These are fundamental drivers. However, in the near term, growth will be hampered by sluggish macro indicators, as well as by slowing sales cycles of multimillion-dollar end-to-end BI deals. Compared with 2011 growth of 16 per cent, 2013 and the coming years are expected to be slower, with growth in the high single digits.

"Although this is a mature market and has been a top CIO priority for years, there is still a lot of unmet demand. Every company has numerous subject areas — such as HR, marketing, social and so on — that have yet to even start with BI and analytics," said Kurt Schlegel, research vice president at Gartner. "The descriptive analytics have largely been completed for most large companies in traditional subject areas, like finance and sales, but there is still a lot of growth expected for diagnostic, predictive and prescriptive deployments. Since many midsize organisations have yet to even start their BI and analytic initiatives, we expect the market for BI and analytics platforms will remain one of the fastest-growing software markets."

The emerging data-as-a-service trend could significantly grow the market for BI and analytics platforms. Today, the business model is largely "build" driven in that organisations licence software capabilities to build analytic applications. However, organisations increasingly will subscribe to industry-specific data services that bundle a narrow set of data with BI and analytic capabilities embedded. In time, most companies, regardless of their business model, will need to provide a data-as-a-service offering. Therefore, this trend has the potential to grow the market significantly as a range of vendors look to embed a BI and analytic platform provider's software capabilities into their data-as-a-service offerings.

More detailed analysis is available in the reports "Forecast Analysis: Enterprise Application Software, Worldwide, 2011-2016, 4Q12 Update" and “Magic Quadrant for Business Intelligence and
Analytics Platforms”. The reports are available on Gartner's web site at http://www.gartner.com/resId=2323315 and http://www.gartner.com/resId=2326815, respectively.

25 Per Cent of Organisations Will Have an Enterprise App Store

Tue, 12 Feb 2013 00:00:00 +0100

By 2017, 25 per cent of organisations will have an enterprise app store for managing corporate-sanctioned apps on PCs and mobile devices, according to Gartner, Inc. Enterprise app stores promise greater control over the apps used by employees, greater control over software expenditures and greater negotiating leverage with app vendors, but this greater control is only possible if the enterprise app store is widely adopted.

"Apps downloaded from public app stores for mobile devices disrupt IT security, application and procurement strategies," said Ian Finley, research vice president at Gartner. "Bring your own application (BYOA) has become as important as bring your own device (BYOD) in the development of a comprehensive mobile strategy, and the trend toward BYOA has begun to affect desktop and web applications as well. Enterprise app stores promise at least a partial solution but only if IT security, application, procurement and sourcing professionals can work together to successfully apply the app store concept to their organisations. When successful, they can increase the value delivered by the application portfolio and reduce the associated risks, license fees and administration expenses."

Gartner has identified three key enterprise app store trends and recommendations of how organisations can benefit from them:

The increasing number of enterprise mobile devices and the adoption of mobile device management (MDM) by organisations will drive demand and adoption of enterprise app stores.
Businesses already have numerous choices for downloading software onto PCs, but most of them don't include support for smartphones and tablets. Organisations are beginning to formalise more standard support for these devices, and are looking for ways to manage mobile application provision, especially as they develop their own in-house apps to extend more complex data to these devices.

"Many businesses have looked to MDM vendors to provide these capabilities as part of the suite of services that MDM providers are selling," said Phillip Redman, research vice president at Gartner. "Today, most MDM providers have a simple way of extending apps to mobile devices, usually through a basic agent on the device, but many are launching more-sophisticated app stores that can host enterprise and third-party apps to be accessed by smartphones, tablets and PCs. The development of mobile apps and the support of MDM will drive most enterprise app store implementations during the next 12 to 18 months."

Organisations begin by assessing the realistic need for immediate adoption of enterprise app stores and looking for providers that offer cross-platform support for web, PC and mobile apps, as well as for different devices. App stores should be part of an MDM bundle of features and should be purchased along with a full mobile management solution.

Enterprise app stores can support a more diverse and competitive automated software process requiring less procurement intervention.

The enterprise app store offers a way to automate the procurement of enterprise software licenses from app stores under corporate control as part of the normal requisitioning process. By delegating choice to end users, organisations can delegate many important price and performance decisions down to the end-user level, enabling them to make the best choice to meet their needs with the knowledge that the cost will require management approval and/or chargeback to their business unit.

"Enterprise app stores enable procurement to broaden user choice by encouraging providers to submit competing apps, and to monitor demand for popular apps that may benefit from better negotiation of license terms and prices," said Stewart Buchanan, research vice president at Gartner.

The long-term success of an enterprise app store hinges on a dramatic increase in the supply of software solutions.

Few companies are still in the position to control their entire mobile value chain. Enterprise IT organisations should be transitioning from the traditional approach of selecting devices and software for users and instead, establishing transparent and enforced app curation policies — as is currently found in public app stores.

This shift in control will be challenging for many IT organisations. But even more profound will be the enablement of choice. Without a dynamic selection of apps to choose from, users will eventually have little reason to continue to visit an enterprise app store. An app store can be a natural way to share new applications within the organisation, recognise great applications, provide feedback to development teams and even create a bit of competition between them — all to drive the development of better solutions. A dramatic increase in the app options available to internal stakeholders is a precondition of any successful enterprise app store.

"The implementation of an enterprise app store should be seen as a component of an organisation's application strategy, rather than infrastructure strategy," said Brian Prentice, research vice president at Gartner. "The primary determinant of success is app supply. As a result, application leaders should be given overall responsibility for any app store initiative, but they should work in a collaborative fashion with other teams. The types of apps downloaded and used provide important information as to what types of solutions are of value to each type of user."

More detailed analysis is available in the report "Enterprise App Stores Can Increase the ROI of the App Portfolio" The report is available on Gartner's web site at http://www.gartner.com/resId=2325115.

the Convergence of Social, Information, Mobile and Cloud Will Impact Sourcing Strategies in 2013

Mon, 28 Jan 2013 00:00:00 +0100

Sourcing managers must consider the opportunities and risks presented by the convergence of social, information, mobile and cloud when re-evaluating sourcing options, delivery models and vendors, according to Gartner, Inc.

"Social, information, mobile and cloud shouldn't be considered in isolation as market forces," said Linda Cohen, vice president and distinguished analyst at Gartner. "The convergence of these forces, which Gartner calls the Nexus of Forces, is what drives real business value. The Nexus of Forces converge in several ways: cloud, mobile and social solutions enable the distribution of information, social media usage and behaviour drive mobile and information solutions, and cloud can be a foundation for information, social and mobile solutions."

"To establish the most appropriate sourcing approach for 2013, sourcing managers must take a more holistic approach and understand wider IT service market trends," said Frank Ridder, research vice president at Gartner. "To benefit, sourcing managers must consider the influence of the convergence of the Nexus of Forces on the services sourcing life cycle of activities, rather than considering each factor as a separate trend."

Gartner has identified the following key impacts for sourcing managers to consider:

Growing cloud adoption will force sourcing managers to reconsider sourcing governance techniques and contracting practices
More than half of the respondents in a public cloud survey conducted by Gartner in 2012 said they would likely or definitely consider a model based on public cloud for applications and that they intend to upgrade, replace or modernise over the next two years. However, IT organisations adopting public cloud models will need to strengthen the skills that will help them manage a hybrid IT services model successfully. These include strong service integration capabilities because cloud services are often added to a traditionally managed and highly customised environment, which creates a hybrid IT environment composed of various solution types.

Revised mobile strategies, such as bring your own device (BYOD) and mobile applications availability, will expand IT service sourcing requirements as users demand new services
The rising impact of consumerisation means that user demand will increase for new and updated IT services. This is especially apparent in mobility services, which providers often include as part of their desktop outsourcing service portfolios. These services typically include mobile device ordering and provisioning, asset management and disposal and, in some cases, mobility service management. In addition, technically savvy and younger users are demanding more productivity applications on their mobile devices to expand desktop front-end capabilities and performance. This demand requires a dramatic change in bundled mobility services. IT organisations now need to offer mobility management services that go beyond a single device to include an ever-increasing variety of devices and application deployment and management. In turn they need security, controlled data access and, in many cases, user support. End-user efficiency will be directly affected by sourcing and service delivery strategies supporting mobility.

New information channels, coupled with data management and reliability issues, will make sourcing options analysis and vendor evaluations more complicated and more critical
Information has always been an important asset for businesses and government organisations, but new challenges arise as information, management, architecture and sourcing strategies become more interdependent. Organisations are now faced with issues concerning information reliability, information channels and information volume. IT services and sourcing managers should consider both sides of this trend by taking advantage of related opportunities, such as having increased access to information when selecting a service provider and the ability to use new collaboration channels to share information with service providers. They should also investigate the potential of procuring information in a service model (rather than using providers only in the traditional manner), to develop information repositories and manage data.

Social technologies will change the way that sourcing organisations interact with suppliers and customers, from requirements definition, through contract negotiation and vendor performance evaluation
Employees are using more social software and social networking sites for business purposes. Using social technology for collaboration in complex outsourcing relationships can increase efficiency, but sourcing organisations should also consider its nontechnical aspects. Through social networks, end users unlock many information channels. Buyers can now gather information and opinions about IT products and service vendors from multiple sources, for example, online user groups, social networks or from peer group forums.

Social media also presents a new means of accessing talent for application development projects, as well as the potential for areas of product support. Some IT organisations are adopting crowdsourcing as an alternative to global sourcing and other labour arbitrage strategies. If IT organisations can determine what work is appropriate in which environment, and allow for the freedom inherent in this delivery option, the speed and cost of crowdsourcing will start to become a driving force for increased adoption in many IT services sourcing portfolios.

More detailed analysis is available in the report "Outsourcing Trends 2013: The Impact of Social, Information, Mobile and Cloud on Your Sourcing Strategies." The report is available on Gartner's web site at http://www.gartner.com/resId=2301916.

Gartner Executive Program Survey of More Than 2,000 CIOs Shows Digital Technologies Are Top Priorities in 2013

Wed, 16 Jan 2013 00:00:00 +0100

Organisations realise on average only 43 per cent of technology's business potential, according to a global survey of CIOs by Gartner, Inc.'s Executive Programs. That number has to grow for IT to remain relevant in an increasingly digital world.

The worldwide survey was conducted in the fourth quarter in 2012 and included 2,053 CIOs, representing more than \$230 billion in CIO IT budgets and covering 36 industries in 41 countries. The Gartner Executive Programs report, "Hunting and Harvesting in a Digital World: The 2013 CIO Agenda," represents the world's most comprehensive examination of business priorities and CIO strategies.

Over the last 18 months, digital technologies — including mobile, analytics, big data, social and cloud — have reached a tipping point with business executives. Analysts said there is no choice but to increase technology's potential in the organisation, and this means evolving IT's strategies, priorities and plans beyond tending to the usual concerns as CIOs expect their 2013 IT budgets to be essentially flat for fifth straight year.

"Digital technologies provide a platform to achieve results, but only if CIOs adopt new roles and behaviours to find digital value," said Mark McDonald, group vice president and Gartner Fellow. "CIOs require a new agenda that incorporates hunting for new digital innovations and opportunities, and harvesting value from products, services and operations.

"In a world of change, it is concerning that around half of CIOs surveyed do not see IT's enterprise role changing over the next three years," Mr McDonald said. "IT needs new tools if it hopes to hunt for technology-intensive innovation and harvest raised business performance from transformed IT infrastructure, operations and applications. Without change, CIOs and IT consign themselves to tending a garden of legacy assets and responsibilities."

The survey showed that CIO IT budgets have been flat to negative ever since the dot-com bust of 2002. For 2013, CIO IT budgets are projected to be slightly down, with a weighted global average decline of 0.5 per cent. EMEA is the only region to show slight growth of 0.4 per cent in 2013. “While most CIO IT budgets in Western Countries are expected to be flat or negative, German CIOs are the most pessimistic with an estimate of 2 per cent decline in their IT budgets in 2013,” said Dave Aron, vice president and Gartner Fellow.

Digital technologies dominate CIO technology priorities for 2013. The top 10 global technology priorities revealed by the survey reflect a greater emphasis on externally oriented digital technologies, as opposed to traditional IT/operationally oriented systems (see Table 1).

Table 1

Top 10 CIO Business and Technology Priorities in 2013

Top 10 Business Priorities		Top 10 Technology Priorities
Increasing enterprise growth	1	Analytics and business intelligence	1
Delivering operational results	2	Mobile technologies	2
Reducing enterprise costs	3	Cloud computing (SaaS, IaaS, PaaS)	3
Attracting and retaining new customers	4	Collaboration technologies (workflow)	4
Improving IT applications and infrastructure	5	Legacy modernisation	5
Creating new products and services (innovation)	6	IT management	6
Improving efficiency	7	CRM	7
Attracting and retaining the workforce	8	Virtualisation	8
Implementing analytics and big data	9	Security	9
Expanding into new markets and geographies	10	ERP Applications	10

SaaS = software as a service; IaaS = infrastructure as a service; PaaS = platform as a service

Source: Gartner Executive Programs (January 2013)

CIOs see these technologies as disrupting business fundamentally over the next 10 years. When asked which digital technologies would be most disruptive, 70 per cent of CIOs cited mobile technologies, followed by big data/analytics at 55 per cent, social media at 54 per cent and public cloud at 51 per cent. The disruptiveness of each of these technologies is real, but CIOs see their greatest disruptive power coming in combination, rather than in isolation.

"As CIOs continue to amplify the organisation with digital technologies while improving IT organisational structure, management and governance, 2013 promises to be a year of dual priorities," said Mr Aron. "Key CIO strategies identified in the survey reflect the realities of these dual business priorities and confirm the need to expand IT's ability to hunt for new opportunities and harvest current business value. While CIOs recognise that IT's value contribution comes from delivering business solutions, they also recognise that the prioritisation and delivery of specific results must change."

As needs and opportunities evolve, more CIOs will find themselves leading in areas outside of traditional IT. In addition to their tending role, they are starting to assume responsibility for hunting for digital opportunities and harvesting value. Sixty-seven per cent of CIOs surveyed have significant leadership responsibilities outside of IT, with only 33 per cent having no other such responsibilities. This situation contrasts sharply with 2008, when almost half of CIOs had no responsibilities outside of IT. Almost a fifth of CIOs now act as their enterprise's chief digital officer (CDO), leading digital commerce and channels. Although this nascent role varies in scope and style, it normally includes championing the digital vision for the business — that is, ensuring that the business is evolving optimally in the new digital context.

"IT cannot expect to secure additional funding without assuming new responsibilities or producing new results," said Mr Aron. "Reacting to limited budgets by restructuring costs, outsourcing and doing more with less made sense from 2002 to 2011, when the supply of innovative technologies was scarce. Adapting to, and leading, in the digital world requires doing things differently, yet in ways consistent with the demands of digital technologies. CIOs need to make the case that mainstream emerging mobile, big data, social and cloud technologies justify revisiting IT budget and investment levels."

"CIOs knew that doing the right thing required tending to IT by delivering cost-effective quality services. CIOs and IT leaders managed cost, complexity and risk to enable business operations in a world of managed stability," Mr McDonald said. "However, the world outside IT changed creating a quiet crisis for IT. Demands have increased in a world grown dynamic and digital. The harder CIOs work tended to current concerns, the less relevant IT became. CIOs know that the future rests in not repeating the past but in extending IT by hunting and harvesting in a digital world."

More-detailed analysis on the CIO agenda for 2013 will be presented in two webinars. During these webinars, Mr McDonald and Mr Aron will outline the results from the 2013 CIO agenda survey and the top business and technology priorities for CIOs. The "Agenda 2013 — Implications for High-Tech Providers" webinar will be hosted on 5 February at 4:00pm UK time. To register for this complimentary webinar, please visit http://my.gartner.com/webinardetail/resId=2299616. The webinar "New Priorities, Technologies and Leaders Shaping the Future of IT" will be hosted by Gartner on 21 February at 3:00pm UK time. To register for this webinar, please visit http://my.gartner.com/webinardetail/resId=2299617.

Global PC Shipments Declined 4.9 Percent in Fourth Quarter While EMEA PC Shipments Declined 9.6 Percent

Mon, 14 Jan 2013 00:00:00 +0100

Worldwide PC shipments totaled 90.3 million units in the fourth quarter of 2012, a 4.9 percent decline from the fourth quarter of 2011, according to preliminary results by Gartner, Inc. Analysts said the PC industry’s problems point to something beyond a weak economy.

“Tablets have dramatically changed the device landscape for PCs, not so much by ‘cannibalizing’ PC sales, but by causing PC users to shift consumption to tablets rather than replacing older PCs,” said Mikako Kitagawa, principal analyst at Gartner. “Whereas as once we imagined a world in which individual users would have both a PC and a tablet as personal devices, we increasingly suspect that most individuals will shift consumption activity to a personal tablet, and perform creative and administrative tasks on a shared PC. There will be some individuals who retain both, but we believe they will be exception and not the norm. Therefore, we hypothesize that buyers will not replace secondary PCs in the household, instead allowing them to age out and shifting consumption to a tablet.”

“This transformation was triggered by the availability of compelling low-cost tablets in 2012, and will continue until the installed base of PCs declines to accommodate tablets as the primary consumption device,” Ms. Kitagawa said. “On the positive side for vendors, the disenfranchised PCs are those with lighter configurations, which mean that we should see an increase in PC average selling prices (ASPs) as users replace machines used for richer applications, rather than for consumption.”

During the holiday season, consumers no longer viewed PCs as the number one gift item. Given a burgeoning variety of increasingly more attractive devices and services, consumers directed their attention elsewhere. Analysts said there was uptake of very low priced notebooks as a part of mega holiday deals, but this uptake did little to boost holiday PC sales.

The launch of Microsoft’s Windows 8 did not have a significant impact on PC shipments in the fourth quarter. Analysts said some PC vendors offered somewhat lackluster form factors in their Windows 8 offerings and missed the excitement of touch. New products are coming to market, and this could drive churn within the installed base.

HP regained the top position in worldwide PC shipments in the fourth quarter of 2012 (download tables below), however the company’s shipments did not grow compared to a year ago. Analysts said HP most likely gave up a certain margin level to gain market shares. HP was successful in managing large retail deals targeting Microsoft’s Windows 8 launch and holiday sales in selected regions.

Lenovo dropped to the No. 2 position in the fourth quarter of 2012, but it experienced the best growth rate (8.2 percent) among the top five PC vendors worldwide. Lenovo’s growth exceeded regional growth rates in North America, EMEA and Asia/Pacific, but lower than the industry average in Latin America and Japan. In North America, Lenovo performed well by expanding in the retail market and protecting professional market.

In the U.S., PC shipments totaled 17.5million units in the fourth quarter of 2012, a 2.1 percent decline from the fourth quarter of 2011 (download tables below). Due to the tight inventory control and preparation for the Windows 8 launch, most PC vendors were able to ship Windows 8 PCs to the retail space. However, PC sell-through was rather weak which leaves some level of inventory concerns for vendors in the consumer market.

“Consumer’s holiday spending went into other products and services, and U.S. holiday sales became less important for PC sales. For professionals, the fourth quarter is typically a good sales season because of last minutes PC purchases before the tax year-end. Our early research indicates that there was good growth in professional PC sales,” Ms. Kitagawa said.

PC shipments in EMEA totaled 28.1 million units in the fourth quarter of 2012, a 9.6 percent decrease from the fourth quarter of 2011 (download tables below). Western Europe remained the weak point across EMEA, as Central and Eastern Europe and the Middle East and Africa saw growth quarter-on-quarter.

“The PC market continues to face many headwinds. The launch of Windows 8 had no impact on PC demand, especially as Ultramobile products were both limited in supply, as well as being priced too high,” said Ranjit Atwal, research director at Gartner. “The holiday season mostly saw retailers clearing Windows 7 notebook inventory or driving volume of low-end notebooks. Furthermore, the increasing choice of tablets at decreasing price points no doubt became a favorite Christmas present ahead of PCs.”

“In the fourth quarter of 2012, mobile PC shipments decreased 11 percent while desktop PC shipments declined 6 percent year-on-year,” said Isabelle Durand, principal research analyst at Gartner. “However, all-in-one form factor models from Asus, Lenovo and HP look like a promising platform for the future.”

HP retained the No. 1 position in the fourth quarter of 2012, thanks to good results across all products in the professional PC segment. Dell performed weakly, losing nearly 2 percent share in the fourth quarter of 2012. Among the top five vendors, only Lenovo showed year-on-year growth and its strong performance in the quarter helped it displace Acer from the No. 2 position.

In the second half of 2012, the EMEA PC market experienced two consecutive quarters of decline, resulting in overall shipments for 2012 declining 2.8 percent from 2011. Western Europe lost another 10 percent of volume, indicating likely structural changes to the market rather than weak demand.

PC shipments in Asia/Pacific totaled 29.9 million units in the fourth quarter of 2012, a 1.8 percent decline from the fourth quarter of 2011. Vendors struggled to offer compelling products to convince buyers to upgrade and attract new buyers as consumers' interest continues to be on smartphones and tablets. The introduction of Windows 8 met with lukewarm response and availability was primarily on the higher-end models, which were priced beyond the mainstream price point for volume sales.

For the year, PC shipments were 352.7 million units, a 3.5 percent decline from 2011 (download tables below). HP retained the top spot in the global PC market, accounting for 16 percent of the market. Lenovo was the No. 2 vendor with 14.8 percent market share. Asus showed the strongest growth among the top five vendors, with shipments increasing 17.1 percent.

These results are preliminary. Final statistics will be available soon to clients of Gartner's PC Quarterly Statistics Worldwide by Region program. This program offers a comprehensive and timely picture of the worldwide PC market, allowing product planning, distribution, marketing and sales organizations to keep abreast of key issues and their future implications around the globe.

30 Per Cent of Businesses Will Be Monetising Their Information Assets Directly by 2016

Thu, 10 Jan 2013 00:00:00 +0100

The financial demands of storing and managing big data will lead 30 per cent of businesses to directly or indirectly monetise their information assets by trading, bartering or outright selling them by 2016, according to Gartner, Inc. Many enterprises are starting to appreciate the real market value that their harvested information assets have within their own industries or beyond. However, the lack of expertise in handling big data and developing information products will create an opportunity for the growth of specialist intermediaries, acting as information brokers or resellers.

"The need to justify the expense of accumulating and managing huge volumes of data has led many organisations to consider monetising or productising their information assets," said Doug Laney, research vice president at Gartner. "For example, several retailers are already generating millions of dollars per year in incremental revenue by placing online their point-of-sale and other data for business partners to subscribe to. Other individuals have launched ventures packaging and reselling publicly available data, or using it to launch new information-based products — such as in the insurance and financial markets."

Since many businesses are ill-equipped to develop and introduce information-based products, "information resellers" will arise to help organisations develop and execute information asset monetisation strategies. Gartner anticipates the appearance of "information product managers" to lead these efforts internally.

The new opportunities for significant information-borne income will lead makers of web-connected products to ensure their offerings collect as much usage, location and system data as possible. To assist in these efforts, Gartner, as part of its "infonomics" research, has developed valuation models that help organizations gauge the potential and realized economic value of their information assets.

"Consumers and businesses must recognise that their personal usage, location, profile and activity data has a tangible market value. They should guard it and ensure that when they do share it they receive ample services, products or cash for it," said Mr Laney. "Businesses monetising information assets need to be sensitive to the reputational risk of public backlash against such practices, that may in turn lead to a tighter regulatory environment." Recently, for example, the Federal Trade Commission issued subpoenas to major information brokers to disclose how they collect, use and protect personal information.

One issue arising from the trend toward monetising information assets is that traditional database management system and business intelligence products and implementations are not well-suited to sharing data in a subscription-based manner. The implication is that new forms of the technology are emerging — focusing on cloud-based implementations that enable subscriber-based access and restricted access to segments of data. "A nascent crop of shared information hosting services already complements established syndicated data providers, and most vendors have taken steps to cloud-enable their technologies," concluded Mr Laney.

About Gartner Business Intelligence & Analytics Summit 2013
The Gartner Business Intelligence (BI) & Analytics Summit is specifically designed to drive organisations toward analytics excellence, by exploring the latest trends in BI and analytics and examining how the two disciplines relate to one another. Gartner analysts will discuss how the Nexus of Forces will impact BI and analytics, and share best practices for developing and managing successful mobile BI, analytics and master data management initiatives. More information is available at http://www.gartner.com.

About Gartner Master Data Management Summit 2013
The Gartner Master Data Management (MDM) Summit is specifically designed to drive organisations of all MDM maturity levels toward realising these benefits: from those just getting started with MDM, to those looking to move up the maturity curve, to those seeking advanced insight on the future of master data. At the Summit, Gartner analysts will help organisations establish a solid justification for MDM and identify where and how MDM can increase service levels, drive growth and fuel transformation in the organisation. Additional details are available at http://www.gartner.com.

Worldwide IT Spending Forecast to Reach \$3.7 Trillion in 2013

Thu, 03 Jan 2013 00:00:00 +0100

Worldwide IT spending is projected to total \$3.7 trillion in 2013, a 4.2 per cent increase from 2012 spending of \$3.6 trillion, according to the latest forecast by Gartner, Inc. The 2013 outlook for IT spending growth in US dollars has been revised upward from 3.8 per cent in the 3Q12 forecast.

Gartner analysts said much of this spending increase is the result from projected gains in the value of foreign currencies versus the dollar. When measured in constant dollars, 2013 spending growth is forecast to be 3.9 per cent.

The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets. For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognise market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork.

"Uncertainties surrounding prospects for an upturn in global economic growth are the major retardants to IT growth," said Richard Gordon, managing vice president at Gartner. "This uncertainty has caused the pessimistic business and consumer sentiment throughout the world. However, much of this uncertainty is nearing resolution, and as it does, we look for accelerated spending growth in 2013 compared to 2012."

Worldwide devices spending which includes PCs, tablets, mobile phones and printers, is forecast to reach \$666 billion in 2013, up 6.3 per cent from 2012 (see Table 1). However, this is a significant reduction in the outlook for 2013 compared with Gartner's previous forecast of \$706 billion in worldwide devices and 7.9 per cent growth. The long-term forecast for worldwide spending on devices has been reduced as well, with growth from 2012 through 2016 now expected to average 4.5 per cent annually in current US dollars (down from 6.4 per cent) and 5.1 per cent annually in constant dollars (down from 7.4 per cent). These reductions reflect a sharp reduction in the forecast growth in spending on PCs and tablets that is only partially offset by marginal increases in forecast growth in spending on mobile phones and printers.

"The tablet market has seen greater price competition from android devices as well as smaller, low-priced devices in emerging markets," Mr Gordon said. "It is ultimately this shift toward relatively lower-priced tablets that lowers our average selling prices forecast for 2012 through 2016, which in turn is responsible for slowing device spending growth in general, and PC and tablet spending growth in particular."

Table 1. Worldwide IT Spending Forecast (Billions of US Dollars)

	2012 Spending	2012 Growth	2013 Spending	2013 Growth
Devices	627	2.9%	666	6.3%
Data Centre Systems	141	2.3%	147	4.5%
Enterprise Software	278	3.3%	296	6.4%
IT Services	881	1.8%	927	5.2%
Telecom Services	1,661	-0.1%	1,701	2.4%
Overall IT	3,588	1.2%	3,737	4.2%

Worldwide enterprise software spending is forecast to total \$296 billion in 2013, a 6.4 per cent increase from 2012. This segment will be driven by key markets such as security, storage management and customer relationship management; however, beginning in 2014, markets aligned to big data and other information management initiatives, such as enterprise content management, data integration tools, and data quality tools will begin to see increased levels of investment.

The global telecom services market continues to be the largest IT spending market. Gartner analysts predict that growth will be predominately flat over the next several years as revenue from mobile data services compensates for the declines in total spending for both the fixed and mobile voice services markets. By 2016, Gartner forecasts that mobile data will represent 33 per cent of the total telecom services market, up from 22 per cent in 2012.

More-detailed analysis on the outlook for the IT industry will be presented in the webinar "Gartner Worldwide IT Spending Forecast, 4Q12 Update — 2013 The Year Ahead." The complimentary webinar will be hosted by Gartner on 8 January 8 at 6:00pm UK time. During the webinar, Gartner analysts will outline IT spending expectations for 2013. To register for the webinar, please visit http://my.gartner.com/.

Gartner's IT spending forecast methodology relies heavily on rigorous analysis of the sales by thousands of vendors across the entire range of IT product and services. Gartner uses primary research techniques, complemented by secondary research sources, to build a comprehensive database of market size data upon which to base its forecast. The Gartner quarterly IT spending forecast delivers a unique perspective on IT spending across hardware, software, IT services and telecommunications segments. These reports help Gartner clients understand market opportunities and challenges. The most recent IT spending forecast research is available at http://www.gartner.com/. This Quarterly IT Spending Forecast section includes links to the latest IT spending reports, webinars, blog posts and press releases.

Gartner Identifies Top Vertical Industry Predictions for IT Organisations for 2013 and Beyond

Wed, 19 Dec 2012 00:00:00 +0100

Gartner, Inc. has revealed its top industry predictions for IT organisations and users for 2013 and beyond. Analysts said that social networking, mobile communications, the cloud and information are pressuring enterprises worldwide to make fundamental changes in business processes and that industry decision-makers should use Gartner's predictions to understand and respond to this Nexus of Forces.

Gartner's annual Predicts research on industry trends titled "Top Industry Predicts 2013: The Nexus of Forces Will Drive Massive Transformation in Many Industries," features 14 strategic planning assumptions that CIOs, senior business executives and IT leaders should factor into their enterprise planning and strategy-setting initiatives. The report is available on the Gartner Predicts 2013 website, www.gartner.com/predicts.

"Most industries will face massive changes during the period from 2013 through 2015. These changes will force fundamental shifts in business processes that will, in turn, further reshape those industries," said Kimberly Harris-Ferrante, vice president and distinguished analyst at Gartner. "The social commons, mobile communications, cloud computing and information will be especially important factors in driving even greater industry transformation, challenging existing business models and processes and opening up greater competitive and other threats."

CIOs and other IT and business leaders can use Gartner's predictions and recommendations to better understand the forces that are changing their world and develop strategies to address the requirements of a fast-changing business environment. The top industry predictions include:

By 2016, three automakers will have announced concrete plans for upcoming automobile launches that will offer autonomous vehicle technology.
By 2015, nontraditional money creation and exchange will enable 125 million more people to participate in the mainstream global economy.
By 2016, patients will be harmed or placed at risk by a medical device security breach.
By 2016, national governments will require institutions to surrender student records for a redesigned, cost-cutting curriculum based on big data analysis.
By 2015, natural-language processing (NLP) use among large healthcare delivery organisations (HDOs) in English-speaking countries will quintuple, fuelled by documentation, coding, quality reporting and research.
By 2015, to avoid becoming simply transaction factories, successful payer organisations will turn to information integration as their competitive differentiator.
By 2016, half of U.S. utility customers will have access to standardised energy usage data, but only 20 per cent will use it.
By year end 2014, pay-as-you-drive insurance will rise significantly to account for 10 per cent of overall annual auto insurance premiums.
By 2017, more than 50 per cent of the media sold to advertisers by agencies will be priced based on performance.
By 2014, less than 2 per cent of consumers globally will adopt Near Field Communication (NFC)-based mobile payments.
More than 50 per cent of government shared-service organisations that provide cloud services by 2015 will discontinue or downscale them by 2017.
By 2015, 50 per cent of Tier 1 consumer goods manufacturers will invest in technology start-ups to maintain access to emerging business-to-consumer (B2C) technology.
Through 2014 enterprise software spend will increase by 25 per cent from current figures as a consequence of the proliferation of smart operational technology (OT).
By 2016, at least 25 per cent of discrete manufacturers will adopt 3D printing to produce parts for products they sell or service.

"Many of the Nexus of Forces direct and indirect impacts, such as the need to respond to the pervasiveness of social networking and the mobile-device-driven consumerisation of IT, are being felt across virtually all industries," said Ms. Harris-Ferrante. "Others, including intensifying regulatory requirements, resulting in part from increasing reliance on cloud computing and other 'open' IT delivery models, are industry-specific. But all these forces, and the changes in business processes they demand, present enterprise IT and business decision-makers with an extraordinarily difficult set of choices in the years to come."

Additional information is in the Gartner Predicts Special Report that is available on Gartner's website at www.gartner.com/predicts.

Three Security Hurdles to Overcome When Shifting From Enterprise-Owned Devices to BYOD

Tue, 04 Dec 2012 00:00:00 +0100

Seventy per cent of respondents in a recent survey by Gartner, Inc. said that they have or are planning to have "bring your own device" (BYOD) policies within the next 12 months to allow employees to use personal mobile devices to connect to enterprise applications. Thirty-three per cent of all organisations surveyed currently have BYOD policies in place for mobile devices, such as smartphones and tablets.

“Shifting from an enterprise-owned mobile device fleet to having employees bringing their own devices has a major impact on the way of thinking and acting about mobile security,” said Dionisio Zumerle, principal research analyst at Gartner. “Policies and tools initially put in place to deal with mobile devices offering consumer-grade security must be revised to deal with these devices being under the ultimate control of a private user, rather than the organisation.”

Gartner said that organisations must consider and take action on three major impacts when moving to a BYOD policy:

Impact 1 - The right of users to leverage the capabilities of their personal devices conflicts with enterprise mobile security policies and increases the risk of data leakage and the exploiting of vulnerabilities.
Outside the organisation's premises, employees may define their own usage policy for personal devices. Users can, therefore, install apps and visit URLs of their choice, whereas enterprises can limit applications and web access on enterprise-owned devices. Users can also decide the level of protection for their personally owned devices. When enterprise data is allowed on these devices, the risk of leakage increases for the organisation, not just because of the rise of mobile malware, but also because legitimate but unsupported apps may inadvertently create security risks for the organization and, most importantly, because of device loss.

Using mobile device management (MDM) software is one way to enforce policy on mobile devices. Users should obtain access to enterprise information only after having accepted an MDM agent on their personal devices, and possibly a URL filtering tool, such as a cloud-based secure web gateway (SWG) service, to safeguard and enforce enterprise policy on Internet traffic. Businesses should consider using application white listing, blacklisting and containerisation, as well as setting up an enterprise app store, or app catalogue, for apps that are supported.

Impact 2 - User freedom of choice of device and the proliferation of devices with inadequate security make it difficult to properly secure certain devices, as well as keep track of vulnerabilities and updates.
Allowing users, rather than the IT department, to select operating systems (OS) and versions of mobile devices opens the door to devices that are inadequate from a security standpoint. An essential security baseline should require enhanced password controls, lock timeout period enforcement, lock device after password retry limit, data encryption, remote lock and/or wipe. The enterprise mobility baseline must also express minimum requirements on hardware — OS versions will not be sufficient.

In alignment with the mobile security policy, network access control policies should be used — for example, to deny access to enterprise resources such as email and apps from devices that cannot support the security baseline. Preventive action should be taken to ban noncompliant devices or create an alert for them by using tools such as MDM software.

Nevertheless, excessively limiting the types of allowed devices eliminates the benefits of BYOD for users. There should be no compromise of security for the sake of device variety, but where it is possible to manage and secure a new device model, it should be done. The policies that are enforced will depend on the risk appetite of the organisation and the sensitivity of data allowed to reside on the device.

Impact 3 - The user's ownership of device and data raises privacy concerns and stands in the way of taking corrective action for compromised devices.
Most people consider data on their personal devices as their property, and would strongly object to having it manipulated by the organisation without their explicit consent. When shifting from enterprise to user-owned devices, "remote wipe," which is a fundamental security feature in a mobile security policy, becomes complicated from a legal and cultural point of view. Thus, sufficient attention should be paid to this issue to avoid repercussions. In practice, "selective wipe" is proving to be difficult in ensuring that all business data, and only business data, has been deleted from the device.

In this situation, it is recommended to liaise with the legal department to obtain advice, because there may be legal implications related to device wiping. Problems may arise if the user refuses a remote wipe. Time is of the essence when performing this task, and asking the user for permission after the compromise, when a remote wipe is considered necessary, will be impacted by message exchange delays that can be critical. It is therefore advisable to obtain the explicit, written consent of users to delete their data in case of compromises, or the loss or theft of devices, at the time of the user's initiation to the BYOD programme.

Additional information is available in the report "Three Crucial Security Hurdles to Overcome When Shifting From Enterprise-Owned Devices to BYOD". The report is available on Gartner's web site at http://www.gartner.com/resId=2237715.

71 Per Cent of Respondents Using SaaS for Less Than Three Years

Wed, 28 Nov 2012 00:00:00 +0100

Adoption of software as a service (SaaS) has grown dramatically among users of enterprise software solutions, but it varies widely within markets, according to Gartner, Inc. A recent Gartner survey showed 71 per cent of organisations have been using SaaS for less than three years.

In June and July of 2012, Gartner conducted a survey of 556 organisations across 10 countries and within four regions (North and South America, Europe and Asia/Pacific) to understand the trend in the movement to SaaS from traditional software license models and to gain insight into how and where software budgets were being spent.

The results indicate that interest in the SaaS deployment model remains strong and continues to expand with late adopters. Brazil had the largest number of new users, with 27 per cent of respondents using SaaS for less than one year.

Implementing net new solutions or replacing existing solutions is now the primary driver for using SaaS, according to the survey. Worldwide, there is a shift in SaaS adoption from primarily extensions to existing applications to net new deployments or replacements of existing on-premises applications.

"Although approximately half of respondents in Asia/Pacific indicated the primary adoption driver of SaaS was net new deployments, the US and European respondents indicated their strongest driver was to replace existing on-premises applications," said Charles Eschinger, research vice president at Gartner. "It's not surprising that SaaS is being deployed as net new deployments in Asia/Pacific since many of the users are relatively new businesses with few legacy systems. Markets, such as the US and EMEA are mature with existing enterprise systems and are beginning to use SaaS as a replacement for legacy applications."

According to the survey, investments in SaaS are expected to increase across all regions. Seventy-seven per cent of respondents expected to increase spending on SaaS, while 17 per cent plan to keep spending the same. More than 80 per cent of respondents in Brazil and Asia/Pacific indicated more spending on SaaS applications over the next two years. The US and European countries were not far behind with 73 per cent of US respondents and 71 per cent of European respondents intending to increase spending on SaaS.

"Seeing such high intent to increase spending isn't a huge surprise as the adoption of the on-demand deployment model has grown for more than a decade, but its popularity has increased significantly within the past five years," said Mr Eschinger. "Initial concerns about security, response time and service availability have diminished for many organisations as SaaS business and computing models have matured and adoption has become more widespread."

Respondents picked customer relationship management (CRM) and enterprise content management (ECM) as the applications most often being newly deployed. Supply chain management (SCM), web conferencing, teaming platforms and social were the applications picked most as replacements for on-premises solutions.

"The decision to deploy SaaS-based applications within an organisation is dependent on the business-criticality of the solution, as well as geography, business agility, usage scenario and IT architecture. Few organisations will completely migrate to SaaS. These organisations will live with a mix of SaaS and traditional on-premises application deployment models with a focus on integration and migration between different deployment models," said Mr Eschinger.

Additional information is available in the Gartner report "Survey Analysis: Buyers Tell Us About SaaS and Cloud Adoption Through 2014." The report is available on Gartner's web site at http://www.gartner.com/resId=2198515.

80 Per Cent of Current Gamified Applications Will Fail to Meet Business Objectives Primarily Due to Poor Design

Tue, 27 Nov 2012 00:00:00 +0100

As gamification moves from the leading edge to more widespread use by early adopters, now is the time to understand and evaluate this important trend, according to Gartner, Inc.

Gamification is currently being driven by novelty and hype. Gartner predicts that by 2014, 80 per cent of current gamified applications will fail to meet business objectives primarily because of poor design.

“The challenge facing project managers and sponsors responsible for gamification initiatives is the lack of game design talent to apply to gamification projects,” said Brian Burke, research vice president at Gartner. “Poor game design is one of the key failings of many gamified applications today.”

“The focus is on the obvious game mechanics, such as points, badges and leader boards, rather than the more subtle and more important game design elements, such as balancing competition and collaboration, or defining a meaningful game economy,” Mr Burke said. “As a result, in many cases, organisations are simply counting points, slapping meaningless badges on activities and creating gamified applications that are simply not engaging for the target audience. Some organisations are already beginning to cast off poorly designed gamified applications.”

Gamification is the use of game design and game mechanics to engage a target audience to change behaviours, learn new skills or engage in innovation. The target audience may be customers, employees or the general public, but first and foremost, they are people with needs and desires who will respond to stimuli. It is important to think of the people in these target audiences as "players" in gamified applications.

While game mechanics such as points and badges are the hallmarks of gamification, the real challenge is to design player-centric applications that focus on the motivations and rewards that truly engage players more fully. Game mechanics like points, badges and leader boards are simply the tools that implement the underlying engagement models.

Gamification describes the use of the same design techniques and game mechanics found in all games, but it applies them in non-game contexts including: customer engagement, employee performance, training and education, innovation management, personal development, sustainability and health. Virtually all areas of business could benefit from gamification as it can help to achieve three broad business objectives 1) to change behavior; 2) to develop skills; or 3) to enable innovation. While these objectives are very broad, more opportunities may emerge as the trend matures.

Changing Behaviors - The most common use of gamification is to engage a specific audience and encourage them to change a target set of behaviours. By turning the desired behaviour change into a game, people become engaged and encouraged to adopt new habits. For example:

Brands can leverage gamification to engage consumers to better understand their products, and become advocates for the brand to provide product endorsements, and drive customer loyalty.
Companies can use gamification to improve employee performance and to motivate adoption of new business processes.

Developing Skills - Gamification is increasingly being used in both formal education and in corporate training programmes to engage students in a more immersive learning experience. While many approaches are being used, they can generally be divided into two categories:

Building a game layer on top of lesson material, where competition and/or collaboration between students is encouraged with game mechanics such as points for actions, badges for rewards and leader boards for competition.
Turning the lesson into a game, where in addition to the game layer of points and badges, simulation and animation is used to immerse the students in the environment and allow them to practice new skills in a safe, virtual environment that provides immediate feedback.

Enabling Innovation - Innovation games are typically structured quite differently than games designed to change behaviour or develop skills. Innovation games use emergent game structures that provide the goals, rules, tools and play space for the players to explore, experiment, collaborate and solve problems. Innovation games generally use game mechanics to create a more engaging experience, but the key is to engage lots of players, solving problems through crowdsourcing.

“As gamification moves from being leveraged by a limited number of leading-edge innovators to becoming more broadly adopted by early adopters, it is important that CIOs and IT leaders understand the underlying principle of gamification and how to apply it within the IT organisation,” said Mr Burke.

Additional information is available in the Gartner Special Report "Gamification: Engagement Strategies for Business and IT”. The Special Report can be viewed at http://www.gartner.com/technology/research/gamification/, and includes links to reports and video commentary that examine the impact of gamification on organisations.

Mr Burke will provide additional analysis during the Gartner webinar, "Gamification Trends and Strategies to Help Prepare for the Future” on 28 November at 1:00pm and 4:00pm UK time. To register for this complimentary webinar, please visit http://my.gartner.com/portal/server.pt?open=512&objID=202&mode=2&PageID=5553&resId=2191918&ref=Webinar-Calendar.

Worldwide Platform as a Service Revenue Is on Pace to Reach \$1.2 Billion in 2012

Mon, 19 Nov 2012 00:00:00 +0100

Worldwide platform as a service (PaaS) revenue is on pace to reach \$1.2 billion in 2012, up from \$900 million in 2011, according to Gartner, Inc. The market will experience consistent growth with worldwide PaaS revenue totalling 1.5 billion in 2013, and growing to \$2.9 billion in 2016.

The category of PaaS includes suites of application infrastructure services, such as application platforms as a service (aPaaS) and integration platforms as a service (iPaaS); as well as specialist application infrastructure services, such as database platform as a service, business process management platform as a service, messaging as a service and other functional types of middleware offered as a cloud service. Users may subscribe to a cloud provider's PaaS or may buy a cloud-enabled application infrastructure product and build their own PaaS for private cloud (private PaaS) or public cloud consumption.

"Of all the cloud technological aspects, infrastructure as a service (IaaS) and software as a service (SaaS) are the most mature and established from a competitive landscape perspective, while PaaS is the least evolved," said Fabrizio Biscotti, research director at Gartner. "For this reason, PaaS is where the battle between vendors and products is set to intensify the most. It comes as no surprise that the PaaS competitive landscape is still in flux, with traditional application infrastructure vendors facing competition from new large players moving into the market, and myriad specialised PaaS pure players cutting into their slice of profits."

The largest segments within the PaaS market are cloud application platform services (aPaaS), accounting for 34.4 per cent of total PaaS spending in 2012; cloud application life cycle management (ALM) services (almPaaS) at 12 per cent; cloud BPM platform services (bpmPaaS) at 11.6 per cent; and cloud integration services (iPaaS) at 11.4 per cent. Gartner predicts that the potential spending in PaaS technologies is an average of \$360 million per year from 2011 through 2016.

More than 70 per cent of PaaS functionality today can be referenced to an application infrastructure and middleware (AIM) capability, calling for AIM vendors to consider PaaS in their offerings or to have a strategy to address the needs of those clients looking at cloud for future deployments. Today, the largest AIM vendors have only marginal share of the PaaS market (lead by Microsoft and some IBM acquisitions), and this leaves the door open for more competitive landscape disruption over the next three years since many of the largest enterprise software vendors are on the cusp of entering the PaaS market with their own offerings.

"The fundamental appeal of PaaS is the opportunity for ISVs (independent software vendors) and IT organizations to create new software solutions with minimal capital expense and without the hassle of provisioning and configuring the underlying infrastructure," said Yefim Natis, distinguished analyst at Gartner. "Too many SMBs (small or midsize businesses), in addition, PaaS offers the chance to take advantage of some state of the art enabling technologies, they otherwise could not afford. Finally, the popularity of SaaS also drives adoption of PaaS for customisation, extension and integration of the cloud-based applications."

Despite ongoing economic uncertainties, mature economies, which are also the most mature IT markets, such as the US, Western Europe and Japan, are on the forefront of PaaS adoption. PaaS spending globally is relatively small, and it is almost entirely generated by the US, with 42 per cent of the market, followed by Western Europe and Mature Asia/Pacific. All mature economies combined, account for almost 90 per cent of worldwide PaaS spending.

Emerging markets are currently only marginally investing in PaaS, but this trend is expected to change as PaaS matures as a technology and the vendor landscape consolidates around fewer mainstream players that have the capability to service wider geographies.

"All software mega-vendors are strategically investing in the PaaS market despite the relatively modest projected market revenue," said Mr Natis. "Application infrastructure, and in this case application infrastructure as a service (PaaS), has always played a central role in establishing the standards, architectures and best practices in enterprise software markets. The vendors expect their leadership in the PaaS market to translate to large and effective ecosystems of partners, developers and solutions. PaaS technologies are embedded in many other types of cloud services — all major opportunity channels. The direct revenue in the PaaS market grossly underestimates the importance of this part of the cloud architecture."

Additional information is available in the report "Market Trends: Platform as a Service, Worldwide, 2012-2016, 2H12 Update." The report is available on Gartner's web site at http://www.gartner.com/resId=2188816.

PC Market in Western Europe Declined 15 Per Cent in the Third Quarter of 2012

Sun, 11 Nov 2012 00:00:00 +0100

PC shipments in Western Europe totalled 13.6 million units in the third quarter of 2012, a 15.4 per cent decline compared with the same period in 2011, according to Gartner, Inc.

"We've witnessed a decline across all PC segments this quarter in Western Europe," said Meike Escherich, principal analyst at Gartner. In the third quarter of 2012, mobile PC shipments declined 15.2 per cent while desktop PC shipments decreased 15.7 per cent. The professional and consumer PC markets declined 15.8 per cent and 15 per cent, respectively.

PC shipments in June and July were very low as many vendors were trying to clear inventory from the second quarter of 2012. Channel and retail partners also remained cautious about stocking too much inventory ahead of the Windows 8 launch.

HP continued to lose market share but retained the No. 1 position in the overall and professional PC segments. "HP's new leadership team has undertaken several initiatives to reignite its business, but transition periods are always difficult," said Ms Escherich.

Acer maintained second place and is getting closer to HP — Acer was 5.2 percentage points behind HP in market share in the third quarter of 2012. Despite a double-digit volume decline, Acer retained the lead in the consumer PC market in Western Europe. Asus remained in third place as its "netbook" volume declined further and ultrabook uptake remained slow.

Lenovo had a second consecutive strong quarter and increased its share 2 percentage points in the Western European PC market. Lenovo was also the only top five vendor to exhibit growth this quarter. In addition to vendor acquisitions, Lenovo has taken an aggressive position on pricing, especially in the professional PC market. This strategy had an impact on Dell's performance this quarter — Dell dropped to fifth position.

"The PC market will eventually return to growth, but the growth rate will not be at the level it was a few years ago. The real long-term challenges for the PC industry and PC vendors are to show growth and bring out products that can compete with the compelling new mobile devices coming on to the market," said Ms Escherich.

Following Fabric-Based Infrastructure Best Practices Could Deliver Six-Figure Savings

Wed, 31 Oct 2012 00:00:00 +0100

Organisations are settling for 10 to 20 per cent lower discounts on data centre convergence than could ultimately be achieved, according to Gartner, Inc. Gartner said that if organisations develop a negotiating strategy supported by IT and procurement they could achieve significant savings with fabric-based infrastructure (FBI).

Gartner defines FBI as an emerging area of vertical integration of hardware and software infrastructure with automation on top, which promises to help IT organisations realise their vision of a dynamically optimised data centre. FBI differs from fabric-based computing (FBC) by enabling existing technology elements to be grouped and packaged in a fabric-enabled environment to achieve infrastructure convergence.

“IT procurement is often relegated to a subsidiary role after IT and business management have done most of the negotiations with the vendors. In some cases vendors will press users and IT to bypass competitive RFPs so as to expedite integration, shipment and setup of the solution,” said George Weiss, vice president and distinguished analyst at Gartner. “With FBI and converged infrastructures, the entire procurement process must be monitored and executed with careful guidelines, so that all parties involved in executing the deal understand what the deliverables, commitments and long-term implications of the FBI contract are.”

Gartner recommends 11 steps to evaluate, select and negotiate procurement of FBI or converged infrastructure solutions. “If these best practice steps are followed, there is scope for additional benefits and for discounts as high as 20 per cent off list prices, depending on the nature and stage of the contract,” said Mr Weiss. “We frequently see contract sizes in the \$2 million to \$3 million range when converged solutions are requested. Even 10 per cent could offer the potential for \$200,000 to \$300,000 savings.”

Step 1. Ensure the procurement department, which is negotiating terms and conditions to ensure maximum discounts and benefits, is involved in the effort from the outset. If procurement managers are brought in after initial contacts and discussions with vendors, they will be constrained from generating changes or modifications to verbal agreements, or the procurement process will be extended well beyond the desired installation date.

Step 2. Prepare a first-time evaluation process six months ahead of the desired date of contract acceptance to allow for visits to vendor sites, demos, evaluations, test runs and design validations. If the contract is rushed, vendors will gain advantages by imposing their own benefits and minimising concessions to the buyer, and, if they are aware of the rush, they can pressure the user to bypass additional competitive proposals. Do not allude to required or urgent deployment dates, top-down pressures from CxOs, or bottom-up pressures from business units.

Step 3. Require a cross-functional team to be part of the evaluation process, since many of the roles in traditional deployments may be modified and system configurations may be tightly integrated, with little room for mixing and matching other vendor gear. If the traditional network, storage, security, database management system (DBMS) or computing experts are not made fully aware of the changes in their roles and process coordination, the solution could create resentment and conflict among domain experts.

Step 4. Generate an RFI or RFP that reflects the IT department's understanding of business goals in the short, medium and long term, with expected service levels, planned growth and technology life cycle improvements. Vendors of FBI may modify configurations, change the nature of partnerships and require strict adherence to associated management software, while licensing, pricing and other terms and conditions change. Perform "what if?" analyses and risk mitigation strategies to determine what escape valves can be invoked.

Step 5. Design the FBI RFP so that at least two suppliers (vendors, resellers or partners) can be engaged in a competitive evaluation. Decide how some parts of the FBI may be supplied by parties other than the lead vendor, and create a plan whereby FBI vertical silos from more than one vendor can be integrated through common infrastructure such as hypervisors, middleware, network and storage components.

Step 6. Ensure that the team involved in making the selection works closely with procurement to structure the most favourable contract terms and conditions for the organisation. Procurement should instruct IT participants how to engage with the vendors on technical aspects, including SLA definitions and recourse, without controlling the business and contractual negotiations.

Step 7. Specify that quotes be submitted for all line items, split into the following categories: hardware (HW)-compute; HW-networking; HW-storage; software (SW)-fabric resource pool management; SW-cloud management; SW-other licensed; SW maintenance; HW maintenance; and support installation services. Ensure that each category shows list and discounts. Since discounts can vary by category, acquire the knowledge on how category discounts in the FBI compare to stand-alone purchases by category. Pay particular attention to the support category and calculate the ratio of support to total contract value. If the amount exceeds 20 per cent, query the vendor on how the value was determined.

Step 8. FBI increases the probability of vendor lock-in, so devise an exit or bridge plan in case the vendor or coalition radically changes or abandons its original or mainstream road map. Devise a plan B such that strategic parts of the FBI have known and accessible alternative suppliers. Consider the lack of alternative options as a single point of failure with the potential to cause serious availability and continuity problems through periods of change, high workload pressures, significant software upgrades, and so on.

Step 9. Make the testing and integration that vendors supply as part of the service a collaborative effort, with mutual agreement before shipment. Truly converged and integrated solutions should live up to vendors' promises; it's up to IT staff to monitor the process and ensure vendor resource commitments. At this stage a compromise aimed at protecting the vendor's margins could affect the integrity and service level agreements (SLAs) of the solution. As a crosscheck, compare the vendor's contractual cost with your own hypothetical cost if you were to assume the responsibilities internally.

Step 10. Don't commit to timelines for additional purchases and data centre expansion before milestones and support meet agreed commitments. Predicate your continued loyal support of the vendor on quality of service, support and continued beneficial discounts. Keep the door open to competition, with invited presentations or trips to vendors part of your ongoing educational research. This will also help to ensure discount commitments are kept in place as additional projects emerge.

Step 11. When the vendor is chosen, don't end the search — technologies are dynamic so you should continually compare the pace of vendors' technological innovation. Gather market data and competitive positioning analysis. Peruse recent public financial disclosures and talk with other adopters. Use this information together with the analysis in follow-up negotiations.

Additional information is available in the Gartner report "Fabric-Based Infrastructure Best Practices Could Result in Up to Six-Figure Savings." The report is available on Gartner's web site at http://www.gartner.com/resId=2200515.

Additional analysis on data centre cost optimisation will be discussed at the Gartner Data Center Summit 2012 taking place from 27 to 28 November in London and at the Gartner Data Center Conference 2012 running from 3 to 6 December in Las Vegas. These events will deliver a wealth of strategic guidance and tactical recommendations on the hottest issues, including servers, next-stage virtualisation, and the impact of cloud computing, mobility, storage, facilities, business continuity and disaster recovery.

For further information on the London Summit, visit http://www.gartner.com/eu/datacenter.

Two-Thirds of Enterprises Will Adopt a Mobile Device Management Solution for Corporate Liable Users Through 2017

Thu, 25 Oct 2012 00:00:00 +0200

Over the next five years, 65 per cent of organisations will adopt a mobile device management (MDM) solution for their corporate liable users, according to Gartner, Inc. With the increased functionality of smartphones, and the increasing popularity of tablets, much of the network traffic and corporate data that was once the primary domain of enterprise PCs is now being shifted to mobile devices.

Gartner analysts discussed the growing importance of mobile device management at Gartner Symposium/ITxpo 2012, being held in Orlando through today.

"The era of the PC has ended. Employees are becoming more mobile and looking for ways to still be connected wherever work needs to be done," said Phil Redman, research vice president at Gartner. "The convenience and productivity gains that mobile devices bring are too tempting for most companies and their employees. Securing corporate data on mobile devices is a big challenge, but one that companies must embrace. Businesses are struggling with how to support and secure this dynamic workforce."

Gartner predicts that through 2017, 90 per cent of organisations will have two or more mobile operating systems to support. In the past year, many companies have moved to Apple's iOS as their main mobile device platform, with others to follow over the next 12 to 18 months. As organisations continue to offer multiplatform support, and new platforms — such as Windows 8 — continue to emerge, MDM needs will continue to grow.

As one of the fastest-growing enterprise devices in the past 18 months, tablets are a further driving force for organisations adopting MDM. Most companies and users are supporting the tablet for limited usage, typically for email and personal information management (PIM) functions. However, users are pushing for more enterprise applications to be supported on the tablet, usually through either enterprise or application provider development. As more of these native apps become available, and as remote access technology improves, more enterprise content will be stored on these devices. Users are already synchronising corporate content into public clouds for later retrieval on the devices.

"The rapid influx of users bringing their own consumer mobile devices that demand access to corporate resources presents challenges to organizations," said Mr Redman. "However, by implementing a structured support system with varied support levels, IT organisations can shield business information and enforce policies about data movement between the device and the corporate network, while enabling users to adopt the device they deem most appropriate. Organisations will find it hard to achieve an efficient mobile-support system if all platforms are not managed the same way under enterprise requirements. Like PCs, mobile devices are forms of client access devices, and the policies for them should be similar in strength but optimised for mobile usage, to those governing PCs."

Gartner said that mobile device proliferation is inevitable and the only way that IT staff can maintain control is by separating mobile computing devices into three distinct device classes: trusted standard devices provided by the company, tolerated devices and non-supported devices. In this scenario, users are given a predefined list of supported technologies in each class, along with a budget for the projected amount that each selection consumes. Users can optimise the technologies according to their requirements without exceeding the budget. Expense limits and spending caps by individuals bypass the need to rely on subjective interpretations of "reasonable use."

"This is just the start for MDM. More data is being put on mobile devices, and organisations are fast developing their own applications to support their mobile users. As mobile devices continue to displace traditional PCs, enterprises will look to their existing MDM systems to support more devices and enterprise applications and data," said Mr Redman. "MDM vendors are moving beyond security, to support enterprise and third-party applications, data and content. In the next two years, we will continue to see MDM platforms broaden out and become more enterprise mobile system management platforms, not just for devices alone."

About Gartner Symposium/ITxpo
Gartner Symposium/ITxpo is the world's most important gathering of CIOs and senior IT executives. This event delivers independent and objective content with the authority and weight of the world's leading IT research and advisory organization, and provides access to the latest solutions from key technology providers. Gartner's annual Symposium/ITxpo events are key components of attendees' annual planning efforts. IT executives rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use IT to address business challenges and improve operational efficiency.

Additional information about Gartner Symposium/ITxpo 2012 in Orlando, is available at www.gartner.com/symposium/us. Video replays of keynotes and sessions are available on Gartner Events on Demand at www.gartnerondemand.com.

Gartner Reveals Top Predictions for IT Organisations and Users for 2013 and Beyond

Wed, 24 Oct 2012 00:00:00 +0200

Gartner, Inc. has revealed its top predictions for IT organisations and IT users for 2013 and beyond. Gartner analysts presented their findings during Gartner Symposium/ITxpo, being held in Orlando through 25 October.

Gartner's top predictions focus on economic risks, opportunities and innovations that will impel CIOs to move to the next generation of business-driven solutions. Selected from across Gartner's research areas as the most compelling and critical predictions, they address the trends and topics that underline the reduction of control that IT has over the forces that affect it.

"The priorities of CEOs must be dealt with by CIOs who exist in a still-turbulent economy and increasingly uncertain technology future," said Daryl Plummer, managing vice president and Gartner fellow. "As consumerisation takes hold and the Nexus of Forces drives CEOs to certain expectations, CIOs must still provide reliability, serviceability and availability of systems and services. Their priorities must span multiple areas. As the world of IT moves forward, it is finding that it must coordinate activities in a much wider scope than it once controlled, and as a result, a loss of control echoes through several predictions we are making."

Gartner's top predictions for IT Organisations include the following:

Through 2015, 90% of enterprises will bypass broad-scale deployment of Windows 8.
Windows 8 is Microsoft's attempt to bring the touch interface to its flagship product to counter gains by Apple in rapid-growth markets. Microsoft had to make this change to modernise its offering, and its approach is to push IT Organisations to this new interface as quickly as possible. However, most organisations and their trusted management vendors are not yet prepared for this change, and Gartner predicts that organisations will want to wait for more stability before proceeding. While Microsoft as a technology company can make these changes at a more advanced pace, the preponderance of the customer base cannot move so quickly. The market will take time to mature, and most enterprises will sit on the sideline for now.

By Year-End 2014, three of the top five mobile handset vendors will be Chinese.
Mobile phone penetration in emerging markets has resulted in a changing of the guard in terms of the leading vendors. The openness of Android creates new markets for OEMs that previously did not have the necessary software expertise and engineering capabilities. The market continues to consolidate around Android and iOS, with other ecosystems struggling to gain traction, and, with most vendors committed to Android, it has become difficult to differentiate. The result is that the traditional mobile phone players are getting squeezed, being unable to compete with Apple and Samsung at the high end and struggling to differentiate from aggressive new vendors, most notably Huawei and ZTE, which are using the same Android platform for their models. Chinese vendors have the opportunity to leverage their strong position in the domestic Chinese market for entry-level smartphones and expand to other regions, because this is not just an emerging-market phenomenon.

By 2015, big data demand will reach 4.4 million jobs globally, but only one-third of those jobs will be filled.
The demand for big data is growing, and organisations will need to reassess their competencies and skills to respond to this opportunity. Jobs that are filled will result in real financial and competitive benefits for Organisations. An important aspect of the challenge in filling these jobs lies in the fact that organisations need people with new skills — data management, analytics and business expertise and non-traditional skills necessary for extracting the value of big data, as well as artists and designers for data visualisation.

By 2014, European Union directives will drive legislation to protect jobs, reducing offshoring by 20 per cent through 2016.
An upward trend in unemployment has continued in the European Union during the ongoing financial crisis. With little expectation of a short-term recovery, Gartner expects to see the European Union introducing directives before the end of 2014 to protect local jobs. The impact of this protectionist legislation would be a net reduction of offshoring by 20 per cent through 2016. This does not mean that Organisations would abandon the use of global delivery models, but it would result in the rebalancing of where labour is located with such models. Opportunities would be created for firms to invest further in lower-cost parts of Europe, or in areas within their domestic location, where costs may be lower.

By 2014, IT hiring in major Western markets will come predominantly from Asian-headquartered companies enjoying double-digit growth.
An increasing number of successful Asian companies — particularly from China and India — are enjoying double-digit growth rates and will substantially grow their geographic footprints, making significant investments in major Western markets through 2015. Consequently, these organisations will be responsible for major hiring of IT professionals to support their growth at a time when Western companies will still be coping with the impact of the economic crisis. Exacerbating the disparity between the hiring practices of Western and Asian organisations will be the increased use of industrialised IT solutions, which will further reduce the IT staffing needs of Western firms.

By 2017, 40 per cent of enterprise contact information will have leaked into Facebook via employees' increased use of mobile device collaboration applications.
Facebook is one of the top five applications installed on smartphones and tablets, and many organisations are being pressured to permit interlinking with Facebook and similar products, because those products provide a high degree of leverage for new contacts. While many organisations have been legitimately concerned about the physical coexistence of consumer and enterprise applications on devices that interact with IT infrastructure, there has been little discussion about the underlying technologies that permit transfer of information between legitimate enterprise-controlled applications and consumer applications. These interactions are difficult to track, and the technologies to control the transfer are more difficult to build, deploy and manage.

Through 2014, employee-owned devices will be compromised by malware at more than double the rate of corporate-owned devices.
Corporate networks will become more like college and university networks, which were the original "bring your own device" (BYOD) environments. Because colleges and universities lack control over students' devices, they focus on protecting their networks by enforcing policies that govern network access. Gartner said that businesses will adopt a similar approach and will block or restrict access for those devices that are not compliant with corporate policies. Businesses that adopt BYOD initiatives should establish clear policies that outline which employee-owned devices will be allowed and which will be banned. In the BYOD era, security professionals will need to diligently monitor vulnerability announcements and security incidents involving mobile devices and respond appropriately with policy updates.

Through 2014, software spending resulting from the proliferation of smart operational technology will increase by 25 per cent.
Previously "dumb" operational devices or objects, like a vending machine, medical device, marine engine or parking meter, are now having software embedded in them, and sensors are being linked to the internet to create and receive data streams. This machine-to-machine communication has the potential to trigger significant new software costs for four reasons: (1) because of the amount of software like light databases or operating systems embedded within large numbers of operational devices; (2) because of the traditional software vendors starting to charge license fees, in certain circumstances, if the devices even indirectly hit their applications; (3) because operational technology vendors are developing IT-like platforms and getting away from hardware sales and into annuity software sales; (4) because the people buying and paying for this may not even be in IT, are not experts in software procurement, and may make expensive mistakes signing license agreements with hidden, or not so hidden, costs and risks.

By 2015, 40 per cent of Global 1000 Organisations will use gamification as the primary mechanism to transform business operations.
Seventy per cent of business transformation efforts fail due to lack of engagement. Gamification addresses engagement, transparency of work, and connecting employees' actions to business outcomes. Companies apply feedback, measurement and incentives — the same techniques that game designers use, to keep players interested — to achieve the needed engagement for the transformation of business operations. Diverse industry segments are already finding gamification effective, and Gartner predicts that the worldwide market will grow from \$242 million in 2012 to \$2.8 billion in 2016, with enterprise gamification eclipsing consumer gamification in 2013.

By 2016, wearable smart electronics in shoes, tattoos and accessories will emerge as a \$10 billion industry.
The majority of revenue from wearable smart electronics over the next four years will come from athletic shoes and fitness tracking, communications devices for the ear, and automatic insulin delivery for diabetics. Wearable smart electronics, such as fitness trackers, often come with data analysis applications or services that create useful insights for the wearer. Applications and services will create new value for consumers, especially when combined with personal preferences, location, biosensing and social information. CIOs must evaluate how the data from wearable electronics can be used to improve worker productivity, asset tracking and workflow. Wearable electronics will also provide more-detailed information to retailers for targeting advertisements and promotions.

By 2014, market consolidation will displace up to 20 per cent of the top 100 IT services providers.
A Nexus of Forces, including cloud, big data, mobility and social media, along with continued global economic uncertainty, will accelerate the restructuring of the nearly \$1 trillion IT services market. By 2015, low-cost cloud services will cannibalise up to 15 per cent of top outsourcing players' revenue, and more than 20 per cent of large IT outsourcers not investing enough in industrialisation and value-added services will disappear through merger and acquisition. This will limit and endanger the typical offshore/nearshore approach run by dedicated IT services providers and create low-cost options onshore or facilitate a globalised approach to staffing. CIOs should re-evaluate the providers and types of providers used for IT services, with particular interest in cloud-enabled providers supporting information, mobile and social strategies.

About Gartner Symposium/ITxpo
Gartner Symposium/ITxpo is the world's most important gathering of CIOs and senior IT executives. This event delivers independent and objective content with the authority and weight of the world's leading IT research and advisory Organisation, and provides access to the latest solutions from key technology providers. Gartner's annual Symposium/ITxpo events are key components of attendees' annual planning efforts. IT executives rely on Gartner Symposium/ITxpo to gain insight into how their Organisations can use IT to address business challenges and improve operational efficiency.

Additional information about Gartner Symposium/ITxpo 2012 in Orlando, is available at www.gartner.com/symposium/us. Video replays of keynotes and sessions are available on Gartner Events on Demand at www.gartnerondemand.com.

Gartner Identifies the Top 10 Strategic Technology Trends for 2013

Tue, 23 Oct 2012 00:00:00 +0200

Gartner, Inc. highlighted the top 10 technologies and trends that will be strategic for most organisations in 2013. Gartner analysts presented their findings during Gartner Symposium/ITxpo 2012, being held in Orlando through 25 October.

Gartner defines a strategic technology as one with the potential for significant impact on the business in the next three years. Factors that denote significant impact include a high potential for disruption to IT or the business, the need for a major dollar investment, or the risk of being late to adopt.

A strategic technology may be an existing technology that has matured and/or become suitable for a wider range of uses. It may also be an emerging technology that offers an opportunity for strategic business advantage for early adopters or with potential for significant market disruption in the next five years. These technologies impact the organisation's long-term plans, programmes and initiatives.

“We have identified the top 10 technologies that will be strategic for most organisations, and that IT leaders should factor into their strategic planning processes over the next two years,” said David Cearley, vice president and Gartner Fellow. “This does not necessarily mean organisations should adopt and invest in all of the listed technologies; however companies need to be making deliberate decisions about how they fit with their expected needs in the near future.”

Mr Cearley said that these technologies are emerging amidst a nexus of converging forces - social, mobile, cloud and information. Although these forces are innovative and disruptive on their own, together they are revolutionising business and society, disrupting old business models and creating new leaders. As such, the Nexus of Forces is the basis of the technology platform of the future.

The top 10 strategic technology trends for 2013 include:

Mobile Device Battles
Gartner predicts that by 2013 mobile phones will overtake PCs as the most common web access device worldwide and that by 2015 over 80 per cent of the handsets sold in mature markets will be smartphones. However, only 20 per cent of those handsets are likely to be Windows phones. By 2015, media tablet shipments will reach around 50 per cent of laptop shipments and Windows 8 will likely be in third place behind Google’s Android and Apple iOS operating systems. Windows 8 is Microsoft’s big bet and Windows 8 platform styles should be evaluated to get a better idea of how they might perform in real-world environments as well as how users will respond. Consumerisation will mean organisations won't be able to force users to give up their iPads or prevent the use of Windows 8 to the extent consumers adopt consumer-targeted Windows 8 devices. Businesses will need to support a greater variety of form factors, reducing the ability to standardise PC and tablet hardware. The implications for IT is that the era of PC dominance with Windows as the single platform will be replaced with a post-PC era where Windows is just one of a variety of environments IT will need to support.

Mobile Applications and HTML5
The market for tools to create consumer and enterprise facing apps is complex with well over 100 potential tools vendors. Currently, Gartner separates mobile development tools into several categories. For the next few years, no single tool will be optimal for all types of mobile application so expect to employ several. Six mobile architectures – native, special, hybrid, HTML 5, Message and No Client will remain popular. However, there will be a long term shift away from native apps to web apps as HTML5 becomes more capable. Nevertheless, native apps won't disappear, and will always offer the best user experiences and most sophisticated features. Developers will also need to develop new design skills to deliver touch-optimised mobile applications that operate across a range of devices in a coordinated fashion.

Personal Cloud
The personal cloud will gradually replace the PC as the location where individuals keep their personal content, access their services and personal preferences and centre their digital lives. It will be the glue that connects the web of devices they choose to use during different aspects of their daily lives. The personal cloud will entail the unique collection of services, web destinations and connectivity that will become the home of their computing and communication activities. Users will see it as a portable, always-available place where they go for all their digital needs. In this world no one platform, form factor, technology or vendor will dominate and managed diversity and mobile device management will be an imperative. The personal cloud shifts the focus from the client device to cloud-based services delivered across devices.

Enterprise App Stores
Organisations face a complex app store future as some vendors will limit their stores to specific devices and types of apps forcing the business to deal with multiple stores, multiple payment processes and multiple sets of licensing terms. By 2014, Gartner said that many organisations will deliver mobile applications to workers through private application stores. With enterprise app stores the role of IT shifts from that of a centralised planner to a market manager providing governance and brokerage services to users and potentially an ecosystem to support apptrepreneurs.

The Internet of Things
The Internet of Things (IoT) is a concept that describes how the internet will expand as physical items such as consumer devices and physical assets are connected to the internet. Key elements of the IoT which are being embedded in a variety of mobile devices include embedded sensors, image recognition technologies and NFC payment. As a result, mobile no longer refers only to use of cellular handsets or tablets. Cellular technology is being embedded in many new types of devices including pharmaceutical containers and automobiles. Smartphones and other intelligent devices don't just use the cellular network, they communicate via NFC, Bluetooth, LE and Wi-Fi to a wide range of devices and peripherals, such as wristwatch displays, healthcare sensors, smart posters, and home entertainment systems. The IoT will enable a wide range of new applications and services while raising many new challenges.

Hybrid IT and Cloud Computing
As staffs have been asked to do more with less, IT departments must play multiple roles in coordinating IT-related activities, and cloud computing is now pushing that change to another level. A recently conducted Gartner IT services survey revealed that the internal cloud services brokerage (CSB) role is emerging as IT organisations realise that they have a responsibility to help improve the provisioning and consumption of inherently distributed, heterogeneous and often complex cloud services for their internal users and external business partners. The internal CSB role represents a means for the IT organisation to retain and build influence inside its organisation and to become a value centre in the face of challenging new requirements relating to increasing adoption of cloud as an approach to IT consumption.

Strategic Big Data
Big Data is moving from a focus on individual projects to an influence on enterprises’ strategic information architecture. Dealing with data volume, variety, velocity and complexity is forcing changes to many traditional approaches. This realisation is leading organisations to abandon the concept of a single enterprise data warehouse containing all information needed for decisions. Instead they are moving towards multiple systems, including content management, data warehouses, data marts and specialised file systems tied together with data services and metadata, which will become the "logical" enterprise data warehouse.

Actionable Analytics
Analytics is increasingly delivered to users at the point of action and in context. With the improvement of performance and costs, IT leaders can afford to perform analytics and simulation for every action taken in the business. The mobile client linked to cloud-based analytic engines and big data repositories potentially enables use of optimisation and simulation everywhere and every time. This new step provides simulation, prediction, optimisation and other analytics, to empower even more decision flexibility at the time and place of every business process action.

In Memory Computing
In memory computing (IMC) can also provide transformational opportunities. The execution of certain-types of hours-long batch processes can be squeezed into minutes or even seconds allowing these processes to be provided in the form of real-time or near real-time services that can be delivered to internal or external users in the form of cloud services. Millions of events can be scanned in a matter of a few tens of millisecond to detect correlations and patterns pointing at emerging opportunities and threats "as things happen." The possibility of concurrently running transactional and analytical applications against the same dataset opens unexplored possibilities for business innovation. Numerous vendors will deliver in-memory-based solutions over the next two years driving this approach into mainstream use.

Integrated Ecosystems
The market is undergoing a shift to more integrated systems and ecosystems and away from loosely coupled heterogeneous approaches. Driving this trend is the user desire for lower cost, simplicity, and more assured security. Driving the trend for vendors the ability to have more control of the solution stack and obtain greater margin in the sale as well as offer a complete solution stack in a controlled environment, but without the need to provide any actual hardware. The trend is manifested in three levels. Appliances combine hardware and software and software and services are packaged to address and infrastructure or application workload. Cloud-based marketplaces and brokerages facilitate purchase, consumption and/or use of capabilities from multiple vendors and may provide a foundation for ISV development and application runtime. In the mobile world, vendors including Apple, Google and Microsoft drive varying degrees of control across and end-to-end ecosystem extending the client through the apps.

About Gartner Symposium/ITxpo
Gartner Symposium/ITxpo is the world's most important gathering of CIOs and senior IT executives. This event delivers independent and objective content with the authority and weight of the world's leading IT research and advisory organisation, and provides access to the latest solutions from key technology providers. Gartner's annual Symposium/ITxpo events are key components of attendees' annual planning efforts. IT executives rely on Gartner Symposium/ITxpo to gain insight into how their organisations can use IT to address business challenges and improve operational efficiency.

Additional information about Gartner Symposium/ITxpo 2012 in Orlando, is available at www.gartner.com/symposium/us. Video replays of keynotes and sessions are available on Gartner Events on Demand at www.gartnerondemand.com.

Worldwide Wafer Fab Equipment Spending to Decline 13.3 Per Cent in 2012

Mon, 01 Oct 2012 00:00:00 +0200

Worldwide wafer fab equipment (WFE) spending is on pace to total \$31.4 billion in 2012, a decline of 13.3 per cent from 2011 spending of \$36.2 billion, according to Gartner, Inc. While the market will improve in 2013, it will not return to positive growth, with WFE spending projected to total \$31.2 billion, a 0.8 per cent decline from 2012. In 2014 the market returns to growth, as it is projected to increase 15.3 per cent to surpass \$35.9 billion.

"The outlook for semiconductor equipment markets has deteriorated as the macro economy has weakened," said Bob Johnson, research vice president at Gartner. "WFE started off the year strong, as foundries and other logic manufacturers ramped up sub-30-nm (nanometre) production. However, demand for new equipment logic production will soften as yields improve, leading to declining shipment volumes for the rest of the year."

Wafer fab manufacturing capacity utilisation will decline into the low 80 per cent range by the end of 2012 before slowly increasing to about 87 per cent by the end of 2013. Leading-edge utilisation will return to the high 80 per cent range by the second half of 2012, and move into the low 90 per cent range through 2013, providing for a somewhat positive capital investment environment.

"Although a period of inventory correction, which led to lowered production levels, appears to be over, overall market weakness is continuing to depress utilization levels," said Mr Johnson. "Increased demand, combined with less than mature yields at the leading edge, is creating shortages at the leading edge for logic, but that is not enough to bring total utilization levels up to desired levels. In the memory segment, some suppliers are even cutting production in an attempt to shore up weak market fundamentals."

Gartner said that memory will continue to be weak through 2012, with strong declines in DRAM investments and a virtually flat NAND market. Looking beyond 2012, analysts foresee a modest growth pattern, with normal, but relatively benign, cyclical fluctuations as the industry returns to mid-single-digit growth in device revenue, and capital investment responds accordingly.

Foundry capital spending has been revised downward for 2012 and 2013 due to an earlier yield improvement on 28 nm technology achieved by some foundries and a higher downside risk of wafer demand in the fourth quarter of 2012 and first quarter of 2013. However, foundry capital expenditure (capex) is revised upward for future years due to the more aggressive development schedule of extreme ultraviolet (EUV) and 450 mm.

Foundries will likely tighten their short-term capex when they experience a more than 10 per cent reduction of the fab utilisation rate later in 2012. Wafer demand will drop for several quarters due to the revised downward semiconductor device outlook and the earlier success on yield improvement of 28 nm low-power polysilicon silicon oxynitride (SiON) technology achieved by some key foundries, although the yield of 28 nm high-k metal gate (HKMG) remains below normal.

Additional information is available in the Gartner report, "Forecast Analysis: Semiconductor Wafer Fab Manufacturing Equipment, Worldwide, 3Q12 Update." The report is available on Gartner's web site at http://www.gartner.com/resId=2175019.

Worldwide External Controller-Based Disk Storage Market Grew 6.7 Per Cent in the Second Quarter of 2012

Fri, 07 Sep 2012 00:00:00 +0200

Worldwide external controller-based (ECB) disk storage vendor revenue totalled \$5.5 billion in the second quarter of 2012, a 6.7 per cent increase from revenue of \$5.1 billion in the second quarter of 2011, according to Gartner, Inc. The second quarter of 2012 was the 11^th consecutive quarter of revenue growth, but fell shy of Gartner's expectation for a 7.9 per cent year-over-year increase.

"Although the hard-disk drive (HDD) supply issues created by the October 2011 Thailand flood was no longer an impediment on meeting user demand, the economy in certain regions had a debilitating impact on vendor revenue in the second quarter of 2012," said Roger Cox, research vice president at Gartner. "In particular, the dour EMEA economy dampened year-over-year vendor revenue growth to just 2.6 per cent against a forecast of 7.4 per cent, while the slowing Asia/Pacific economy held year-over-year vendor revenue growth to 9 per cent, 7.1 percentage points lower than Gartner's forecast. Only the North American region and Japan met or exceeded our expectations in the second quarter of 2012."

Three vendors — EMC, Fujitsu and Oracle — produced year-over-year revenue gains higher than the industry average (see Table 1). EMC leveraged its optimised-to-fit product strategy to increase its leading ECB disk storage platform market share to 33.3 per cent. Fujitsu is benefiting from a rebound in Japan as well as in EMEA where its Fujitsu Technology Solutions subsidiary produced improved results selling the Fujitsu Eternus-branded storage products. Relying on increased sales of the ZFS Storage Appliance, Oracle increased its year-over-year market share for the first time since it closed the acquisition of Sun Microsystems in early 2010.

Worldwide ECB Disk Storage Vendor Revenue Estimates for 2Q12 (Millions of US Dollars)

Company	2Q12 Revenue	2Q12 Market Share (%)	2Q11 Revenue	2Q11 Market Share (%)	2Q11-2Q12 Change (%)
EMC¹	1,823.2	33.3	1,619.4	31.6	12.6
IBM	754.4	13.8	772.7	15.1	-2.4
NetApp³	605.5	11.1	649.3	12.7	-6.7
HP	513.6	9.4	495.4	9.7	3.7
Hitachi/HDS²	477.6	8.7	467.4	9.1	2.2
Dell	400.2	7.3	378.6	7.4	5.7
Oracle	105.5	1.9	92.7	1.8	13.9
Fujitsu⁴	83.1	1.5	64.9	1.3	28.0
Others	706.0	12.9	585.8	11.4	20.5
Total	5,469.2	100.0	5,126.1	100.0	6.7

Note 1: EMC revenue excludes OEM revenue from Dell and Fujitsu Technology Solutions.
Note 2: Hitachi/HDS revenue excludes OEM revenue from HP.
Note 3: NetApp revenue excludes ONTAP OEM revenue from IBM and Engenio OEM revenue.
Note 4: Fujitsu’s branded revenue does not include products sold under the EMC and NetApp brands.
Source: Gartner (September 2012)

Although Dell, HP and Hitachi/Hitachi Data Systems had positive year-on-year revenue growth, each fell short of the overall ECB disk storage market growth in the second quarter of 2012. With the separation from EMC behind it, Dell showed distinct strength with its Compellent and EqualLogic storage platforms. HP capitalised on its increased P10000 3PAR Storage System traction to offset declining EVA sales. As Hitachi/Hitachi Data Systems' modular ECB disk storage offering transitions to the new Hitachi Unified Storage (HUS) platform, Hitachi/Hitachi Data Systems relied largely on its high-end enterprise VSP to enable it to produce positive year-on-year revenue gains. With respect to the network attached storage (NAS) market segment, Dell, HP and Hitachi/Hitachi Data Systems have a weak presence, which hindered their respective ability to gain overall ECB disk storage market share.

IBM and NetApp were the only two vendors to not achieve year-on-year revenue gains in the second quarter of 2012. Even though IBM's XIV and Storwize V7000 ECB disk storage platforms achieved a 28.2 per cent year-on-year revenue gain, they were unable to offset the deterioration in DS8000 and DS5000/DS3000 revenue.

Of NetApp's three product families — FAS6000, FAS3000 and FAS2000 — only the FAS2000 series had a positive year-on-year revenue growth in the second quarter of 2012. The FAS6000 and FAS3000 fell off by 15.6 and 17.5 per cent, respectively, while the FAS2000 gained 16.5 per cent. Even though Asia/Pacific and Japan achieved gains of 18.8 and 19 per cent each, NetApp's revenue dropped more in the Americas than it did in EMEA. Mindful that the second calendar quarter covers two months of NetApp's first fiscal quarter, its weakest quarter, and that just one quarter is not a trend, Gartner said that NetApp is facing stronger competitive headwinds in small or midsize business (SMB), as well as the enterprise markets and that branded E-Series did not produce meaningful revenue.

Gartner ECB disk storage reports reflect revenue from new vendor-branded hardware only, as well as hardware revenue associated with financial leases and managed services. Optional and separately priced storage software revenue and storage area network infrastructure components and used ECB disk storage systems are excluded.

Additional information on the ECB disk storage market is available in Gartner's "Quarterly Statistics: Disk Array Storage, All Regions, All Countries, 2Q12 Update." The report includes vendor market share by data access method, price band, sales channel and operating-system segmentation. The report is available on Gartner's website at http://www.gartner.com/resId=2143917.

Worldwide Server Market Revenue Declined 2.9 Per Cent; Server Shipments Grew 1.4 Per Cent in the Second Quarter of 2012

Fri, 31 Aug 2012 00:00:00 +0200

In the second quarter of 2012, worldwide server shipments grew 1.4 per cent over the second quarter of 2011, while revenue declined 2.9 per cent year-on-year, according to Gartner, Inc.

“The slight unit growth for the second quarter of 2012 was contrasted by a decline in revenue on a global level with geographic variations continuing to be shown based on the ongoing differences in economic conditions by region,” said Jeffrey Hewitt, research vice president at Gartner. “In terms of revenue growth, only Asia/Pacific and the United States produced growth for the quarter—all other regions declined.”

“x86 servers continued to grow but at a moderated rate with 1.8 per cent growth in units for the quarter and a 5.6 per cent increase in revenue. RISC/Itanium Unix servers continued to fall globally for the period – a 14.9 per cent decline in shipments and a 17.9 per cent drop in vendor revenue compared to the same quarter last year. The ‘other’ CPU category, which is primarily mainframes, showed a decline of 3.0 per cent,” Mr Hewitt said.

From the regional standpoint, the United States grew the most significantly in shipments with an 8.4 per cent increase. The United States also posted the highest vendor revenue growth at 6.5 per cent for the period.

HP had the lead for the quarter in the worldwide server market based on revenue (download Tables below). The company posted worldwide server vendor revenue of \$3.7 billion for a total share of 29.1 per cent for the second quarter of 2012 HP’s ProLiant brand was the most significant revenue contributor to its server product lines at 85.4 per cent of its total server revenue for the second quarter.

In server shipments, HP remained the worldwide leader in the second quarter of 2012 (download Tables below) in spite of a shipment decline of 5.6 per cent from the second quarter of last year. This decline was driven primarily by drops in HP’s ProLiant and Integrity brands.

In terms of x86-based server form factors, blade servers rose 1.1 per cent in shipments and 7.3 per cent in revenues for the quarter. The x86-based rack-optimized form factor fell 3.1 per cent in shipments and climbed 3.1 per cent in revenue for the second quarter of 2012.

In Europe, the Middle East and Africa (EMEA), server shipments totalled more than 585,000 units in the second quarter of 2012, a decrease of 4.4 per cent from the equivalent period last year (download Tables below). Server revenue totalled \$3.3 billion in the second quarter of 2012, a decline of 11.6 per cent from the equivalent quarter last year (download Tables below).

“The EMEA server market continues to struggle as a result of broader economic challenges, with the second quarter of 2012 marking the third consecutive quarter of decline in shipments and the fourth consecutive quarter of revenue decline,” said Adrian O’Connell, research director at Gartner. “Each of the three key sub regions saw revenue decline: Eastern Europe by 1.3 per cent, the Middle East and Africa by 0.5 per cent and Western Europe by 14.7 per cent. This weakness was evident in both technological and geographical segments.”

The Other CPU segment showed the weakest result, with a 37.1 per cent year-on-year decline, the market's general weakness being compounded in this segment by a cyclical low in terms of the life cycle of products. The RISC/Itanium Unix segment was also very weak, with a 25.1 per cent decline, as migration away from Unix platforms continued. Despite the overall Unix weakness, IBM continued to do well, with its share of all RISC/Itanium Unix revenue increasing to nearly 53 per cent. The x86 segment, although less weak than the others, also declined, with revenue down by 2.9 per cent.

As in the first quarter of 2012, Dell continued to be the only top-five vendor to achieve revenue growth, as each of the other four suffered revenue declines. As such, Dell increased its revenue share by two percentage points in the second quarter of 2012. HP, in first place, performed slightly better than the market, despite suffering declines in shipments and revenue. IBM, in second place, suffered a 3.1 percentage point loss of share. “It was the vendor most affected by the weakness in the product life cycle, but it will hope to reverse this trend with the introduction of new, high-end products in future quarters,” said Mr O’Connell.

EMEA was not alone in having a difficult time this quarter, with Japan and Latin America also declining, and even Asia/Pacific achieving only modest growth. “The real challenge for vendors operating in EMEA is that this region lacks many of the long-term growth drivers that other regions enjoy, and the region's economic malaise is limiting the short-term outlook,” said Mr O’Connell. “New product introductions may help spur some improvement in demand as we move into the second half of the year, but the key issue for vendors remains one of execution in order to make the most of competitive opportunities.”

Six Core Principles to Tap the Power of Social Media

Wed, 29 Aug 2012 00:00:00 +0200

Many business and IT leaders tasked with executing on social-media-based efforts do not place enough emphasis on the "social" aspect of community participation, according to Gartner, Inc. Although numerous organisations have achieved social media success, failure rates are very high because leaders and managers rely too heavily on social technology functionality and often miss the critical design concerns.

"Far too many social media endeavours are failing because the managers leading the efforts lack knowledge of the fundamental principles of mass collaboration," said Anthony Bradley, group vice president at Gartner. "Business and IT leaders must understand the basic nature of mass collaboration and how to deliver on its unique value. Like never before, millions of people can simultaneously create content, share experiences, build relationships, and engage in other forms of productive work and meaningful activities."

Mr Bradley said that business and IT leaders shouldn't assume that the social technologies automatically come with the needed mass collaboration built in. Mass collaboration must be designed and delivered as part of the social solution, and no social technology is great enough to save efforts that ignore or omit the fundamental principles of mass collaboration.

"When these efforts are omitted, people don't view the social media environment as a place for them to meaningfully collaborate, and so adoption never really takes hold," Mr Bradley said. "Initial interest wanes quickly as community members realise that collaborating in the environment is too difficult. Participation lacks focus, and critical mass never materialises around a common cause."

Gartner has identified six core design principles that distinguish social media from other approaches to communication and collaboration, and form the foundation for its unique mass-collaboration value proposition. Business leaders should apply these principles to shift away from a "provide and pray" approach to a motivate and engage strategy. These core design principles can be viewed on Flickr at http://bit.ly/Lu3Dud.

1.      Participation: Getting Communities to Work for You
Successful social media solutions tap into the power of mass collaboration through user participation. Many organisations miss the participation principle and look at social media as another channel for corporate communications rather than an opportunity for mass collaboration. Instead, Gartner recommends that business leadership set active participation as a priority design goal, with everything else revolving around getting the community to contribute valuable content. Providing seed content to promote community contributions, and motivating content contribution through social incentive mechanisms — such as social status and gamification — are recommended to drive participation.

2.      Collective: People Must Swarm to the Effort
With social media, participants "collect" around a unifying cause. People go to the content to contribute their piece to the whole. However, the most challenging effort with social media is to gain community adoption, and speed is critical. Swarming is almost completely dependent on the organisation’s purpose for mass collaboration. Purpose is the specific reason business leadership wants people to collaborate; this is what draws together a community and gets them to contribute. More importantly, purpose also identifies the "what’s in it for me" for the individual contributors. What’s unique about mass collaboration is that people are self-motivated to participate if the purpose is compelling enough to them personally.

Gartner advises organisations to pursue a specific and well-defined purpose that is easily identifiable and meaningful to the target audience. It’s important to capitalise on physical world events, as well as online events, as part of a "tipping point plan" to rally people and catalyse a community.

3.      Transparency: The Community Validates and Organises Content
A social media solution also provides transparency, in that participants are privy to one another's participation. It is in this transparency that the community improves content, unifies information, self-governs, self-corrects, evolves, creates emergence and otherwise propels its own advancement. This principle of transparency distinguishes social media from other forms of content sharing, such as web content management and traditional knowledge management systems.

Gartner recommends empowering the community with a robust capability to view, use and provide feedback on the contributions of others: with functionality such as thumbs up and thumbs down, tagging, voting, star ratings, and social commentary. Employing transparency with social status and gamification mechanisms, such as leader boards, virtual currencies and badges, also helps to create incentives and recognise valuable contributions.

4.      Independence: Provides the "Mass" in Mass Collaboration
Independence delivers anytime, anyplace and any-member collaboration, which means any participant can contribute completely independent of any other. To aid independence, Gartner advises organisations to consider the potential scale of the social media solution, and examine the design for anything that may impede anytime, anyplace and any-member collaboration. They should also eliminate, or at least minimise, any workflow, controls, administration and moderating, or other gating mechanisms that can create bottlenecks and negatively impact scale.

5.      Persistence: Contributions Must Endure for Scaled Value
Social media captures participants' interactions and contributions in a persistent state for others to view, share and augment. This principle shows how social media differs from "same time" conversational interactions, such as telephone and videoconferencing, where the information exchanged isn't captured effectively.

Organisations should make it easy for participants to capture content using evolving technologies, such as contextual information capture, to help collect more interaction content. They should examine how much persistence is desired, how much of the contribution to capture, how to manage it and how long to maintain it, whilst identifying content that is critical to the purpose of the social media effort.

6.      Emergence: Communities Self-Direct for Greater Productivity
The behaviours in mass collaboration cannot be modelled, designed, optimised or controlled like those in traditional systems. They emerge over time through the interactions of community members. Emergence is what allows collaborative communities to come up with new ways of working or new solutions to seemingly intractable problems.

Gartner advises organisations to focus on the ends and not the means, by providing the community with the time and flexibility to find its own way of achieving results. An organisation should observe social media behaviours, examine how productivity actually manifests itself through community interactions, then guide the community or make other organisational behaviour adjustments to accommodate new ways of working.

Additional information is available in the report: "Master Six Core Principles to Tap the Massive Power of Social Media," which is available on Gartner's web site at http://www.gartner.com/resId=1860514.

Bring Your Own Device Programmes Herald the Most Radical Shift in Enterprise Client Computing Since the Introduction of the PC

Tue, 28 Aug 2012 00:00:00 +0200

The rise of bring your own device (BYOD) programmes is the single most radical shift in the economics of client computing for business since PCs invaded the workplace, according to Gartner, Inc. Every business needs a clearly articulated position on BYOD, even if it chooses not to allow for it.

BYOD is an alternative strategy that allows employees, business partners and other users to use personally selected and purchased client devices to execute enterprise applications and access data. For most organisations, the programme is currently limited to smartphones and tablets, but the strategy may also be used for PCs and may include subsidies for equipment or service fees.

"With the wide range of capabilities brought by mobile devices, and the myriad ways in which business processes are being reinvented as a result, we are entering a time of tremendous change," said David Willis, vice president and distinguished analyst at Gartner. "The market for mobile devices is booming and the basic device used in business compared to those used by consumers is converging. Simultaneously, advances in network performance allow the personal device to be married to powerful software that resides in the cloud."

Mobile innovation is now driven more by consumer markets than business markets. Affordability is not only putting very powerful technology in the hands of consumers, but those consumers are also upgrading at a much faster rate. An organisation may better keep up with mobile technology advancements by aligning to the consumer, rather than the much slower pace of business technology adoption, with its long cycle of detailed requirements analysis, established refresh rates, and centralised procurement heritage. Consumers also enjoy equipment and domestic service pricing that often matches the best deals that an enterprise can get on behalf of its users.

In a BYOD approach, users are permitted certain access rights to enterprise applications and information on personally owned devices, subject to user acceptance of enterprise security and management policies. The device is selected and purchased by the user, although IT may provide a list of acceptable devices for the user to purchase. In turn, IT provides partial or full support for device access, applications and data. The organisation may provide full, partial or no reimbursement for the device or service plan.

"Just as we saw with home broadband in the past decade, the expectation that the company will supply full reimbursement for equipment and services will decline over time, and we will see the typical employer favour reimbursing only a portion of the monthly bill," said Mr Willis. "We also expect that as adoption grows and prices decline employers will reduce the amount they reimburse."

While BYOD programmes can reduce costs, they typically do not. As businesses look to drive ever more capability to the mobile device, the costs of software, infrastructure, personnel support and related services will increase over time. Once companies start including file sharing, business applications and collaboration tools, the costs to provide mobile services go up dramatically.

Gartner believes that IT's best strategy to deal with the rise of BYOD is to address it with a combination of policy, software, infrastructure controls and education in the near term; and with application management and appropriate cloud services in the longer term. Policies must be built in conjunction with legal and HR departments for the tax, labour, corporate liability and employee privacy implications. Gartner recommends that companies start with a standard policy that would apply anywhere, and create customised versions by country if necessary.

"BYOD is not for every company, or every employee. There will be wide variances in BYOD adoption across the world — by geography, industry and corporate culture," said Mr Willis. "Most programmes are at the employee's discretion — they decide if they want to opt in. For the vast majority of companies it is not possible to force all users into a bring your own (BYO) programme without substantial financial investments — and considerable support from senior management."

Despite the inherent challenges, Gartner believes that we are likely to see highly successful BYOD programmes in the coming years. Many businesses will expand beyond smartphones and tablets and embrace BYO for personal computers. Beyond PCs, it is likely that users will discover new uses for emerging devices not initially understood by IT planners, much like we saw with the iPad.

"It won't stop with bring your own PC," said Mr Willis. "Bring your own IT is on the horizon. Once these new devices are in the mix, employees will be bringing their own applications, collaboration systems, and even social networks into businesses."

Additional information is available in the Special Report "Bring Your Own Device: New Opportunities, New Challenges." The Special Report is available on Gartner's website at http://www.gartner.com/technology/research/ipad-media-tablet/bring-your-own-device.jsp.

Big Data Makes Organisations Smarter, But Open Data Makes Them Richer

Sat, 25 Aug 2012 00:00:00 +0200

Whereas "big data" will make organisations smarter, open data will be far more consequential for increasing revenue and business value in today's highly competitive environments, according to Gartner, Inc.

"Big data is a topic of growing interest for many business and IT leaders, and there is little doubt that it creates business value by enabling organisations to uncover previously unseen patterns and develop sharper insights about their businesses and environments," said David Newman, research vice president at Gartner. "However, for clients seeking competitive advantage through direct interactions with customers, partners and suppliers, open data is the solution. For example, more government agencies are now opening their data to the public Web to improve transparency, and more commercial organisations are using open data to get closer to customers, share costs with partners and generate revenue by monetising information assets."

Gartner analysts believe an open data strategy should be a top priority for any organisation that uses the Web as a channel for delivering goods and services. Open data strategies support outside-in business practices that generate growth and innovation. Enterprise architects help their organisation connect independent open data projects by creating actionable deliverables and information-sharing practices that generate business-focused outcomes for achieving strategic customer growth and retention objectives.

Gartner analysts said that any business that has a data warehouse should consider how it can use data as a strategic asset and revenue generator. Maturing technologies for data quality and data anonymisation can help mitigate regulatory restraints and risk factors. Open data APIs provide simple, Web-oriented means for data exchange, and linked data techniques are effective for generating big datasets. When considering the long-term benefits of an open data strategy, organisations should investigate the types of data exchange now emerging where information producers and consumers share data for profit or mutual gain.

Emerging data marketplaces are also places for organisations to open their data — potentially turning their "data into dollars." The challenge is to keep the barriers to entry low to enable participation by different types of business and streamlined processes for adding and vetting data sources. Monetising data is a technological and operational challenge. If an organisation's goal is to unlock its data's full revenue potential, it needs to be able to reach all possible data buyers efficiently.

"With tight budgets and continued economic uncertainty, organisations will need leaders who can craft breakthrough strategies that drive growth and innovation," said Mr Newman. "As change agents, enterprise architects can help their organisations become richer through strategies such as open data."

Although openness is a pervasive and persistent issue in IT, there is very little agreement about exactly what "open" means. According to Gartner analysts, an informal definition of openness is a level playing field where everyone plays a game that can evolve. There is a positive relationship between the openness of information goods (for example, code, data, content and standards) and information services (for example, services that offer information goods, such as the Internet, Wikipedia, OpenStreetMap and GPS) and the size and diversity of the community sharing them. From the viewpoint of enterprise information architects, this is known as the information-sharing network effect: the business value of a data asset increases the more widely and easily it is shared.

Open data APIs are a lightweight approach to data exchange. Their use is now considered a best practice for opening data and functionality to developers and other businesses. Organisations use APIs to generate new sources of revenue, spur innovation, increase transparency and improve brand equity.

"The challenge for organisations is to determine how best to use APIs and how an open data strategy should align with business priorities," Mr Newman said. "This is where enterprise architects can help. While some internal IT functions may be using APIs to fulfil local or specific application needs, the enterprise architecture process harvests and elevates good works as first-class strategic priorities that create business-focused outcomes. As a strategic enabler, APIs are a powerful means with which to build an ecosystem, and a first step toward monetising data assets."

Additional information is available in the Gartner report "Open for Business: Learn to Profit by Open Data." The report is available on Gartner's website at http://www.gartner.com/resId=1947015.

Organisations Are More Likely to Use SaaS for Sensitive Data Than for Mission-Critical Data

Sat, 25 Aug 2012 00:00:00 +0200

Avoiding the use of software as a service (SaaS) for critical or sensitive data remains a significant form of risk control for many organisations, according to Gartner, Inc. But those that do use SaaS for such data are more likely to use it for sensitive data than for mission-critical data.

These findings are based on Gartner's latest annual survey of the state of risk management programmes globally, which questioned 425 respondents from IT risk management disciplines in the US, UK, Germany and Canada from December 2011 to January 2012.
The survey results show that organisations take different approaches to risk management when confronted with a need or opportunity to share data with different types of external party.

Assessment Practices for External Parties
Survey respondents were asked if they had processes in place to assess external party security, risk management, compliance, privacy and BCP/DR for four different situations. Respondents answered: “Do not allow use for sensitive data or processes" almost twice as often in the case of business partners (38 per cent) as for platform as a service (PaaS) and infrastructure as a service (IaaS) (20 per cent).

Compared with PaaS/IaaS, organisations are about 30 per cent more likely to have a policy against putting sensitive data into SaaS (26 per cent), and about 45 per cent more likely to have a policy against putting it into outsourced data centres (29 per cent).

"These results make sense, given that sharing data with a partner almost certainly means that one or more of its employees will be accessing the data, while in a SaaS scenario, the data is typically only accessible to the primary customer," said Jay Heiser, research vice president at Gartner. "This year we asked about both data availability and data confidentiality policies. Survey respondents indicated 10 per cent less willingness to place mission-critical data into a SaaS offering than to place sensitive data into it. They were even less willing to place mission-critical data into outsourced data centres, with over one-third of respondents saying that they do not allow it."

Platform-as-a-Service/Infrastructure-as-a-Service Risk Assessment Practices
Only 57 per cent of IaaS/PaaS buyers are using a questionnaire to support their risk assessment, and unlike for SaaS, the questionnaire is more likely to be a proprietary one, unique to the buyer's organisation, and less likely to be based on standards. As in the case of SaaS, 26 per cent are also evaluating information from the provider. The most dramatic change over the past three years is the increased willingness to use IaaS and PaaS for sensitive processes.

Outsourced Data Centre Risk Assessment Practices
Thirty-six per cent of respondents said they had a policy against putting mission-critical data into an outsourced data centre, making avoidance the most chosen mechanism for dealing with data centre risk. The level of response for this choice is significantly higher than for either of the other two service models. Twenty-nine per cent said this policy applied to SaaS, and only 22 per cent said it applied to IaaS/PaaS.

"One of the biggest drivers is probably an expectation that the packaged service offerings, which typically claim to be based on cloud computing, are more reliable," said Mr Heiser. "While fault tolerance is a feature of many such offerings, we consider it premature to assume that mission-critical data is safer in a cloud than in a traditional data centre in which buyers usually make very specific choices about how data will be backed up."

The most significant reduction in the use of risk assessment practices has been in the practice of sending company staff to evaluate a partner's controls on-site, which has dropped by over 40 per cent over three years. Use of standards-based questionnaires has increased, while the use of proprietary surveys has dropped by the same degree, leaving the prevalence of questionnaires virtually the same.

Additional information is available in the report: "Survey Analysis: Assessment Practices for Cloud, SaaS and Partner Risks, 2012," which is available on Gartner's website at http://www.gartner.com/resId=2000315.

PC Market in Western Europe Declined 2.4 Per Cent in Second Quarter of 2012

Thu, 09 Aug 2012 00:00:00 +0200

PC shipments in Western Europe totalled 13.6 million units in the second quarter of 2012, a 2.4 per cent decline compared with the equivalent period in 2011, according to Gartner, Inc.

“Although we saw a slight uptake in mobile PC sales, the Western Europe PC market recorded weak overall PC shipments across all countries,” said Meike Escherich, principal analyst at Gartner.

In Western Europe, mobile PC shipments grew 4 per cent, while desk-based PC shipments declined 12.8 per cent in the second quarter of 2012. The professional PC market declined 5.3 per cent, while the consumer PC market was almost flat, with 0.4 per cent growth.

Despite losing market share, HP retained the No. 1 position in the Western Europe PC market in the second quarter of 2012 (see Table 1). Acer put in a strong performance, having resolved its inventory issues. Acer increased its market share by 2.7 percentage points, which helped it retain the No. 2 spot. Asus had the best performance among the top five vendors and moved up to No. 3.

Vendor	2Q12 Shipments	2Q12 Market Share (%)	2Q11 Shipments	2Q11 Market Share (%)	2Q11- 2Q12 Growth (%)
HP	2,760	20.2	3,171	22.7	-13.0
Acer	2,361	17.3	2,047	14.6	15.3
Asus	1,458	10.7	1,021	7.3	42.8
Dell	1,185	8.7	1,371	9.8	-13.6
Lenovo	1,057	7.8	961	6.9	10.0
Others	4,822	35.3	5,413	38.7	-10.9
Total	13,643	100.0	13,984	100.0	-2.4

“Asus excelled at diversifying its product portfolio, which includes mobile PCs and desk-based PCs, and it is now expanding into Ultrabooks and tablets, all of which are marketed at attractive prices,” said Ms Escherich. Dell struggled to increase its PC shipments and dropped to No. 4. Its transformation from a PC supplier to a solution provider for professional markets is ongoing and has yet to result in an increase in market share.

“Consumer spending on PCs has been stalled by the ongoing economic uncertainty. If demand, especially from consumers, remains weak there might be some old stock left in the channels ahead of the Windows 8 launch in October. This could lead to significant price cuts in September, and challenges may arise in selling new products into the channel in the third quarter of 2012,” said Ms Escherich.

Worldwide IT Outsourcing Services Spending on Pace to Surpass \$251 Billion in 2012

Tue, 07 Aug 2012 00:00:00 +0200

Worldwide spending for IT outsourcing (ITO) services is on pace to reach \$251.7 billion in 2012, a 2.1 per cent increase from 2011 spending of \$246.6 billion, according to the latest outlook by Gartner, Inc.

The fastest-growing segment within the ITO market is cloud compute services, which is part of the cloud-based infrastructure as a service (IaaS) segment. Cloud compute services are expected to grow 48.7 per cent in 2012 to \$5.0 billion, up from \$3.4 billion in 2011.

"Today, cloud compute services primarily provide automation of basic functions. As next-generation business applications come to market and existing applications are migrated to use automated operations and monitoring, increased value in terms of service consistency, agility and personnel reduction will be delivered", said Gregor Petri, research director at Gartner. "Continued privacy and compliance concerns may however negatively impact growth in some regions, especially if providers are slow in bringing localised solutions to market."

Data centre outsourcing (DCO), a mature segment of the ITO market that represented 34.5 per cent of the market in 2011, will decline 1 per cent in 2012. "The data centre outsourcing market is at a major tipping point, where various data centre processing systems will gradually be replaced by new delivery models through 2016. These new services enable providers to address new categories of clients, extending DCO from traditional large organisations into small or midsize businesses," said Bryan Britz, research director at Gartner.

The application outsourcing (AO) segment is expected to reach \$40.7 billion, a 2 per cent increase from 2011 spending of \$39.9 billion. This growth reflects organisations' needs to manage extensive legacy application environments and their commercial off-the-shelf packages that run the business.

"Change is afoot in the AO market. The burdens of managing the legacy portfolio, along with the limitations of IT budgets, have shifted the enterprise buyers to be cautious and favour a more evolutionary approach to other application services, such as software as a service (SaaS)," said Mr Britz. "New applications will largely be packaged and/or SaaS-deployed in order to extend and modernize the portfolio in an incremental manner. While custom applications will remain 'core' for many organisations, the trend in the next few years to SaaS enablement in the cloud will reflect in the growth of the AO outlook."

While there will be some impact from the ongoing business slowdown due to sovereign-debt issues in Europe and slowing exports in China, Gartner expects the ITO market in the emerging Asia/Pacific region to represent the highest growth of all regions.

A challenging economic scenario that worsened in late 2011 continues to affect the government policies and end-user sentiment in many key European countries, resulting in a forecast for Western Europe ITO growth decline of 1.9 per cent in US dollars during 2012. Reinvigorated economic pressure is delaying the willingness of many commercial organisations to focus on enhancing competitiveness rather than cost reduction. In addition, the European public sector will continue to see a cautious budget environment throughout 2012. This will force many central and local government entities to concentrate on outsourcing initiatives aimed at reducing IT cost through IT efficiencies and rationalisation.

Spending on ITO in the Asia/Pacific region will grow 1 per cent in US dollars in 2012 and exceed 2.5 per cent growth in 2013. With the exception of Japan, Australia, New Zealand, and to a lesser degree, Singapore and Hong Kong, the countries in Asia/Pacific are quite new in terms of outsourcing usage, understanding and sophistication. The growth is being driven by the large inflow of capital into Asia over the past three to five years, leading to the need among global and regional businesses to scale up their operations.

In North America, Gartner expects that buyers will seek to transition more IT work to annuity-managed service relationships for cost take-out and IT costs. This will keep ITO growing through 2016. Organisations' reluctance to hire or make large capital purchases, as well as their pursuit of asset-light IT strategies, continues to push clients toward consuming externally provided services.

Additional information is available in the report "Forecast Analysis: IT Outsourcing, Worldwide, 2010-2016, 2Q12 Update," which is available on Gartner's web site at http://www.gartner.com/resId=2092915.

Refusing to Communicate by Social Media Will Be as Harmful to Companies as Ignoring Phone Calls or Emails Is Today

Wed, 01 Aug 2012 00:00:00 +0200

As familiarity with social media grows, customers' expectations about how organisations will use these channels are evolving, according to Gartner, Inc. By 2014, organisations that refuse to communicate with customers by social media will face the same level of wrath from customers as those that ignore today's basic expectation that they will respond to emails and phone calls. For organisations that use social media to promote their products, responding to inquiries via social media channels will be the new minimum level of response expected.

“The dissatisfaction stemming from failure to respond via social channels can lead to up to a 15 per cent increase in churn rate for existing customers,” said Carol Rozwell, vice president and distinguished analyst at Gartner. “It’s crucial that organisations implement approaches to handling social media now. The effort involved in addressing social media commentary is not good cause to ignore relevant comments or solvable issues.”

However, not all comments on the social web are aimed directly at organisations. Gartner recommends that organisations develop a framework to deal with social media commentary on relevant topics. The framework must complement how an organisation deals with a direct enquiry received through social channels and should address whether a response is warranted, who should respond if it is, and what action is necessary following any response.

To respond or not?
Social media leaders must develop a process for deciding whether to respond to public or client-prompted social engagements. A person or team needs to have the power to decide whether a comment is relevant and whether the issue presented is solvable, or whether there are positive dimensions to what is being said that should be recorded.

It’s also important to accept that it’s impracticable and counterproductive to respond to everything. For example, if a comment is clearly inflammatory and unsolvable, it is usually best not to respond at all. However, if a person is an existing customer logging a harsh but legitimate complaint, the issue must be addressed publicly, promptly and within the same media it was made.

“Generally the best practice is to acknowledge the issue on social media, but to move attempts to resolve the issue offline,” said Ms Rozwell.

Who should respond?
Every organisation needs a set of rules to define who should deal with different kinds of comment, and a process for deciding how a response will be posted to social media. If no one has been identified to determine this set of rules, that is the first action to take. Then the designated social media leader or team must decide how to categorise comments. For example, some comments about a general issue may simply require monitoring and assessment before a general response is issued, whereas others may require an immediate and personal response and further monitoring.

It’s not enough simply to decide which people responds to what — the act of responding must be made part of their day job or it will be overlooked. It can be challenging to promote this shift in mindset, and it could require changes to performance metrics and job roles.

We’ve responded, now what?
Some organisations have implemented the first stages of a social media engagement process, but they make the mistake of treating engagements as ad hoc. While over half of organisations monitor social media, only 23 per cent collect and analyse data. This means that most organisations do not keep records of interactions occurring on social media and do not keep social profiles for people they have engaged with.

“It’s important not only to keep records of individual conversations, but constantly to analyse the interactions to see what insights can be gleaned from them,” said Ms Rozwell.

To ensure they are not discarding the valuable information being generated through social media, organisations must create processes for perpetuating customer engagements and for sharing social knowledge throughout the organisation. Developing a means for acting on social data will provide a competitive advantage by providing exceptional customer experience through increasingly significant social channels.

“We urge organisations to do three things. Firstly, participate — it’s important that organisations don’t let a fear of someone saying something bad about them stop them from participating in social media,” said Ms Rozwell. “Secondly, don’t assume all comments require the same level of attention — develop an appropriate response for the different types of interaction your business faces. Thirdly, plan for an increase in social commentary and adapt communications practices to cope — this will require changes to job descriptions, performance metrics and business processes.”

Consumers Will Spend \$2.1 Trillion on Technology Products and Services Worldwide in 2012

Thu, 26 Jul 2012 00:00:00 +0200

Consumers will spend \$2.1 trillion worldwide on digital information and entertainment products and services in 2012, according to Gartner, Inc. This amounts to a \$114 billion global increase compared with 2011, and spending will continue to grow at a faster rate than in the past, at around \$130 billion a year, to reach \$2.7 trillion by the end of 2016.

The \$2.1 trillion consists of consumer spending on mobile phones, computing and entertainment, media and other smart devices, the services required to connect these devices to the appropriate network, and the software and media content that are consumed via these devices.

"The three largest segments of the consumer technology market are, and will continue to be, mobile services, mobile phones and entertainment services," said Amanda Sabia, principal research analyst at Gartner. "There are two product classes, which in terms of absolute dollars are significantly smaller, but offer tremendous growth by 2016. These are mobile apps stores and e-text content. We fully expect consumers to more than triple their spending in these latter two categories by 2016."

Mobile services are expected to generate 37 per cent of total worldwide consumer technology spending in 2012 — that is \$0.8 trillion — rising to almost \$1 trillion by 2016. Mobile phones will account for 10 per cent of total spending in 2012 — that is \$222 billion — rising to almost \$300 billion by 2016. Similarly, entertainment services — cable, satellite, IPTV and online gaming, will account for 10 per cent of total consumer spending on technology products and services in 2012, at \$210 billion, rising to almost \$290 billion in 2016.

Gartner predicts that consumer spending on mobile apps stores and content will rise from \$18 billion in 2012 to \$61 billion by 2016, and that spending on e-text content (e-books, online news, magazines and information services) will rise from \$5 billion in 2012 to \$16 billion by 2016.

“Our research consistently shows that consumers are willing to pay for content they deem “worth it”,” Ms Sabia said. “However, our research has also found that consumers are willing to tolerate an ad-supported business model in exchange for free functions and content such as personal cloud storage, social networking, information searching, email, IM, person-to-person (P2P) voice (Skype and mobile voice over IP [VoIP]), streaming/downloading video and musical content when accessing the Internet."

The inter-relationships among the various segments are getting more critical. For example, new multidevice rate plans being announced by US mobile carriers are enabling consumers to get more from their devices. These persistent connections to more phones, tablets and mobile PCs will increase the value of entire ecosystem and will drive hardware sales. Partnerships among vendors in different segments are needed to build the bridges among the various platforms and deliver simpler solutions.

Additional information is available in the Gartner report "Market Trends: Worldwide Consumer Tech Spending." The report is available on Gartner's website at http://www.gartner.com/resId=2058016.

Worldwide IT Spending On Pace to Surpass \$3.6 Trillion in 2012

Tue, 10 Jul 2012 00:00:00 +0200

Worldwide IT spending is on pace to reach \$3.6 trillion in 2012, a 3 per cent increase from 2011 spending of \$3.5 trillion, according to the latest outlook by Gartner, Inc. Gartner's 2012 IT spending outlook has been revised up slightly from the 2.5 per cent projection last quarter.

Gartner's global IT spending forecast is relied upon by more than 75 per cent of the Global 500 companies in their key technology decisions. The market segments are analysed by more than 200 Gartner business and technology analysts who are located in all regions of the world. "While the challenges facing global economic growth persist — the eurozone crisis, weaker US recovery, a slowdown in China — the outlook has at least stabilised," said Richard Gordon, research vice president at Gartner. "There has been little change in either business confidence or consumer sentiment in the past quarter, so the short-term outlook is for continued caution in IT spending."

However, there are some bright spots for IT providers. In contrast to the rather lackluster growth outlook for overall IT spending, Gartner expects enterprise spending on public cloud services to grow from \$91 billion worldwide in 2011 to \$109 billion in 2012. By 2016, enterprise public cloud services spending will reach \$207 billion.

"Business process as a service (BPaaS) still accounts for the vast majority of cloud spending by organisations, but other areas such as platform as a service (PaaS), software as a service (SaaS) and infrastructure as a service (IaaS) are growing faster," Mr Gordon said.

Worldwide IT services spending is forecast to reach \$864 billion in 2012, a 2.3 per cent increase from 2011 (see Table 1). Demand for consulting services is expected to remain high due to the complexity of environments for global business and technology leaders. Gartner analysts said consulting itself is becoming increasingly technology-based with the rise of analytics and big data, having deep implications on the future of consulting services.

The global telecom services market continues to be the largest IT spending market. Telecom services growth is expected to come not only from net connections, especially in emerging markets, but also in mature markets from the uptake of multiple connected devices, such as media tablets, gaming and other consumer electronics devices.

	2011 Spending	2011 Growth (%)	2012 Spending	2012 Growth (%)	2013 Spending	2013 Growth (%)
Computing Hardware	404	7.4	420	3.4	448	6.6
Enterprise Software	269	9.8	281	4.3	301	6.9
IT Services	845	7.7	864	2.3	905	4.8
Telecom Equipment	340	17.5	377	10.8	408	8.3
Telecom Services	1,663	6.0	1,686	1.4	1,725	2.3
All IT	3,523	7.9	3,628	3.0	3,786	4.4

Consumers Will Store More Than a Third of Their Digital Content in the Cloud by 2016

Mon, 25 Jun 2012 00:00:00 +0200

The desire to share content and to access it on multiple devices will motivate consumers to start storing a third of their digital content in the cloud by 2016, according to Gartner, Inc. Gartner said that just 7 per cent of consumer content was stored in the cloud in 2011, but this will grow to 36 per cent in 2016.

"Historically, consumers have generally stored content on their PCs, but as we enter the post-PC era, consumers are using multiple connected devices, the majority of which are equipped with cameras. This is leading to a massive increase in new user-generated content that requires storage," said Shalini Verma, principal research analyst at Gartner. "With the emergence of the personal cloud, this fast-growing consumer digital content will quickly get disaggregated from connected devices."

The increased adoption of camera-equipped smartphones and tablets is allowing users to capture huge amounts of photos and videos. Gartner predicts that worldwide consumer digital storage needs will grow from 329 exabytes in 2011 to 4.1 zettabytes in 2016. This includes digital content stored in PCs, smartphones, tablets, hard-disk drives (HDDs), network attached storage (NAS) and cloud repositories.

The bulk of the cloud storage needs of consumers in the near term will be met by social media sites such as Facebook, which offer free storage space for uploading photos and videos for social sharing. Ms Verma said that while online backup services are the most well-known cloud storage providers, their total storage allocated to consumers and "prosumers" is small relative to that maintained by social media sites.

Average storage per household will grow from 464 gigabytes in 2011 to 3.3 terabytes in 2016. In 2012, Gartner believes that the adoption of camera-equipped tablets and smartphones will drive consumer storage needs. In the first half of 2012, a shortage in supply of HDDs as a result of the floods in Thailand provided an impetus for cloud storage adoption, leading to an unusual overall growth rate between 2011 and 2012.

Consumers are expected to first try the basic package that is offered free by online backup companies. These services will be offered as apps on tablets, smartphones and broadband-connected TV because of partnerships between original equipment manufacturers (OEMs) and online storage and sync companies. Cloud service providers (CSPs) will also increasingly offer cloud storage. The use of cloud online storage and sync services will provide the foundational experience for consumers to start using cloud storage as part of the personal cloud.

On-premises storage will remain the main repository of consumer digital content, although Gartner predicts that its share will progressively drop from 93 per cent in 2011 to 64 per cent in 2016 as the direct-to-cloud model becomes more mainstream. Cloud storage will grow at an aggressive pace during this period. A majority of this growth will come from North America and Western Europe. In the Asia/Pacific region, Japan and South Korea will witness the highest growth in cloud storage, where CSPs have been offering online storage and sync services for some years.

“Local storage will become further integrated with home networking, presenting opportunities for local storage providers to partner with home networking and automation service providers,” said Ms Verma. “Cloud storage will grow with the emergence of the personal cloud, which in turn will simplify the direct-to-cloud model, allowing users to directly store user-generated content in the cloud. As storage becomes a part of the personal cloud, it will become further commoditised. Therefore, online storage and sync companies need to have a strategic rethink about their future approach.”

Additional information is available in the Gartner report “Forecast: Consumer Digital Storage Needs, 2010-2016.” The report is available on Gartner’s web site at http://www.gartner.com/resId=1953315

Gartner Identifies Organisational Implications of the Rise of Mobile Devices

Sun, 17 Jun 2012 00:00:00 +0200

CIOs and IT leaders must address three key implications of the “post-PC” era, as workforces and consumers increasingly access IT applications and content through mobile devices, according to Gartner, Inc.

“The release of the iPhone five years ago marked a shift towards a mobile-dominated future,” said David Mitchell Smith, research vice president and Gartner Fellow. “With phones and tablets becoming a platform for the delivery of applications and information, and not simply a communications tool, the era of running applications solely on desktop and notebook PCs is rapidly being superseded by a fast-moving, diverse era of ecosystems that span consumer electronics, business computing, fixed-location clients and mobile clients.”

Gartner analysts identify three key implications of this shift and offer advice to help IT leaders and application development professionals prepare.

IT organisations must rapidly evolve mobile applications and interfaces to meet sharp increases in demand across B2B, B2E and B2C channels

“This shift in computing to mobile devices, and the ongoing trends of consumerisation and 'bring your own device', mean that IT leaders and application development teams need to take a multichannel approach to applications across business-to-business [B2B], business-to-employee [B2E] and business-to-consumer [B2E] channels. Too many IT departments and end users still assume that only desktop applications are needed,” said Mr Smith.

Gartner recommends:

Performing a mobile-only, mobile-first or legacy assessment during application development.
Identifying specific demand for mobile applications in B2E, B2C and B2B sectors during the next 18 months.
Implementing an architectural and tool framework for future context-aware apps.

Application developers need to retool as mobile-centric design replaces desktop-centric design for user interfaces

“The exploding interest in, and use of, mobile devices across consumer and business markets means that mobile interfaces are setting expectations for the usability, appearance and behaviour of future systems and applications,” said Mr Smith. “The leading edge of this change is the touch-and-gesture interface that is fundamental to mobile devices, but beyond this both audio and video channels are being used to expand this new user interface [UI]. Spoken commands drive searches and application actions, while the emerging video channel is leading to facial recognition and in-air gestures.”

Gartner recommends:

Tracking advances in new UI techniques (such as touch, audio, video, gestures, search, social and context) and creating a road map for short-term, medium-term and long-term potential.
Factoring in ensemble interactions where applications integrate the experience across multiple devices into application architectures.
Building applications with simple, focused capabilities and interactions, but also creating links across applications for coordinated operation.

Organisations need to reallocate resources as mobile advertising projects targeting smartphones and tablets will outnumber native PC projects by four to one by 2015

“When building UIs for multiple screen sizes and operating systems, new tools are needed to make applications function correctly on different devices. There’s no automatic way to do this — it takes engineering skills to design the right outputs,” said Mr Smith.

Gartner recommends:

Making tactical investments in mobile application development tools.
Enhancing (automated) testing and support plans.
Using HTML5 as the lowest common denominator cross-device and cross-vendor UI model, though you should not expect HTML to address all needs.

Additional information is available in the Gartner report "Mobile Applications and Interfaces: New Approaches for a Multichannel Future,” which is available on Gartner's web site at http://www.gartner.com/resId=1920114.

Gartner Identifies Five Tactics to Protect IT Investment Funding

Wed, 13 Jun 2012 00:00:00 +0200

Almost every CIO identifies reducing operational expenditure and increasing the amount spent on IT investments as a top priority. However, many fail to manage properly the operational costs of IT investment in new programmes, which can erode investment funding, according to Gartner, Inc.

"Organisations that overspend on operational activity have little money left to invest in new projects. Without reinvestment, organisations cannot restructure and optimise their operational spending," said Stewart Buchanan, research vice president at Gartner. "This results in rising non-discretionary costs, which in turn result in further underinvestment, lack of competitiveness, failing client service and loss of revenue. This makes future spending even less affordable and even less avoidable. Programme and project managers need to break their organisation out of this spiral of terminal decline."

To help CIOs and IT professionals avoid this spiral, Gartner has identified five tactics to help manage IT investment in new programmes.

Diagnose the investment challenges your organisation faces and change governance to improve the way they are managed.

The cost of a new project's implementation, and the ongoing operational expenditure derived from it, are often treated separately. It's imperative to link project and operational spending together and not manage them in silos. If the increase in operating costs from new projects is not sustainable, it can drain IT budgets and reduce the scope for future investments, leading to a downward spiral.

Keep a log of nasty surprises your organisation has faced in budget management. Plan ways to detect and avoid similar events in future.

Hidden costs can be most dangerous. In many organisations, particularly in Europe, the Middle East and Africa, it is now mandatory to forecast future operating costs in project plans. However, over optimism is still widespread when it comes to planning. Common misjudgements in planning new projects include: underestimating support costs because a new kind of service has never been managed before; dependency on sole suppliers, which then raise costs; failure to account for demand shifts.

Create a single portfolio view of assets, services and project spending.

Link project and operational spending management by removing silos. One way may be to require service managers and project managers to work together on business case approval. When working on business case approvals, ensure that new operating expenditures are identified through a total cost of ownership analysis. It is also important to create a process that funds new operational expenditure resulting from projects — some companies already provide a budget for operational spending as part of their project costs.

Plan asset and service lifecycles to identify when investment is needed.

New projects and the assets or services they create are often seen as being very valuable to organisations. However, this value tends to depreciate, and this process does not stop at zero because IT assets and services usually cost money to support, maintain and retire. For example, many IT assets or services contain data that must remain readable to ensure legal and regulatory compliance. Whether the decision is to replace, refresh or retire these assets or services, it can involve unforeseen expenditure that can eat away at IT budgets. Without proper lifecycle planning the organisation may be unaware of cost implications and fail to plan for them. The result is that money badly needed for strategic projects may end up being used to "take out the trash."

Plan for success by agreeing how wider deployments will be paid for (for example, through chargeback, contingency funding or further projects).

Often IT is expected to deliver "more with less", and achieve exponential increases in computing power. However, many IT organisations are at a point where it is time to deliver "less with less", if there remains a business goal to continue reducing IT spending. The success of a project can have the effect of increasing demand. Therefore, it is just as important to manage demand for a service or asset as it is to manage the project itself. Otherwise, efficiencies and savings can be wiped out and funding for future projects jeopardised.

Worldwide External Controller-Based Disk Storage Market Grew 8 Per Cent in First Quarter of 2012

Thu, 07 Jun 2012 00:00:00 +0200

Worldwide external controller-based (ECB) disk storage vendor revenue totalled \$5.4 billion in the first quarter of 2012, an 8 per cent increase from revenue of \$5 billion in the first quarter of 2011, according to Gartner, Inc. The first quarter of 2012 was the 10th consecutive quarter of revenue growth, and its results met Gartner's expectations of an 8 per cent year-over-year increase.

"Revenue by host interface protocol and regional geography varied from Gartner's 4Q11 forecast update," said Roger Cox, research vice president at Gartner. "Block-access host interface notably associated with SAN infrastructures came in at 4 per cent year-over-year growth in vendor revenue against a forecast of 5.2 per cent, while file-access beat the Gartner forecast with 22.9 per cent year-over-year growth, four percentage points higher than Gartner's forecast."

While there may have been occasions when the ECB disk storage vendors were unable to secure a specific hard-disk drive (HDD) capacity, the issues presented by the October 2011 Thailand flood are largely behind them. HDD pricing for ECB disk storage systems remains above preflood levels on a per-terabyte basis.

With a 2.4 per cent market share increase in the first quarter of 2012, EMC continued to dominate the market. Observing that 21.9 per cent of its total ECB disk storage revenue came from recent acquisitions (Data Domain, Avamar and Isilon), EMC was No. 1 in the worldwide ECB disk storage market (download Table 1 below this page).

Both NetApp and Dell also gained share in the first quarter of 2012. Dell's ECB disk storage acquisition strategy is beginning to pay off for it, with 73.5 per cent of its ECB disk storage revenue being produced by its EqualLogic PS series and by the Dell Compellent Storage Center platform. Relying on the proven value propositions of its core Data ONTAP technology, NetApp was one of three vendors to achieve share gains in the first quarter of 2012.

Hitachi/HDS increased its VSP platform revenue by 24.5 per cent in the first quarter of 2012 compared with the same period a year earlier, increasing its high-end enterprise (aka monolithic frame-based) market share by 6.3 percentage points. With a 42.9 per cent year-over-year increase in revenue, Oracle's ZFS storage appliance was just one of two vendors to gain share in the network attached storage (NAS) market in the first quarter. Although it lost 0.7 percentage points of market share, IBM increased its percentage of internally developed ECB disk storage platforms to 70.4 per cent of its total first-quarter 2012 revenue, up 9 percentage points over the first quarter of 2011. HP's 3PAR, which grew 137.4 per cent year-over-year, was HP's lone first-quarter 2012 highlight as EVA, P4000 LeftHand, and the P2000 MSA series continued to decline.

With 17.1 and 14.1 year-over-year vendor revenue growth, the Latin America and North America regions did exceptionally well compared with Gartner forecast expectations, while the Asia/Pacific region, at only 4.1 per cent year-over-year growth, and Japan, with a 12.3 per cent decline, fell far short.

Gartner ECB disk storage reports reflect revenue from new vendor-branded hardware only, as well as hardware revenue associated with financial leases and managed services. Optional and separately priced storage software revenue and storage area network infrastructure components and used ECB disk storage systems are excluded.

Additional information on the ECB disk storage market is available in Gartner's "Quarterly Statistics: Disk Array Storage, All Regions, All Countries, 1Q12 Update." The report includes vendor market share by data access method, price band, sales channel and operating-system segmentation. The report is available on Gartner's web site at http://www.gartner.com/resId=2035115.

Monitoring Employee Behaviour in Digital Environments is Rising

Tue, 29 May 2012 00:00:00 +0200

Monitoring employee behaviour in digital environments is on the rise, with 60 per cent of corporations expected to implement formal programs for monitoring external social media for security breaches and incidents by 2015, according to Gartner, Inc. Many organisations already engage in social media monitoring as part of brand management and marketing, but less than 10 per cent of organisations currently use these same techniques as part of their security monitoring programme.

“The growth in monitoring employee behaviour in digital environments is increasingly enabled by new technology and services,” said Andrew Walls, research vice president of Gartner. “Surveillance of individuals, however, can both mitigate and create risk, which must be managed carefully to comply with ethical and legal standards.”

To prevent, detect and remediate security incidents, IT security organisations have traditionally focused attention on the monitoring of internal infrastructure. The impact of IT consumerisation, cloud services and social media renders this traditional approach inadequate for guiding decisions regarding the security of enterprise information and work processes.

“Security monitoring and surveillance must follow enterprise information assets and work processes into whichever technical environments are used by employees to execute work,” said Mr Walls. “Given that employees with legitimate access to enterprise information assets are involved in most security violations, security monitoring must focus on employee actions and behaviour wherever the employees pursue business-related interactions on digital systems. In other words, the development of effective security intelligence and control depends on the ability to capture and analyse user actions that take place inside and outside of the enterprise IT environment.”

The popularity of consumer cloud services, such as Facebook, YouTube and LinkedIn, provides new targets for security monitoring, but surveillance of user activity in these services generates additional ethical and legal risks. There are times when the information available can assist in risk mitigation for an organisation, such as employees posting videos of inappropriate activities within corporate facilities. However, there are other times when accessing the information can generate serious liabilities, such as a manager reviewing an employee's Facebook profile to determine the employee's religion or sexual orientation in violation of equal employment opportunity and privacy regulations.

“The conflicts involved were highlighted through recent examples of a small number of organisations requesting Facebook login information from job candidates,” said Mr Walls. “Although that particular practice will gradually fade, employers will continue to pursue greater visibility of social media conversations held by employees, customers and the general public when the topics are of interest to the corporation.”

A wide range of products and services have emerged to support these actions and many PR organisations provide social media monitoring as a standard client service. Security organisations are beginning to see value in the capture and analysis of social media content, not just for internal security surveillance, but also to enable detection of shifting threats that impinge on the organisation. This might be physical threats to facilities and personnel revealed through postings concerning civil unrest or it may be threats of logical attacks by hacktivists. Early detection of shifting risks enables the organisation to vary its security posture to match and minimise negative impacts.

“The problem lies in the ability of surveillance tools and methods to produce large volumes of irrelevant information,” said Mr Walls. “This personal information can be exposed accidentally or become the target of voyeuristic behaviour by security staff.”

There are a number of important issues that also need to be considered. While automated, covert monitoring of computer use by staff suspected of serious policy violations can produce hard evidence of inappropriate or illegal behaviours, and guide management response, it might also violate privacy laws. In addition, user awareness of focused monitoring can be a deterrent for illicit behaviour, but surveillance activities may be seen as a violation of legislation, regulations, policies or cultural expectations. There are also various laws in multiple countries that restrict the legality of interception of communications or covert monitoring of human activity.

Additional information is available in the report: "Conduct Digital Surveillance Ethically and Legally: 2012 Update," which is available on Gartner's web site at http://www.gartner.com/resId=1965315.

Worldwide Mobile Payment Transaction Value to Surpass \$171.5 Billion

Tue, 29 May 2012 00:00:00 +0200

Worldwide mobile payment transaction values will surpass \$171.5 billion in 2012, a 61.9 percent increase from 2011 values of \$105.9 billion, according to Gartner, Inc. The number of mobile payment users will reach 212.2 million in 2012, up from 160.5 million in 2011.

"We expect global mobile transaction volume and value to average 42 percent annual growth between 2011 and 2016, and we are forecasting a market worth \$617 billion with 448 million users by 2016," said Sandy Shen, research director at Gartner. "This will bring opportunities for service and solution providers who will need to cater to the local demand patterns to customize their offerings."

The mobile payments market will experience fragmented services and solutions for the next two years. Technology providers will have to cater their solutions to the local market that will be using different access technologies, business models and partners, and under different regulatory conditions.

"There will be a few global players that have the scale and resources to serve large customers and the mass market whose requirements can be readily satisfied by standard solutions," Ms. Shen said. "However, there will always be segments that cannot be sufficiently served by the global players. The demand of these segments can only be satisfied by specialized or local players who can better understand the segment and have specific solutions to meet the unique challenges.

SMS remains the dominant access technology in developing markets because of the constraints of mobile devices and the ubiquity of SMS. Web/WAP is the preferred access technology in North America and Western Europe where mobile Internet is commonly available and activated on user devices. Gartner expects Web/WAP access to account for about 88 percent of total transactions in North America and about 80 percent in Western Europe by 2016. Near Field Communication (NFC) transactions will remain relatively low through 2015, although growth will start to pick up from 2016.

"NFC payment involves a change in user behavior and requires collaboration among stakeholders that includes banks, mobile carriers, card networks and merchants," said Ms. Shen. "It takes time for both to happen, so we don't expect NFC payments to come into the mass market before 2015. In the meantime, ticketing, rather than retail payment, will drive NFC transactions."

Merchandise purchases will drive transactions in North America and Western Europe. These will include e-commerce purchases where users buy online, as well as in-store purchases. Major e-tailers such as Amazon and eBay have developed strong mobile storefronts and have seen significant growth from the mobile channel. For in-store purchases, Starbucks' Card Mobile app is now being rolled out nationwide in the U.S., following a successful pilot program, and Gartner expects a large number of merchants to introduce their own mobile payment services, trying to emulate Starbucks' success.

In developing markets, money transfer and airtime top-ups will account for most transaction volume, and money transfers will account for the largest portion of the transaction value because of the demand for secure and efficient ways of storing and transferring money.

Ticketing/parking also appeals across many markets because it can improve efficiency in transacting, as well as offering user convenience. In developing markets, such as Africa and South Asia, users can buy bus and railway tickets using a mobile payment service so that they can secure tickets earlier where tickets are often in short supply.

Gartner projects that Eastern Europe will see the highest user growth between 2011 and 2016, albeit from a smaller user base. Asia/Pacific tops all regions in the number of users, followed by Africa. This also contributes to high transaction volume, where the two regions combined will account for more than 60 percent of the global mobile payments volume in 2016. Africa tops all regions in transaction value throughout the forecast period, benefiting from a higher proportion of money transfer transactions that have higher value per transaction than other use cases. North America is the third-largest region by value in 2016 and is twice the value of Western Europe.

Additional information is available in the Gartner report "Forecast: Mobile Payment, Worldwide, 2009-2016." The report is available on Gartner's website at http://www.gartner.com/resId=2010515.

Worldwide IT Outsourcing Market Grew 7.8 Per Cent in 2011

Mon, 21 May 2012 00:00:00 +0200

Worldwide IT outsourcing (ITO) revenue totalled \$246.6 billion in 2011, a 7.8 per cent increase from 2010 revenue of \$228.7 billion, according to Gartner, Inc. Indian-based IT services providers and providers rooted in cloud-based services delivered the highest growth rates in 2011.

"Revenue cannibalisation resulting from client adoption of industrialised, and often cloud-based, services risks muting the growth opportunities for the ITO providers that are heavily weighted in infrastructure outsourcing," said Bryan Britz, research director at Gartner. "Strategies will vary as clients are likely to pursue hybrid cloud strategies requiring providers to deliver some asset-light and some asset-heavy offerings — which will result in varying growth trajectories among competitors over the next several years."

IBM maintained the No. 1 position, as its revenue grew 7.8 per cent, and its revenue accounted for 10.9 per cent of ITO revenue (see Table 1). IBM was the No. 1 ranked provider in all regions. HP grew below the market growth rate, but retained the No. 2 worldwide market share position with 6.1 per cent market share. Fujitsu, helped by currency gains, overtook CSC for the No. 3 worldwide market share position in 2011.

Forty-three providers booked 2011 revenues of \$1 billion or more. This group of providers collectively grew by 9.5 per cent during 2011. After excluding India-based IT services providers, cloud-centric providers, and providers that made sizable acquisitions during the year, the remaining group of large ITO providers grew by only 6.5 per cent during 2011.

Table 1
Worldwide Top 5 ITO Providers by Revenue Market Share, 2011 (Millions of Dollars)

Worldwide Application Infrastructure and Middleware Market Revenue Grew 10 Per Cent in 2011

Tue, 01 May 2012 00:00:00 +0200

The worldwide application infrastructure and middleware (AIM) software revenue market* totalled \$19.3 billion in 2011, a 9.9 per cent increase from 2010, according to Gartner, Inc. In 2010, worldwide AIM revenue grew 7.3 per cent and reached \$17.6 billion.
"Application infrastructure and middleware projects increasingly span on-premises, cloud and external business partners,” said Fabrizio Biscotti, research director at Gartner. ”The impacts of using multiple delivery models, increased reliance on governance technologies, and convergence of application and data integration requirements are driving organisations to sustain significant investment in AIM technologies and skills.”

”Cloud computing is increasingly becoming mainstream and gaining traction in the market. Middleware vendors should leverage their expertise to offer competitive cloud services in addition to on-premises software products,” said Mr. Biscotti. “Although the transition from on-premises to cloud computing will take an extended period of time, the demand for hybrid use of platform technologies is present now, and is projected to grow rapidly during the next two to four years. End users can judge the long-term viability of a platform as a service (PaaS) provider in part by its ability to attract independent software vendors (ISVs) and other partners into its ecosystem.”

IBM retained its leadership position, as it increased its market share to 32.1 per cent (see Table 1). Despite difficult market conditions, the top five vendors showed solid growth. This growth was driven through acquisitions and organic growth.

Table 1

Worldwide Vendor Revenue Estimates for Total AIM Software, 2011 (Millions of US Dollars)

Vendor	2011	2011	2010	2010	2010-2011
Vendor	Revenue	Market Share (%)	Revenue	Market Share (%)	Growth (%)
IBM	6,222.8	32.1	5,537.4	31.4	12.4
Oracle	3,250.1	16.8	2,995.7	17.0	8.5
Microsoft	977.5	5.0	875.4	5.0	11.7
Software AG	646.7	3.3	601.0	3.4	7.6
TIBCO	555.0	2.9	500.0	2.8	11.0
Others	7,737.9	39.9	7,136.7	40.4	8.4
Total	19,389.97	100.0	17,646.27	100.0	9

Several segments showed a double-digit growth rate including application servers, where the performance of application PaaS vendors has been strong. Service oriented architecture (SOA) governance technologies, portal products and user interaction tools also performed well.

“Business process management (BPM) suites continued to grow at a sustained pace as some providers are evolving their offerings into next-generation application infrastructure platforms that Gartner defines as iBPMSs. These platforms address the growing need to account for social interactions, mobility and decision management in the process management context,” said Mr Biscotti.

“North America and Western Europe are the largest regional markets, followed by mature Asia/Pacific countries. Emerging regions have grown fastest due to solid performance in Latin America and Asia/Pacific,” said Asheesh Raina, principal research analyst at Gartner.
As companies in Asia/Pacific continue to embrace IT to improve productivity and drive growth - AIM technologies witnessed high sustainable growth that was complimented by the favourable economic conditions. Almost all AIM segments experienced growth in Asia/Pacific, but “appliances-AIM” grew fastest albeit from a lower revenue base. The primary drivers have been domestic demand, growing maturity of users and incremental enhancements in AIM technology.

“Despite the weak economy, particularly in the world’s largest economies, there are no signs that the growth we have seen in the AIM market for several years is faltering,” said Mr Raina. “On the contrary, the need for cost containment and increased efficiency are pushing organisations to adopt solutions that can solve specific business problems. This explains the market influx of specialists in areas such as low- latency messaging (LLM), managed file transfer (MFT), complex event processing (CEP) and in-memory data grids.”

Additional information is available in the Gartner report "Market Share Analysis: Application Infrastructure and Middleware Software, Worldwide, 2011." The report is on Gartner's web site at http://www.gartner.com/resId=1992415.

Customer Experience Enters Top 10 CIO Technology Priorities for 2012

Tue, 24 Apr 2012 00:00:00 +0200

CIOs ranked customer relationship management (CRM) as their No. 8 technology priority for 2012, according to a global survey of CIOs by Gartner, Inc.'s Executive Programs. CRM moved up from the No. 18-ranked technology in 2011.

Additionally, Gartner’s 2012 CEO Survey found that CEOs cited CRM as their most important area of investment to improve their business over the next five years.

“The focus on the customer is increasingly important for business leaders, despite times of continued economic uncertainty and government austerity,” said Jim Davies, research director at Gartner. “Effective leaders use technology to strengthen the customer experience regardless of the economic environment, and they see customers as the key factor in helping their business deliver growth and operational efficiency in 2012. They also understand that a new strategy is needed to embrace social and media trends.”

“In 2012, CRM executives are faced with the challenge of taking ‘social’ more seriously — not as ‘just another channel,’ but as a whole new way of doing business,” said Ed Thompson, vice president and distinguished analyst at Gartner.

Gartner predicts that by 2014, refusing to communicate with customers via social channels will be as harmful to the relationship as ignoring their emails or phone calls is today.

“Our discussions with service providers and end users indicate that CRM services are shifting from a focus on point solution deployment centered on application suites, to a ‘customer experience’ that brings together customer information, analytics, workflows, mobility and social CRM disciplines into a richer, multichannel access to capture the entire customer journey,” Mr. Thompson said.

Gartner said worldwide CRM software revenue reached \$12 billion in 2011, a 13.5 percent increase from 2010, and it is forecast to grow 7 percent in 2012. Gartner analysts added that a growing percentage of this revenue is accrued through software as a service (SaaS) and cloud computing.In 2011, SaaS accounted for 32 percent of the CRM software market and is expected to grow 16 percent in 2012.

As competition intensifies, service providers will either have to grow their own CRM practice to incorporate cloud computing, social CRM, digital media and mobility – or they will have to form partnerships with specialist vendors. Service providers that are still focusing on traditional on-premises CRM solutions today will gradually lose out to the competition during the next one to two years.

“We recommend organizations view 2012 as a year to revisit their CRM strategy. The potentially disruptive impact of cloud, big data, social and mobile cannot be overlooked,” said Mr. Davies.
Gartner analysts will further discuss the development of customer experience and service, mobile and social CRM at the Gartner Customer Strategies & Technologies Summit 2012, held from June 11 to 12 in London, U.K. For further information about Summit, please visit www.gartner.com/eu/crm.

Gartner CEO Survey Shows 2012 is the Year of Living Hesitantly

Mon, 16 Apr 2012 00:00:00 +0200

2012 is the year of living hesitantly, as 85 per cent of CEOs surveyed said they believe their organisations will be impacted by an economic downturn in 2012, according to Gartner, Inc.

The Gartner CEO and senior business executive survey of more than 220 CEOs in user organisations from more than 25 countries was conducted in November and December of 2011. Qualified organisations were those with annual revenue of \$500 million or more. The survey results show that many CEOs believe that an economic downturn will impact their companies in 2012. Although concerns are less severe in Asia/Pacific and North America than in Europe and Africa, it is the dominant point of view within each of the three geographies.

“Costs are now the second biggest priority area, the highest ranking in our surveys since 2009,” said Mark Raskino, vice president and Gartner fellow. “Yet, CEOs seem determined to maintain a growth posture as the No. 1 priority for now, and geographic expansion is the primary growth approach.”

While the economy is certainly a concern for chief executives, the survey results showed by a ratio of more than two to one that CEOs said they will increase IT investment in 2012, rather than cut it.

“The intention to invest in technology is comparatively healthy,” said Jorge Lopez, vice president and distinguished analyst at Gartner. “The newer trends, such as mobile and cloud, are rising to the foreground of CEO’s attention. However, CRM remains CEOs’ favourite IT capability because marketing is a never-ending competitive quest for customer retention.”

Gartner analysts said the difficulty with investing in newer technologies for strategic outcomes is that organisations need the right kinds of leadership and change management. Many business leaders learned the hard way in the 1990s and 2000s that simply buying and installing technology doesn’t deliver results if it’s not carefully directed and delivered in conjunction with coordinated changes to policies, processes, organisation, roles and culture.

“More purposeful, structured innovation management could be one way to make technology investments pay off,” Mr Raskino said. “We see strong CEO intention toward improving it in most sectors, but not in financial services — where, perhaps, regulatory compliance is simply overwhelming all other strategic change thinking.”

Ninety per cent of CEOs can name a company they admire for its use of IT in gaining a competitive advantage, but when restricted to their own industry, a quarter cannot. Apple easily eclipsed everyone as the most admired company for its use of IT, as it accounted for 39 per cent of the responses. Google was second with 11 per cent share, followed by Amazon at 5.8 per cent.

The survey results showed that CEOs are advancing innovation management, but many face a digital business strategy gap. This year, Gartner probed investment attitudes toward innovation management and leadership attribution. Overall, innovation management is advancing with few CEOs cutting innovation, and approximately half the CEOs saying they are investing more. However, a quarter indicated that they still don't address it as an explicit discipline. When Gartner asked who leads innovation in their firms, approximately one-third of the CEOs selected themselves. After that, a wide variety of executive and senior management leaders were named, however CIOs were rarely identified, and CFOs were never identified.

“Any CEO who believes that he or she is the innovation leader of the firm must retain a close direct working relationship with the CIO in this age of rapid business digitisation, or risk being blindsided,” Mr Lopez said. “CIOs must improve IT-related competitor intelligence, and use that information to build a productive relationship with the person the CEO sees as the leader of innovation.”

Most CEOs know what new information they need now and in the future, so their CIOs must keep pace. In this year's survey, Gartner asked the: "If there was one additional piece of information you could use, what would it be?" Nearly all the CEOs had a specific answer close at hand. Most were in the areas of customer and sales information or competitor information. Gartner also asked CEOs what new kinds of information will disrupt their industries during the next five years. About half the CEOs could not give a good answer; however, the other half provided a wide range of ideas, demonstrating that thinking about the new kinds of information that technology will make available is a potential source of competitive advantage between firms.

“CIOs and CEOs should discuss with each other what new information would help them manage the business better through uncertain economic times,” Mr Raskino said. “We know most companies have weak management formalism over information strategy and governance; however, information variety, complexity and volume are rising exponentially. Muddling through without discipline will soon start to leave major companies vulnerable to new entrant competition. CIOs should spearhead the development of an information strategy for their firms, concentrating, in particular, on new kinds of information that might lead to industry disruptions and transformations.”

The survey results showed most CEOs still regard their CIOs as itinerant specialists. The role needs development attention. The CFO was, by far, the most cited close strategy advisor to the CEO in the survey, while CIOs were rarely mentioned. In an age of such digital disruption to business, many CIO roles remain underinvested. Most CEOs thought the best next step for their CIOs would be to do the same job in the same industry or in another industry. Few thought they would move on to a business leadership role.

“CEOs should re-examine the role the CIO plays today in business innovation and strategy,” Mr Lopez said. “As the Information Age progresses, the risk of being blindsided by new forms of digital competition is rising.”

Additional information is available in the Gartner report “CEO Survey 2012: The Year of Living Hesitantly”. The report is available on Gartner’s web site at http://www.gartner.com/resId=1957515.

Worldwide Media Tablets Sales to Reach 119 Million Units in 2012

Tue, 10 Apr 2012 00:00:00 +0200

Worldwide media tablet sales to end users are forecast to total 118.9 million units in 2012, a 98 per cent increase from 2011 sales of 60 million units, according to Gartner, Inc.

Apple's iOS continues to be the dominant media tablet operating system (OS), as it is projected to account for 61.4 per cent of worldwide media tablet sales to end users in 2012 (see Table 1). Despite the arrival of Microsoft-based devices to this market, and the expected international rollout of the Kindle Fire, Apple will continue to be the market leader through the forecast period.

"Despite PC vendors and phone manufacturers wanting a piece of the pie and launching themselves into the media tablet market, so far, we have seen very limited success outside of Apple with its iPad," said Carolina Milanesi, research vice president at Gartner. "As vendors struggled to compete on price and differentiate enough on either the hardware or ecosystem, inventories were built and only 60 million units actually reached the hands of consumers across the world. The situation has not improved in early 2012, when the arrival of the new iPad has reset the benchmark for the product to beat."

"It appears that this year competitors have waited to see what Apple would bring out — because there were very few announcements of new media tablets at either the Consumer Electronics Show or Mobile World Congress. Many vendors will wait for Windows 8 to be ready and will try to enter the market with a dual-platform approach, hoping that the Microsoft brand could help them in both the business and consumer markets."

OS	2011	2012	2013	2016
iOS	39,998	72,988	99,553	169,652
Android	17,292	37,878	61,684	137,657
Microsoft	0	4,863	14,547	43,648
QNX	807	2,643	6,036	17,836
Other OS	1,919	510	637	464
Total	60,017	118,883	182,457	369,258

Microsoft tablets are projected to account for 4.1 per cent of media tablet sales this year, and grow to 11.8 per cent of sales by the end of 2016. Windows 8 is Microsoft's official entrance into the media tablet market.

"IT departments will see Windows 8 as the opportunity to deploy tablets on an OS that is familiar to them and with devices offered by many enterprise-class suppliers," Ms Milanesi said. "This means that we see Windows 8 as a strong IT-supplied offering more so than an OS with a strong consumer appeal."

Gartner analysts said enterprise sales of media tablets will account for about 35 per cent of total tablet sales sold in 2015. These sales will not be clearly defined as enterprise purchases. Gartner expects organisations to allow tablets as part of their buy your own device (BYOD) programme. More of these tablets will be owned by consumers who use them at work.

"This poses a big threat to vendors that thought about focusing on the enterprise market who will now have to become appealing to consumers as well," Ms Milanesi said. "This is exactly the same trend that vendors such as RIM had to face in the smartphone market. The difference here is that tablets have been created for consumers first and then relied on an ecosystem of apps and services that make them more manageable in the organisation. When the deployment will come from the IT department we believe that operating systems such as Windows 8 will have an advantage as long as they are not seen as a compromise in usability for the users."

Android tablets are forecast to account for 31.9 per cent of media tablet sales in 2012. Gartner analysts said the main issue with Android tablets has been the lack of applications that are dedicated to tablets and therefore take advantage of their capabilities. Gartner's consumer survey data shows that consumers are running many of their apps on their mobile phones and their tablets.

Gartner's detailed market forecast data is available in the report, "Forecast: Media Tablets by Operating System, Worldwide, 2010-2016, 1Q12 Update." The report is on Gartner's website.

Gartner's Special Report, "iPad and Beyond: The Future of the Tablet Market," provides insight into what consumers, enterprises and vendors can expect as the market continues to unfold. More than 20 reports examine the tablet marketplace, as well as video commentary. The Special Report is available here.

Worldwide IT Spending Figures Show Mixed Results for 2012

Thu, 05 Apr 2012 00:00:00 +0200

Worldwide IT spending is forecast to total \$3.7 trillion in 2012, a 2.5 per cent increase from 2011, according to the latest outlook by Gartner, Inc. This is down from Gartner's previous forecast of 3.7 per cent growth for 2012.

Gartner analysts said the lower growth rate has more to do with the US currency than an actual decline in spending. The recent strengthening in the value of the US dollar versus other currencies has resulted in the reduced growth rate. However, when looking at spending in constant US dollars, Gartner analysts said IT spending is on pace to increase 5.2 per cent in 2012, up from its previous projection of 4.6 per cent.

"Despite ongoing concerns about the global economic recovery — most notably around the resolution of eurozone sovereign-debt problems, worries about the potential for China's real estate 'bubble' to spillover and affect the rest of the economy and rising oil prices — early signs in 2012 suggest that the global economic outlook has brightened a little," said Richard Gordon, research vice president at Gartner.

Gartner analysts said IT spending in the government sector is expected to contract moderately on a global basis in 2012 and 2013, driven by austerity measures in the eurozone. While there has been much commentary about the need for government cuts since the sovereign debt crisis emerged in Europe, it is only now that the impact of government budget cutbacks is being felt on IT spending in the region. Similarly, we expect US government spending to be essentially flat in 2012 before contracting in 2013.

In the small and midsize business market, which represents approximately a quarter of all enterprise IT spending, spending is forecast to reach \$874 billion in 2012 and will grow to \$1 trillion by 2016. Throughout the forecast period, midsized business IT spending outperforms other sectors in each of the next five years, driven by growth in spending on enterprise software.

The worldwide telecom equipment market is forecast to show the strongest growth with spending reaching \$472 billion in 2012, a 6.9 per cent increase from 2011. Gartner attributes this growth to the continued health of the mobile devices market as well as a more positive outlook for enterprise network equipment, which is being driven by spending on application acceleration equipment, network security, WLAN and Ethernet switches.

Table 1. Worldwide IT Spending Forecast (Billions of US Dollars)

	2011 Spending	2011 Growth (%)	2012 Spending	2012 Growth (%)
Computing Hardware	404	7.7	421	4.3
Enterprise Software	267	9.2	280	5.0
IT Services	845	6.5	856	1.3
Telecom Equipment	442	7.2	472	6.9
Telecom Services	1,704	6.3	1,721	1.0
All IT	3,661	6.8	3,751	2.5

More-detailed analysis on the outlook for the IT industry will be presented in the webinar "Gartner Worldwide IT Spending Forecast, 1Q12 Update." The complimentary webinar will be hosted by Gartner on 17 April at 4:00pm UK time. Mr Gordon will assess the prospects for growth in IT spending not only in the short term but also through 2016. To register for the webinar, please visit our site.

Emerging Markets Will Generate \$1.22 Trillion in IT Spending in 2012

Tue, 03 Apr 2012 00:00:00 +0200

Emerging markets will generate \$1.22 trillion in IT spending in 2012, representing more than 31 per cent of the worldwide total, according to Gartner, Inc.

The emerging regions of Asia/Pacific (which exclude the mature markets of Japan, Australia, New Zealand, Singapore, South Korea, Hong Kong and Taiwan), Latin America, the Middle East and Africa (minus mature Israel), and Central and Eastern Europe, continue to show positive IT momentum, despite economic deceleration and a high degree of financial uncertainty in mature markets.

"While professional and consumer market opportunities can be found in many emerging markets, Brazil, Russia, India, Mexico and China (BRIMC) continue to perform particularly strongly, and this is where over half of emerging markets' IT spending will be concentrated in 2012," said Luis Anavitarte, research vice president and head of emerging markets research at Gartner. "Seventeen per cent of global IT spending will be generated by BRIMC in 2012, representing nearly \$658 billion, and the markets remain far from saturated."

From a regional perspective, Latin America will generate nearly \$326 billion in IT spending in 2012, of which professional markets will represent 48.4 per cent of the total IT market in reaching \$157.7 billion in 2012. Consumer markets in Latin America will reach \$168 billion in 2012.

IT spending in the Middle East and Africa is expected to reach \$244 billion in 2012, with Saudi Arabia, Turkey and South Africa accounting for nearly 35 per cent of this revenue. The Middle East and Africa professional markets represent 38 per cent of the total IT market in the region, and will reach \$93 billion in 2012.

Central and Eastern Europe are expected to generate nearly \$158 billion in IT spending in 2012. Professional markets will represent 48.2 per cent of this, totalling \$76 billion, while the consumer market is predicted to reach \$81.7 billion. Russia's share of IT spending in the region in 2012 is expected for be nearly 45 per cent, followed by Poland with 11.8 per cent, the Czech Republic with 7.7 per cent and Hungary with 3.7 per cent.

IT spending in emerging Asia/Pacific countries is expected to reach \$496 billion in IT spending in 2012. Emerging Asia/Pacific professional markets will reach 42 per cent of the total IT spending in the region, while consumer IT spending will reach \$288 billion in 2012.

"IT spending caution will be a constant in 2012, suggesting IT sales will be more challenging than in 2011," Mr Anavitarte said. "In 2012, we expect to see a more aggressive approach of selected professional and consumer markets, with particular attention to new consumer buyers. IT budget increases are expected in emerging markets for 2012 and end users' top technology priorities include cloud computing and mobile technologies."

Mr Anavitarte advised providers to rebalance their portfolio of markets by assessing worldwide demand for 2012 and shifting resources accordingly from some mature markets to selected emerging economies. Being selective and strategic in regions, countries and selected cities will be key in the coming year, and providers will need to carefully select where to execute their strategies after BRIMC countries, maximizing profitability while minimising investments. They should also plan for a larger direct presence and execution in BRIMC, and for a slightly higher reliability in channel partners in the rest of the emerging markets.

Additional information is available in the Gartner report "Emerging Market Analysis: Bases for a Solid 2012 Market Growth Strategy." The report is available on Gartner's web site at http://www.gartner.com/resId=1879518.

Worldwide Business Intelligence, Analytics and Performance Management Software Market Surpassed the \$12 Billion Mark in 2011

Mon, 02 Apr 2012 00:00:00 +0200

Worldwide business intelligence (BI) platform, analytic applications and performance management (PM) software revenue reached \$12.2 billion in 2011, a 16.4 per cent increase from 2010 revenue of \$10.5 billion, according to Gartner, Inc. The BI, analytics and PM software market was the second-fastest growing sector in the overall worldwide enterprise software market in 2011.

"BI, analytics and PM have been identified as one way to filter vast and growing amounts of information to reach insights and decisions in the digitised world, which is transforming industry after industry," said Dan Sommer, principal analyst at Gartner.

"The strong growth was driven by two major forces. The first is that IT continues to spend and earmark money to BI, despite constrained budgetary environments. Gartner's 2012 CIO survey showed that analytics and BI is the No. 1 technology priority for CIOs in 2012. BI projects remain relatively shielded, while a healthy portion of any discretionary money will be available for upcoming analytic initiatives," Mr Sommer said. "Second, new buying centres are opening and expanding outside of IT, in line-of-business initiatives, and taking an increasingly large stake of the spending pie. Key drivers for this are self-service data discovery tools, the race among vendors to provide business context through packaged analytics, and CFOs taking a renewed interest in BI and PM."

The top five vendors continue to consolidate the market through a combination of acquisition, integration and upsell/cross-selling activities with their stacks, resulting in them owning close to three quarters of the market. However, Gartner has identified more than 100 innovative vendors jostling for positions, some of them in hyper-growth mode. So, in no way is this a market with closed opportunities.

SAP remained the No. 1 vendor in combined worldwide BI, analytics and PM software revenue in 2011, accounting for 24 per cent of the market (see Table (download below)), followed by Oracle, SAS Institute, IBM and Microsoft.

All three subsegments of the market showed fairly even growth (see Table 2 (download below)).

"This goes to show that clients prefer a balanced approach to sourcing, across a portfolio of technologies, rather than focusing on just one subsegment," said Mr Sommer. "It's not a build or buy decision; it's both."

"In 2011, the market is still dominated by traditional on-premises solutions linked to PCs," said Mr Sommer. “However, key forces like cloud, mobile, social and big data will play a key role in increased adoption over the next 10 years, and help shift the centre of gravity away from BI and analytics being only an enterprise IT push adopted by key stake-holders in lines of business, to one with a strong focus on the individual context, inside and outside the firewall. In 10 years time, everyone will be touched by analytics in a much denser and more frequent way than today."

Additional details are available in the Gartner report "Market Share: All Software Markets, Worldwide, 2011." The report is available on Gartner's web site at http://www.gartner.com/resId=1969315.

Gartner Outlines Five Cloud Computing Trends That Will Affect Cloud Strategy Through 2015

Mon, 02 Apr 2012 00:00:00 +0200

Continual monitoring of cloud computing trends, with regular updates to the organisation's cloud strategy, will be essential to avoid costly mistakes or miss market opportunities over the next few years, according to Gartner, Inc. Although the potential for cloud computing is significant, the breadth and depth of the impact, as well as the level of adoption over time, are uncertain and will require frequent review.

"Cloud computing is a major technology trend that has permeated the market over the last two years. It sets the stage for a new approach to IT that enables individuals and businesses to choose how they'll acquire or deliver IT services, with reduced emphasis on the constraints of traditional software and hardware licensing models," said David Cearley, vice president and Gartner Fellow. "Cloud computing has a significant potential impact on every aspect of IT and how users access applications, information and business services."

"The trend and related technologies continue to evolve and change rapidly, and there is continuing confusion and misunderstanding as vendors increasingly hype 'cloud' as a marketing term," said David Mitchell Smith, vice president and Gartner Fellow. "This level of impact, confusion, uncertainty and change make cloud computing one of Gartner's top 10 strategic technology trends to address."

Gartner has identified five cloud computing subtrends that will be accelerating, shifting or reaching a tipping point over the next three years and that users must factor into their planning processes:

Formal Decision Frameworks Facilitate Cloud Investment Optimisation
The cloud promises to deliver a range of benefits, including a shift from capital-intensive to operational cost models, lower overall cost, greater agility and reduced complexity. It can also be used to shift the focus of IT resources to higher-value-added activities for the business, or to support business innovation and, potentially, lower risks. However, these prospective benefits need to be examined carefully and mapped against a number of challenges, including security, lack of transparency, concerns about performance and availability, the potential for vendor lock-in, licensing constraints and integration needs. These issues create a complex environment in which to evaluate individual cloud offerings.

Hybrid Cloud Computing Is an Imperative
Hybrid computing refers to the coordination and combination of external cloud computing services (public or private) and internal infrastructure or application services. Over time, hybrid cloud computing could lead to a unified model in which there is a single "cloud" made up of multiple cloud platforms (internal or external) that can be used, as needed, based on changing business requirements. Gartner recommends that organisations focus near-term efforts on application and data integration, linking fixed internal and external applications with a hybrid solution. Where public cloud application services or custom applications running on public cloud infrastructures are used, guidelines and standards should be established for how these elements will combine with internal systems to form a hybrid environment.

Cloud Brokerage Will Facilitate Cloud Consumption
As cloud computing adoption proliferates, so does the need for consumption assistance. A cloud services brokerage (CSB) is a service provider that plays an intermediary role in cloud computing. Interest in the CSB concept increased last year, and Gartner expects this trend to accelerate over the next three years as more individuals, whether they are in IT or a line-of-business unit, consume cloud services without involving IT.

To address this challenge, Gartner said IT departments should explore how they can position themselves as CSBs to the organisation by establishing a purchasing process that accommodates cloud adoption and encourages business units to come to the IT organisation for advice and support. The organisation CSB approach can be implemented by modifying existing processes and tools such as internal portals and service catalogs.

Cloud-Centric Design Becomes a Necessity
Many organisations look first for opportunities to migrate existing workloads to a cloud system and/or an application infrastructure. This approach may provide benefits where the workload has a highly variable resource requirement, or where the application naturally lends itself to horizontal scalability. However, to fully exploit the potential of a cloud model, applications need to be designed with the unique characteristics, limitations and opportunities of a cloud model in mind. Gartner advises businesses to look beyond the migration of the organisation’s workloads to the creation of cloud-optimised applications that fully exploit the potential of the cloud to deliver global-class applications.

Cloud Computing Influences Future Data Centre and Operational Models
In public cloud computing, an organisation is acting as a consumer of services, with the cloud services provider handling the implementation details, including the data centre and related operational models. However, to the extent that the organisation continues to build its own data centres, they will be influenced by the implementation models used by cloud services providers. Gartner recommends that organisations apply the concepts of cloud computing to future data centre and infrastructure investments to increase agility and efficiency.

Additional information is available in the Gartner report "Five Cloud Computing Trends That Will Affect Your Cloud Strategy Through 2015." The report is available on Gartner's website at http://www.gartner.com/resId=1920517.

Semiconductor Foundry Market Grew 5.1 Per Cent in 2011 to Reach \$29.8 Billion

Fri, 30 Mar 2012 00:00:00 +0200

The worldwide semiconductor foundry market totaled \$29.8 billion in 2011, a 5.1 per cent increase from 2010, according to Gartner, Inc. Analysts said the semiconductor supply chain experienced some impact from the Japanese disasters and Thailand flooding. However, without the steep depreciation of U.S. currency, analysts said that foundry growth in 2011 would have been just 0.7 percent.

"Thanks to stable media tablet and mobile phone sales, a slide of the semiconductor and foundry revenue in 2011 was prevented," said Samuel Tuan Wang, research director at Gartner. "After 40.5 per cent growth from 2009 to 2010, the foundry market maintained relatively flat business in 2011 due to the weakness in PC production and an overall consumer demand hit, as well as a leaner inventory practice by customers that started in mid-2011."

Consolidation and domination of business continued. The top five foundry players accounted for almost 80 per cent of the foundry market share, with the top player, TSMC, expanding its revenue over 2010 and reaching 48.8 per cent share in 2011 (download Table 1 below).

Samsung's foundry, with \$470 million in revenue, ranked No. 9. However, Samsung Electronics had been very aggressively expanding its LSI business in 2011. Had the estimated \$1 billion Apple wafer business been included in its foundry revenue, Samsung would rank as high as No. 4 in the foundry ranking. Powerchip had a nearly threefold increase in foundry revenue in one year due to the strategic decision to shift from the commodity DRAM business to foundry in early 2011.

Communications, consumer and data processing continued to be the three key applications driving the foundry business; they accounted for 42.7 per cent, 20.9 per cent and 20.3 per cent of the foundry revenue, respectively, in 2011. Fabless customers contributed 77.8 per cent of the foundry business, integrated device manufacturers contributed 20.2 per cent, and the remaining came from system companies. By region, America's customers generated 62.8 per cent of the foundry revenue, Asia/Pacific 22.2 per cent, Europe 10 per cent and Japan 4.9 per cent.

"Given the aggressive capital spending by large foundries during 2010 and 2011, the oversupply of foundry capacity was inevitable," said Mr. Wang. "The utilisation rate for foundries continued to decline quarter to quarter in 2011, causing the annual average utilisation rate to drop to 81 per cent from 91 per cent in 2010. Advanced technology for mobile applications was the driver for the growth of foundry business in 2011, and the demand is expected to remain high during the next few years."

Additional details are available in the Gartner report "Market Share: Semiconductor Foundry Market in 2011." The report is available at http://www.gartner.com/resId=1952216.

Data Centre Services Market Shows Regional Differences in the Move Toward the Cloud

Mon, 26 Mar 2012 00:00:00 +0200

While interest around data centre services (DCS) is extremely high, the market structure, dynamics and maturity differ across the world, according to Gartner, Inc. The shift toward industrialised services, such as infrastructure utility services (IUS), cloud computing infrastructure as a service (IaaS) and platform as a service (PaaS) is a global trend in the data centre services market.

"Many events have affected the DCS market in the past two years, with symptoms of a traditional market at the tipping point from maturity to reinvention or decline," said Claudio Da Rold, vice president and distinguished analyst at Gartner. "Buyers in enterprise organisations must recognise the common usage patterns and differentiated levels of adoption of hosting vs. data centre outsourcing (DCO), as well as the different business and market drivers toward new products."

In North America, hosting (42 per cent) and cloud IaaS have achieved the highest level of client adoption, while the markets in the rest of the world are dominated by data centre outsourcing (80 per cent). Other drivers across the global markets are economic growth and the buying trends of small or midsize businesses (SMBs). Combined, these factors cause the DCS market to evolve at a different rate toward the new delivery models in the macro geographies.

North America
Data centre outsourcing (DCO) in North America was \$33 billion in 2011, while web hosting and collocation were \$23 billion. This market has the highest cloud adoption rate, with 60 per cent of public cloud services worldwide, and the US hosting market has continued to accelerate the pace of innovation and transformation. The North American DCO/IUS market has grown both organically and through new offerings, such as storage as a service. Traditional DCO services growth continues at a slower pace than previously, due to IUS solutions and lower-price IT outsourcing (ITO) industrialised models.

Europe
DCO in Europe was \$38 billion in 2011, while web hosting and co-location were \$8.6 billion and public cloud services adoption 22.9 per cent. The European market used to be a fragmented puzzle of different and relatively small country markets, but since 2005 leading outsourcers have implemented low-cost remote control centres and then started developing IUS offerings to benefit from significant traction with infrastructure utility for SAP, particularly since 2008 and during the economic crisis.

Asia/Pacific
DCS in the region was \$10 billion in 2011, while web hosting and co-location were \$2.5 billion, and public cloud services penetration was 9.8 per cent in Japan and 3 per cent elsewhere. Japan and South Korea are the most vibrant web hosting markets for local content, while Singapore and Hong Kong are important regional hubs for multinationals. Other developed markets include Australia, New Zealand and Taiwan. A few large infrastructure vendors dominate the DCO market in the region, while regional and local providers operate in each country. A plethora of players, such as IT services providers, hosters and cloud specialists (from the US) have recently joined the race, with more expecting to fill the marketplace in the next 12 months.

Additional information is available in the Gartner report "Regional Differences in the Move Toward the Cloud, 2012." The report is available on Gartner's website at http://www.gartner.com/resId=1938016

Worldwide Semiconductor Spending to Reach \$316 Billion in 2012, a 4 Per Cent Increase from 2011

Tue, 13 Mar 2012 00:00:00 +0100

Worldwide semiconductor revenue is projected to total \$316 billion in 2012, a 4 per cent increase from 2011, according to Gartner, Inc. This outlook is up from Gartner's previous forecast in the fourth quarter of 2011 for 2.2 per cent growth.

"The semiconductor industry is poised for a rebound starting in the second quarter of 2012," said Bryan Lewis, research vice president at Gartner. "The inventory correction is expected to conclude this quarter, foundry utilisation rates are bottoming, and the economic outlook is stabilising."

In the memory sector, DRAM pricing is expected to improve beginning in the second quarter of 2012. The DRAM market will show a slight revenue increase in 2012 (up 0.9 per cent from 2011) after being the worst-performing market in 2011, declining 25 per cent. DRAM prices were down about 50 per cent in 2011, and Gartner analysts expect pricing to rebound in part due to Elpida filing bankruptcy protection. NAND flash memory, however, is one of the fastest-growing device types in 2012, with revenue forecast to grow 18 per cent. Analysts attribute the NAND flash growth to a strong increase in mobile consumer devices and solid-state drives.

Media tablet unit production is forecast to increase 78 per cent over 2011, and semiconductor revenue from media tablets will reach \$9.5 billion in 2012. Quad-core processors and higher-resolution displays will be mainstream for tablets in 2012.

PC unit production in 2012 is projected to increase 4.7 per cent, and semiconductor revenue from PCs will reach \$57.8 billion. Mobile phone unit production is expected to grow 6.7 per cent, with semiconductor revenue for mobile phones totalling \$57.2 billion in 2012. Gartner analysts said that further innovation focused on location and context will require advances in sensing, processing, displays, connectivity and power efficiency.

"2012 should be a reasonably strong year for the semiconductor industry if the macroeconomic outlook stays in check," Mr Lewis said. "Gartner's 2012 semiconductor forecast of 4 per cent growth assumes the European debt issues stay contained, Iran/Israel tensions stay in check, and solid growth from China."

Personal Cloud Will Replace the Personal Computer as the Centre of Users' Digital Lives by 2014

Mon, 12 Mar 2012 00:00:00 +0100

The reign of the personal computer as the sole corporate access device is coming to a close, and by 2014, the personal cloud will replace the personal computer at the centre of users' digital lives, according to Gartner, Inc.

Gartner analysts said the personal cloud will begin a new era that will provide users with a new level of flexibility with the devices they use for daily activities, while leveraging the strengths of each device, ultimately enabling new levels of user satisfaction and productivity.

However, it will require businesses to fundamentally rethink how they deliver applications and services to users.

"Major trends in client computing have shifted the market away from a focus on personal computers to a broader device perspective that includes smartphones, tablets and other consumer devices," said Steve Kleynhans, research vice president at Gartner. "Emerging cloud services will become the glue that connects the web of devices that users choose to access during the different aspects of their daily life."

The past two years have been a whirlwind in the client computing space, leaving many organisations asking what comes next and what the environment will look like in five years.
"Many call this era the post-PC era, but it isn't really about being 'after' the PC, but rather about a new style of personal computing that frees individuals to use computing in fundamentally new ways to improve multiple aspects of their work and personal lives," Mr Kleynhans said.

Several driving forces are combining to create this new era. These megatrends have roots that extend back through the past decade but are aligning in a new way.

Megatrend No. 1: Consumerisation — You Ain't Seen Nothing Yet

Gartner has discussed the consumerisation of IT for the better part of a decade, and has seen the impact of it across various aspects of the corporate IT world. However, much of this has simply been a precursor to the major wave that is starting to take hold across all aspects of information technology as several key factors come together:

Users are more technologically savvy and have very different expectations of technology.
The Internet and social media have empowered and emboldened users.
The rise of powerful, affordable mobile devices changes the equation for users.
Users have become innovators.
Through the democratisation of technology, users of all types and status within organisations can now have similar technology available to them.

Megatrend No. 2: Virtualisation — Changing How the Game Is Played

Virtualisation has improved flexibility and increased the options for how IT organisations can implement client environments. Virtualisation has, to some extent, freed applications from the peculiarities of individual devices, operating systems or even processor architectures.
Virtualisation provides a way to move the legacy of applications and processes developed in the PC era forward into the new emerging world. This provides low-power devices access to much-greater processing power, thus expanding their utility and increasing the reach of processor-intensive applications.

Megatrend No. 3: "App-ification" — From Applications to Apps

When the way that applications are designed, delivered and consumed by users changes, it has a dramatic impact on all other aspects of the market. These changes will have a profound impact on how applications are written and managed in corporate environments. They also raise the prospect of greater cross-platform portability as small user experience (UX) apps are used to adjust a server- or cloud-resident application to the unique characteristics of a specific device or scenario. One application can now be exposed in multiple ways and used in varying situations by the user.

Megatrend No. 4: The Ever-Available Self-Service Cloud

The advent of the cloud for servicing individual users opens a whole new level of opportunity. Every user can now have a scalable and nearly infinite set of resources available for whatever they need to do. The impacts for IT infrastructures are stunning, but when this is applied to the individual, there are some specific benefits that emerge. Users' digital activities are far more self-directed than ever before. Users demand to make their own choices about applications, services and content, selecting from a nearly limitless collection on the Internet. This encourages a culture of self-service that users expect in all aspects of their digital experience. Users can now store their virtual workspace or digital personality online.

Megatrend No. 5: The Mobility Shift — Wherever and Whenever You Want

Today, mobile devices combined with the cloud can fulfill most computing tasks, and any tradeoffs are outweighed in the minds of the user by the convenience and flexibility provided by the mobile devices. The emergence of more-natural user interface experiences is making mobility practical. Touch- and gesture-based user experiences, coupled with speech and contextual awareness, are enabling rich interaction with devices and a much greater level of freedom. At any point in time, and depending on the scenario, any given device will take on the role of the user's primary device — the one at the centre of the user's constellation of devices.

"The combination of these megatrends, coupled with advances in new enabling technologies, is ushering in the era of the personal cloud," said Mr Kleynhans. "In this new world, the specifics of devices will become less important for the organisation to worry about. Users will use a collection of devices, with the PC remaining one of many options, but no one device will be the primary hub. Rather, the personal cloud will take on that role. Access to the cloud and the content stored or shared in the cloud will be managed and secured, rather than solely focusing on the device itself."

Worldwide External Controller-Based Disk Storage Market Grew 4.8 Per Cent in Fourth Quarter of 2011

Fri, 09 Mar 2012 00:00:00 +0100

Worldwide external controller-based (ECB) disk storage vendor revenue totalled \$5.9 billion in the fourth quarter of 2011, a 4.8 per cent increase from revenue of \$5.6 billion in the fourth quarter of 2010, according to Gartner, Inc.

"The fourth quarter 2011 results represent the ninth consecutive quarter of revenue growth, but fell short of Gartner's expectations of a 7.6 per cent year-on-year increase," said Roger Cox, research vice president at Gartner. "Historically, the fourth quarter produces 29.2 to 29.7 per cent of the total year's vendor revenue, but the fourth quarter of 2011 came in shy at 27.9 per cent because of three reasons — economic weakness in North America and EMEA (Europe, the Middle East and Africa), some hard-disk drive supply problems caused by the October 2011 flood in Thailand, and the inability of HP and IBM to keep pace with their improving performance during the first nine months of 2011."

EMC, NetApp, Hitachi/Hitachi Data Systems (HDS) and Fujitsu beat the year-on-year market growth rate in the fourth quarter (download Table below the page). EMC gained share with its VNX, VMAX and Data Domain platforms, as well as the accretive influence of the Isilon acquisition. After a couple of spotty quarters, and with its platform portfolio (FAS6000/3000/2000) fully in place, NetApp realised above market results from its core ONTAP-based unified storage platforms. With best in class year-on-year revenue growth performance, the high-end VSP remained Hitachi/HDS's primary strength. Fujitsu's entry to midrange modular ETERNUS DX-series produced solid above market results, propelling a 22.7 per cent annual growth rate.

Dell, HP, IBM and Oracle lost share in the ECB disk storage market in the fourth quarter of 2011. While IBM's Storwize V7000 and XIV systems achieved a 51.5 per cent revenue increase year over year, the sluggish performance of its DS-series caused overall ECB revenue to decline 0.7 per cent. Even though HP increased 3PAR revenue 44.2 per cent sequentially in the fourth quarter, its P6000 EVA, P4000 SAN (LeftHand) and P2000 MSA platforms declined year-on-year, resulting in a 4.4 per cent drop-off in overall ECB disk storage revenue.

Dell's IP-based products (EqualLogic, Compellent and PowerVault series) achieved year-on-year revenue growth; however, it still suffered from the disengagement from the OEM agreement with EMC. Albeit small (1.8 per cent), the fact that Oracle achieved positive year-on-year revenue growth for the first time in five quarters was encouraging for the company, but Oracle still suffered from field sales operational issues.

For the year, worldwide disk storage vendor revenue totalled \$21.2 billion in 2011, a 9.8 per cent increase from revenue of \$19.3 billion in 2010 (download Table below the page). Among the top five vendors, EMC continued to lead the market, followed by IBM and NetApp.

Gartner ECB disk storage reports reflect vendor-branded hardware-only revenue, as well as hardware revenue associated with financial leases and managed services. Optional and separately priced storage software revenue and storage area network infrastructure components are excluded.

Additional information on the ECB disk storage market is available in the Gartner "Quarterly Statistics: Disk Array Storage, All Regions, All Countries, 4Q11 Update." The report includes vendor market share by data access method, price band, sales channel and operating system segmentation. The report is available on Gartner's website at http://www.gartner.com/resId=1939617

PC Shipments Will Grow 4.4 Per Cent in 2012

Thu, 08 Mar 2012 00:00:00 +0100

Worldwide PC shipments are on pace to total 368 million units in 2012, a 4.4 per cent increase from 2011, according to the latest forecast by Gartner, Inc. PC shipments are forecast to see higher growth by the end of 2013, when shipments are expected to reach more than 400 million units.

“PC shipments will remain weak in 2012, as the PC market plays catch up in bringing a new level of innovation that consumers want to see in devices they purchase,” said Ranjit Atwal, research director at Gartner. “The real question is whether Windows 8 and ultrabooks will create the compelling offering that gets the earlier adopter of devices excited about PCs again.”

In addition, while the economic environment and supply issues played a key part in the weaker PC market, it was a lesser concern to PC vendors compared to the far greater issue of changing consumer dynamics.

Gartner analysts said that 2011 redefined the landscape of the device market. “The use of applications such as e-mail, social networking and internet access, that were traditionally the domain of the PC, are now being used across media tablets and smartphones, making these devices in some cases more valued and attractive propositions,” said Mr Atwal. “Consumers will now look at a task that they have to perform, and they will determine which device will allow them to perform such a task in the most effective, fun and convenient way. The device has to meet the user needs not the other way round.”

Gartner expects ultrabooks will garner greater attention in the latter half of 2012, as the industry looks for this platform to reinvigorate the mobile PC form factor. “However, PCs will face more competition as we see new media tablets based on operating systems from Android and Microsoft, as well the new iPad,” Mr Atwal said.

“Moreover, we expect the shift to the personal cloud will also accelerate as consumers increasingly adopt cloud-based services as part of their digital ecosystem,” Mr Atwal said. “The evolution of the personal cloud will challenge vendors across all mobile devices markets and add to the hurdles for PC vendors to overcome to revive the PCs and differentiate them from tablets. The creation of content capabilities of PCs may not be enough to counteract the better content consumption capabilities of media tablets.”

Mature PC markets will continue to be replacement market driven and their volumes will be much less than their emerging market counterparts.

“Emerging markets are key to driving worldwide PC growth in both the short and long-term, and our expectation is that 2012 and then 2013 onwards will be supported by growth in emerging markets as their share increases from just over 50 per cent in 2011 to nearly 70 per cent in 2016,” said Mr Atwal. “Emerging markets have very low PC penetration and even with the availability of other devices we still expect a steady uptake of PCs.”

Additional analysis is available in the Gartner on Demand webinar "Gartner PC and Media Tablet Forecast Update, 1Q 2012." The webinar is available at http://my.gartner.com.

Hybrid IT is Transforming the Role of IT

Mon, 05 Mar 2012 00:00:00 +0100

Hybrid IT is transforming IT architectures and the role of IT itself, according to Gartner, Inc. Hybrid IT is the result of combining internal and external services, usually from a combination of internal and public clouds, in support of a business outcome.

In the Gartner Special Report, "Hybrid IT: How Internal and External Cloud Services are Transforming IT" (http://www.gartner.com/technology/research/technical-professionals/hybrid-cloud.jsp), analysts explained that hybrid IT relies on new technologies to connect clouds, sophisticated approaches to data classification and identity, and service-oriented architecture, and heralds significant change for IT practitioners.

"Many organisations have now passed the definitional stage of cloud computing and are testing cloud architectures inside and outside the organisation and over time, the cloud will simply become one of the ways that we 'do' computing, and workloads will move around in hybrid internal/external IT environments," said Chris Howard, managing vice president at Gartner. "As a result, the traditional role of the enterprise IT professional is changing and becoming multifaceted. A hybrid IT model requires internal and external IT professionals to support the business capabilities of the organisation."

Cloud computing's business model — the ability to rapidly provision IT services without large capital expenditures — is appealing to budget-minded executives. CEOs and CIOs are pressuring IT organisations to lower overheads by offloading services to cloud providers. However, when IT organisations investigate potential cloud services, the market's volatility reveals that not all cloud services are created equal.

"IT organisations are taking an 'adopt and go' strategy to satisfy internal customer IT consumerisation and democratisation requirements," Mr Howard said. "Many IT organisations are adopting public cloud computing for noncritical IT services such as development and test applications, or for turnkey software as a service (SaaS) applications such as Web analytics and customer relationship management (CRM) that can holistically replace internal applications and enable access for a mobile workforce."

For critical applications and data, IT organisations have not adopted public cloud computing as quickly. Many IT organisations discover that public cloud service providers (CSPs) cannot meet the security requirements, integrate with an organisation’s management, or guarantee availability necessary to host critical applications. Therefore, organisations continue to own and operate internal IT services that house critical applications and data.

However, the public cloud has affected internal customers. Because of the pervasive growth of public clouds, many business units and internal customers have used and grown accustomed to IT as a service and have built business processes and budget plans with cloud computing in mind. Now these internal customers are demanding that IT organisations build internal private clouds that not only house critical applications, but also provide a self-service, quickly provisioned, showback-based IT consumption model.

"IT organisations that do not match the request for IT as a service run the risk of internal customers bypassing the IT organisation and consuming IT services from the external cloud, thereby placing the company at greater risk," said Mr Howard. "IT organisations realise that they not only need to compete with the public cloud consumption model, but also must serve as the intermediary between their internal customers and all IT services — whether internal or external."

IT organisations are becoming the broker to a set of IT services that are hosted partially internally and partially externally — hybrid IT architecture. By being the intermediary of IT services, IT organisations can offer internal customers the price, capacity and speed of provisioning of the external cloud while maintaining the security and governance the company requires, and reducing IT service costs.

This model of service delivery challenges both the longstanding practices of IT organisations and the business models of traditional IT vendors. Gartner expects that most organisations will maintain a core set of primary service providers (cloud and noncloud) extended by an ecosystem of edge providers who fulfil specific solution requirements.

"Hybrid IT is the new IT and it is here to stay. While the cloud market matures, IT organisations must adopt a hybrid IT strategy that not only builds internal clouds to house critical IT services and compete with public CSPs, but also utilises the external cloud to house noncritical IT services and data, augment internal capacity, and increase IT agility," said Mr Howard. "Hybrid IT creates symmetry between internal and external IT services that will force an IT and business paradigm shift for years to come."

Additional information is available in the Gartner Special Report "Hybrid IT: How Internal and External Cloud Services are Transforming IT" at http://www.gartner.com/technology/research/technical-professionals/hybrid-cloud.jsp.

Fewer Than 30 Per Cent of Large Organisations Will Block Social Media by 2014

Mon, 05 Mar 2012 00:00:00 +0100

Fewer than 30 per cent of large organisations will block employee access to social media sites by 2014, compared with 50 per cent in 2010, according to Gartner, Inc. The number of organisations blocking access to all social media is dropping by around 10 per cent a year.

"Even in those organisations that block all access to social media, blocks tend not to be complete," said Andrew Walls, research vice president at Gartner. "Certain departments and processes, such as marketing, require access to external social media, and employees can circumvent blocks by using personal devices such as smartphones. Organisations need now to turn their attention to the impacts of social media on identity and access management (IAM)."

Gartner said that social media environments include mechanisms to collect, process, share and store a more complete range of identity data than do corporate IAM systems. They enable a more complete view of identity, one that extends beyond the bounds of organisations. For IAM managers, this is both a threat and an opportunity. Identity data and social media platforms can expose organisations and users to a wide variety of security threats, but organisations can also use this identity data to improve support for their own IAM practices and the ambitions of business stakeholders.

Gartner identified three significant impacts of social media on IAM:

Personal trust misaligned with corporate trust: Employees who participate in online social media continually make judgments about the degree of trust they should place in the platforms and in other participants, and they adjust content, structure and vocabulary to match their risk assessments. These assessments and the fundamental inputs to their assessment process may not align with corporate expectations for risk management. As a result, employees may say and do things on social media platforms that violate corporate policy or are otherwise counter to corporate expectations.

Public content supports identity intelligence: The collection of identity data by public social media on a massive scale enables improvements in the production of identity intelligence. This pushes IAM programmes to discover the user profiles accessed by staff and to maintain capabilities for accessing external services in order to harvest identity data.

Identity data can be leveraged for IAM: Social media provide a mechanism for verifying the identity of employees, job candidates and customers, and a cloud identity platform for performing IAM for other applications. IAM programmes can use social media for identity verification and to extend identity services to internal and external applications via a semi-trusted social platform.

"Organisations should not ignore social media and social identity," said Mr Walls. "We recommend that organisations ascertain how they currently use internal and external social media in both official and unofficial ways, and look for dissonance between IAM practices and the identity needs, opportunities and risks of social media."

Mr Walls will speak on the impact of social media on IAM at the Gartner Identity & Access Management Summit 2012. For further information on the Summit, which will take place on 12-13 March in London, please visit www.gartner.com/eu/iam.

Worldwide Server Revenue Grew 7.9 Per Cent and Shipments Increased 7 Per Cent in 2011

Wed, 29 Feb 2012 00:00:00 +0100

The worldwide server market ended 2011 with mixed results, as worldwide server revenue declined 5.4 per cent in the fourth quarter of 2011 and server shipments increased 4.5 per cent, according to Gartner, Inc. For the year, worldwide server revenue grew 7.9 per cent (download Tables below), and server shipments increased 7 per cent.

“The shortage of hard-disk drive (HDD) inventory because of the Thailand floods in October 2011 provided supply issues, and many providers could not meet the demand in the last weeks of 2011, said Jeffrey Hewitt, research vice president at Gartner. “We expect the negative impact of these drive supply issues to continue into the first quarter of 2012.”

From a geographic perspective, all regions grew year-on-year in shipments for the quarter, with the exception of Western Europe which fell 3.1 per cent for the period. In vendor revenue for the fourth quarter of 2011, Asia/Pacific, Eastern Europe, Japan and Middle East/Africa all posted mid-high-single-digit to low-double-digit year-on-year growth, while Canada, Latin America, USA and Western Europe all posted high-single-digit to low-double-digit declines.

IBM was the market leader in the worldwide server market based on revenue (download Tables below) - the company ended the year with \$4.7 billion in revenue for the fourth quarter of 2011 for a total share of 33.7 per cent. IBM’s revenue was down 10.2 compared to the same quarter in 2010. IBM’s growth was fuelled by its Power Systems product line.

Of the top five global vendors, Dell was the only vendor to experience a growth in worldwide server revenue with 7.3 per cent growth in the fourth quarter of 2011.

In server shipments, HP remained the worldwide leader for the fourth quarter of 2011. HP accounted for 28.1 per cent of global shipments in the fourth quarter of 2011, despite a shipment decline of 8.1 per cent.

Of the top five vendors in server shipments worldwide, Lenovo and Dell were the only vendors to post shipment increases. Lenovo’s shipments grew 51 per cent, and Dell increased 11.2 per cent compared to the fourth quarter of 2010.

The results for the quarter were centred around x86 server demand which increased in shipments by 5 per cent and revenue by 2.6 per cent for the fourth quarter of 2011.

In 2011, the server market was fuelled primarily by x86 servers which are the predominant platform used for large scale data centre build outs, particularly in North America while emerging regions like Asia Pacific and Latin America also added to the growth for the year.

“2011 was a year that saw worldwide server growth driven by mega data centres and the explosion of client devices such as smartphones and tablets accessing web content,” Mr Hewitt said. “We have definitely seen a more pronounced segmentation between hyper-scale data centres and the traditional enterprise and mid-sized customer.”

“Ongoing blade server and ‘skinless’ server growth in the x86 segment also helped push 2011 results in spite of ongoing constraints in other segments such as RISC/Itanium Unix platforms,” Mr Hewitt said.

Blade servers posted a revenue increase of 14.5 per cent and a shipment increase of 4.2 per cent for the year. HP was the 2011 leader in blade servers accounting for 44 per cent of shipments, with IBM being in second place at 21 per cent. Cisco grew to an 8 per cent shipment share in the form factor to end the year in fourth place, just behind Dell who had 9.3 per cent.

“The outlook for 2012 suggests that growth will continue,” Mr Hewitt said. “These increases continue to be buffered by the use of x86 server virtualisation to consolidate physical machines as they are replaced, but the introduction of new processors from Intel and AMD is likely to help fuel and initiate a new round of server replacement cycles.”

In Europe, the Middle East and Africa (EMEA), server shipments reached 700,755 units in the fourth quarter of 2011, a decrease of 0.8 per cent from the same period last year (see Table 6). Server revenue totalled \$4.1 billion in the fourth quarter, a decline of 4.6 per cent from the same quarter last year (download Tables below). For the year, EMEA server revenue grew 5 per cent, and server shipments increased 3.3 per cent.

"Following the recovery that started in 2010, the EMEA server market suffered a second consecutive decline in the fourth quarter, this time with both units and revenue declining," said Adrian O'Connell, research director at Gartner. "Whilst the Eastern Europe and Middle East and Africa regions saw growth, this was not enough to offset the weakness in Western Europe where revenue declined by nearly 8 per cent. The market has failed to recover to anywhere near pre-downturn levels. Current market revenue levels are only around three quarters of what we saw in the fourth quarter of 2007, which underlines how much pressure vendors are currently under."

The fourth quarter of 2011 saw mixed results in the key segments. While x86 system revenue was flat growing at 0.6 per cent in the fourth quarter of 2011, the "Other CPU" category declined 20.9 per cent and RISC/Itanium UNIX systems declined 3.9 per cent. "The "Other CPU" category is highly cyclical and prone to swings up and down, but the RISC/Itanium UNIX segment in particular is increasingly facing longer term challenges as many users look at alternative platforms. The economic challenges in EMEA also continue to impact the server market as spending is constrained in each of the key technology segments," said Mr O'Connell.

Of the top five vendors, only Dell and Oracle — ranked No. 3 and No. 4 respectively — managed to achieve revenue growth in the fourth quarter of 2011. HP held onto the No. 1 position, despite a 10.9 per cent decline year-on-year. Second-ranked IBM also declined, by 8.2 per cent, largely due to cyclical weakness in its System z product line. In volume terms, Dell and Cisco — ranked No. 2 and No. 5 respectively — were the only vendors in the top five ranking to achieve year-on-year growth.

Mr O'Connell added: "Overall, RISC and Itanium Unix revenue decreased 3.9 per cent in the fourth quarter of 2011, although this top-level figure does not tell the whole story. HP had weak results in this segment, but IBM is benefiting from the difficulties of other vendors and consolidating its lead." IBM grew RISC/Itanium UNIX revenue by 21.4 per cent and ended the fourth quarter with a 48.4 per cent share of revenue in this segment.

"With a weak economic backdrop expected to persist throughout 2012, server vendors are likely to continue facing difficult market conditions over the next few quarters," said Mr O'Connell. "However, with the x86 segment going through a replacement cycle this year there will be opportunities to gain share for vendors with the best execution."

75 Per Cent of Organisations With BCM Programmes Will Have Public Social Media Services in their Crisis Communications Strategies By 2015

Tue, 28 Feb 2012 00:00:00 +0100

Social media can hold the key to transforming business continuity management (BCM), especially crisis/incident management and communications practices, according to Gartner, Inc. Analysts predict that, by 2015, 75 per cent of organisations with BCM programmes will have public social media services in their crisis communications strategies, and they advised BCM professionals to immediately begin assessing social media's opportunities — and risks.

"Organisations simply cannot afford to ignore social media as a crisis communications tool," said Andrew Walls, research vice president at Gartner. "In many cases, social media may represent the only available means of locating and contacting personnel; providing stakeholders with the information and assistance they need; informing citizens, customers and partners of product/service availability; and taking other business-critical actions following a disruptive event."

However, Mr Walls said that effective use of a new communications channel requires forward planning and practice. Attempting to leverage social media for the first time during a crisis can cause more harm than good. Instead, he said that organisations must develop comprehensive social media strategies and tactics for crisis/incident management and integrate social media with the organisation's established BCM processes.

The use of social media for user input and knowledge sharing can create a conflict for organisations when the sites are being used during a crisis by the workforce and others that are involved or watching the event unfold.

"As the workforce develops personal, digital friendships that might take precedence over the official spokesperson of the organisation, a conflict over who is the authority during an event can emerge, leading to unanticipated and negative results if official procedures are not followed," said Roberta Witty, research vice president at Gartner. "Such usage shouldn't turn into a battle for control, but organisations must protect their reputations and the effectiveness of their communications during stressful times. Therefore, putting forth a social media management strategy as part of a BCM programme is essential to ensure that the organisation's crisis communications effectiveness is protected, and that response and recovery plans and procedures are followed."

Social media is very different, technically and culturally, from the tightly controlled technologies and means of communication that organisations are accustomed to using and supporting (such as corporate email systems). The use of social media for collection and distribution of information can create serious challenges for organisations:

Maintaining an authoritative and credible information source
Enlisting active, effective participation of staff and the public that are active in social media
Collecting, filtering, analysing and applying information gathered from social platforms

"Organisations developing social media strategies and tactics for crisis/incident management must take these factors into account by establishing effective authorisation processes, content guidelines, and monitoring and message retention capabilities," Ms Witty said. "The bottom line is that no organisation's BCM efforts can afford to ignore the opportunities and risks presented by social media. BCM and crisis management specialists should begin working now to integrate social media tools and practices into their BCM efforts."

Additional information is available in the Gartner report "The Do's and Don'ts of Using Social Media in Business Continuity Management." The report is available on Gartner's website at http://www.gartner.com/resId=1900014.

Five Business Process Management Pitfalls to Avoid

Thu, 23 Feb 2012 00:00:00 +0100

Business process management (BPM) delivers significant benefits to organizations, but some organizations have faced many problems due to wrong turns along the way, according to Gartner, Inc. Gartner analysts have identified five BPM threats BPI (business process improvement) leaders need to be mindful of as organizations progress on their BPM initiatives.

"Considerable attention has been paid to the value of BPM and the dramatic transformation it can bring to an organization, but undertaking BPM isn't easy and BPI leaders and practitioners often stumble along the journey," said John Dixon, research director at Gartner. "BPM can be fraught with challenges due to the scale and breadth of skills, attributes and tools needed to be successful. BPM also presents innumerable challenges in areas such as organizational change, measurement systems, communications, business analysis, improvement methodologies and vendor selection."

With this in mind, Gartner has compiled five BPM pitfalls to avoid. They include:

Pitfall No. 1: Being Caught Unprepared to Demonstrate Value Delivered
With this pitfall, the BPM team may well have delivered some value to the organization, but if it did, it failed to keep a record of these achievements, or to routinely communicate them to those that matter. All BPM projects should start with an understanding of how success (outcomes) will be measured. It is vital to understand what the team is trying to improve (with a baseline measurement) and the corresponding improvement (metric). This metric must be communicated to the business, to clearly articulate the benefits delivered. The key is to learn the language of the organization and to use that language to communicate success.

Pitfall No. 2: Deploying a BPMS Without Understanding BPM as a Discipline
Deploying a cutting-edge business process management suite (BPMS) will solve nothing unless the organization also applies BPM as a discipline. BPM is not about technology. Because it fundamentally changes how people work, BPM is about change. The problem with relying solely on input from one subject matter expert, or group of managers, is that the process documented will reflect only what the expert or managers "think it should be." This "offline" analysis misses one of the greatest opportunities for improvement: mapping the real process.

Pitfall No. 3: Launching a BPM Effort Based on Perceived Problems, Without Validating the Facts
BPM activities must be based on facts and data, rather than reactions to those who shout the loudest. When starting a BPM initiative, it is good practice to allot a period of time to set up and gather metrics before process improvement work occurs. This period should be agreed to upfront, with the BPM steering committee or project sponsors, to properly set expectations.

Pitfall No. 4: Developing BPM Capabilities Without Delivering Business Value
A BPM team must build its capabilities, but this effort needs to be balanced with a degree of realism: the organization wants to see some return on its investment, often relatively quickly. Effort must be made to deliver benefits — even if they are relatively small at first — and to communicate them to the business so it can see some return on investment and feel positive about maintaining funding.

Pitfall No. 5: Focusing on Mapping Processes Instead of Improving Processes
BPM teams can get lost in mapping processes, acting under the assumption that this mapping activity amounts to "doing BPM." However, if these process maps are not used as a tool for bringing about real business improvements — or if such productive use cannot be demonstrated — they have no inherent value. BPM teams need to track and communicate the business value delivered.

Organisations That Integrate Communities Into Customer Support Can Realise Cost Reductions of Up to 50 Percent

Tue, 21 Feb 2012 00:00:00 +0100

Radical levels of customer service, which account for an average of 75 percent all customer interactions, threaten to undermine the customer's affinity for brands in 2012, according to Gartner, Inc. It is critical for customer service organisations to figure out how to harmonise customer service processes that sometimes happen with a human support agent, sometimes through self-service and sometimes by peer-to-peer community networks.

"A greater focus on individualised service, powered by analytical systems that understand the customer's likely intent, is helping the service process," said Michael Maoz, vice president and distinguished analyst at Gartner. "Thrown into the mix are two trends still in their early stages — peer-to-peer customer support and customer service via mobile devices, such as the iPad. Managing the pace of CRM customer service process change and technology change will require discipline and data across interaction channels."

Gartner's central predictions for the CRM customer service and support market are:

By 2014, organisations integrating communities into customer support will realise cost reductions ranging from 10 percent to 50 percent.

The cost savings are principally through the deflection of calls to the community, where the costs are less than 5 percent of the cost of a technical support agent. During 2012, three industries will realise the biggest successes (up to 50 percent savings on a per-case basis) with communities that solve customer support issues: B2B software, consumer electronics and telecommunications service providers. Laggards (less than 5 percent savings) will not get involved in 2012. These will be health insurance, government and banking. The U.S. and parts of Western Europe will lead the trend, with sharply reduced success over the next four years, as the concepts mature.

By 2014, customer fallout will drive down customer satisfaction in 70 percent of organisations that shift customer support to communities.

Many organisations are employing communities as a platform for customer support. While there are examples of organisations experiencing moderate to great success in call deflection and increased first-contact resolution (FCR) cost savings, there are also unsuccessful community deployments. These unsuccessful deployments happen when the organisation thinks that if it creates community self-help sites, customers will come. Similarly, these deployments tend to be plagued by the perception that peer-to-peer communities require no administration or moderation. Enterprises should recognise and plan for the administration and moderation required to maintain a customer support community, but be ready for the community to fail.

By 2015, 50 percent of online customer self-service search activities will be via a virtual assistant for at least 1,500 large enterprises.

More than 1,500 organisations worldwide are in various stages of production with virtual assistants (VAs). The results range from profound cost savings (5 percent reduction in service costs) and increased customer loyalty to simply the entertainment of having a robotic presence on a website. But the number of organisations adding this capability is growing by 20 percent per year, especially in travel, consumer goods, telecommunications and banking. A challenge is that computer-generated characters have limited ability to maintain an interesting dialogue with users; they need a well-structured and extensive knowledge management engine to become efficient, self-service productivity tools. VAs will lead to further downsizing of customer service centers.

By 2015, the marketing budget allocated to retaining customers and increasing loyalty through customer service will more than double.

As organisations attempt to get social, it is ever prevalent that marketing departments spearhead social media-based initiatives on their behalf. In marketing's continued effort to protect and evolve the organisation's brand through social media, the department increasingly engages in two-way communication.

Marketing and customer service departments will have to work in cohesion within an organization to successfully deliver on both strategies. Marketing is likely to fund initiatives that are jointly developed, executed, managed and measured by marketing and customer service. This will put marketing in a lead position to drive retention and loyalty strategies through customer service, improving the alignment between the two departments.

Through 2015, the dominant themes in customer service and support will be collaborative customer service processes, application migration to the cloud and support of mobile consumers.

Interaction channels have exploded in the past few years, from direct- and phone-based to the corporate website and across a growing selection of mobile devices and social media. To keep pace, the scope of functionality included in customer service and support (CSS) applications has expanded. Gartner analysts said it is time to build an iPad app competency. Continuing merger and acquisition activity is challenging organisations to adapt to a changing supplier landscape. Organisations have had difficulties managing and planning for an increasingly complex CSS solution portfolio. These organisations should use new delivery models such as cloud computing and mobile for extending and receiving customer service processes and applications.

More information is available in the report "Predicts 2012: CRM Customer Service and Support Staggers into the Posthuman Age," available on Gartner's website at http://www.gartner.com/resId=1846919. This document is part of Gartner's overall 2012 Predicts coverage, which is available at www.gartner.com/predicts. The Gartner Predicts Special Report overview includes links to more than 70 Predicts reports, categorised by topic, industry and market.

Worldwide Smartphone Sales Soared in Fourth Quarter of 2011 With 47 Per Cent Growth

Sun, 19 Feb 2012 00:00:00 +0100

Worldwide smartphone sales to end users soared to 149 million units in the fourth quarter of 2011, a 47.3 per cent increase from the fourth quarter of 2010, according to Gartner, Inc. Total smartphone sales in 2011 reached 472 million units and accounted for 31 per cent of all mobile devices sales, up 58 per cent from 2010.

Smartphone volumes during the quarter rose due to record sales of Apple iPhones. As a result, Apple became the third-largest mobile phone vendor in the world, overtaking LG. Apple also became the world's top smartphone vendor, with a market share of 23.8 per cent in the fourth quarter of 2011, and the top smartphone vendor for 2011 as a whole, with a 19 per cent market share. "Western Europe and North America led most of the smartphone growth for Apple during the fourth quarter of 2011," said Roberta Cozza, principal research analyst at Gartner. "In Western Europe the spike in iPhone sales in the fourth quarter saved the overall smartphone market after two consecutive quarters of slow sales."

The quarter saw Samsung and Apple cement their positions further at the top of the market as their brands and new products clearly stood out. LG, Sony Ericsson, Motorola and Research In Motion (RIM) again recorded disappointing results as they struggled to improve volumes and profits significantly. These vendors were also exposed to a much stronger threat from the midrange and low end of the smartphone market as ZTE and Huawei continued to gain share during the quarter.

Worldwide mobile device sales to end users totalled 476.5 million units in the fourth quarter of 2011, a 5.4 per cent increase from the same period in 2010 (download Table below the page). In 2011 as a whole, end users bought 1.8 billion units, an 11.1 per cent increase from 2010 (download Table below the page). "Expectations for 2012 are for the overall market to grow by about 7 per cent, while smartphone growth is expected to slow to around 39 per cent," said Annette Zimmermann, principal research analyst at Gartner.
In the fourth quarter of 2011, Nokia's mobile phone sales numbered 111.7 million units, an 8.7 per cent decrease from last year. "Samsung closed the gap with Nokia in overall market share," said Ms Cozza. "Samsung profited from strong smartphone sales of 34 million units in the fourth quarter of 2011. The troubled economic environment in Europe and Nokia's weakened brand status posed challenges that were hard to overcome in just one quarter. However, Nokia proved its ability to execute and deliver on time with its new Lumia 710 and 800 handsets. Nokia will have to continue to offer aggressive prices to encourage communications service providers (CSPs) to add its products to portfolios currently dominated by Android-based devices.”

Apple had an exceptional fourth quarter, selling 35.5 million smartphones to end users, a 121.4 per cent increase year on year. Apple's continued attention to channel management helped it take full advantage of the strong quarter to further close the gap with Samsung, which saw some inventory build up for its smartphone range. Apple's strong performance will continue into the first quarter of 2012 as availability of the iPhone 4S widens. However, since Apple will not benefit from delayed purchases as it did in the fourth quarter of 2011, Gartner analysts expect its sales to decline quarter-on-quarter.

After Apple, ZTE and Huawei were the fastest-growing vendors in the fourth quarter of 2011. "These vendors expanded their market reach and kept on improving the user experience of their Android devices," said Ms Cozza.

In the fourth quarter of 2011, ZTE moved into fourth place in the global handset market. ZTE posted a strong smartphone sales increase of 71 per cent sequentially. The company was able to extend its portfolio to three CSPs in its home market and benefited from consumers' interest in low-cost smartphones. Huawei moved ahead of LG in the Android marketplace to become a top-four Android manufacturer, thanks to strong smartphone growth in the quarter. Huawei has made significant progress in moving to its own-branded devices, and it has continued to expand its portfolio into higher tiers as its tries to build more iconic products.

RIM dropped to the No. 7 spot in the fourth quarter of 2011, with a 10.7 per cent decline. RIM's delay with its BlackBerry 10 platform will further impair its ability to retain users. However, RIM's biggest challenge is still to expand the developer base around its ecosystem and convince developers to work and innovate with BlackBerry 10.

In the smartphone OS market (download Table below the page), competition between Google and Apple intensified. Android's share declined slightly sequentially. This was due to strong iPhone sales, driven in particular by the iPhone 4S in mature markets and the weakness of key Android vendors as they struggled to create unique and differentiated devices. Samsung remained the main contributor to Android share gains in the second half of 2011. iOS's market share grew 8 percentage points year-on-year, but Gartner analysts expect Apple's share to drop in the next couple of quarters as the upgrade cycle to the iPhone 4S slows. Nokia's first Windows Phone smartphones, the Lumia 710 and 800, made their debut, but, as expected, sales were not enough to prevent a fall in Microsoft's smartphone market share.

Western European PC Shipments Fell 16 Per Cent in Fourth Quarter of 2011

Tue, 07 Feb 2012 00:00:00 +0100

PC shipments in Western Europe totalled 16.3 million units in the fourth quarter of 2011, a 16 per cent decline from the equivalent period in 2010, according to Gartner, Inc. For the year, PC shipments numbered 58.5 million units in Western Europe in 2011, also a 16 per cent decrease from 2010.

The PC market in Western Europe has suffered four consecutive quarters of shipment decline. "Despite aggressive pricing and special holiday deals for PCs, consumers' attention was caught by other devices, such as smartphones, media tablets and e-readers," said Meike Escherich, principal analyst at Gartner. "Even though we saw a drop in prices, consumer PC shipments could not match the levels of previous years."

In the fourth quarter of 2011, the PC markets of Italy, Greece, Portugal and Spain were particularly hard hit, with year-on-year PC demand declining 30 per cent and more. The mobile PC market in Western Europe declined 17.5 per cent during the quarter, while the region's desktop PC market decreased 12.1 per cent.

"Uptake of professional PCs for migrations to Windows 7 remained subdued due to the troubled economic outlook," said Ms Escherich. “PC shipments in the professional segment declined 13.5 per cent in the fourth quarter of 2011, but the consumer segment suffered a bigger decline, falling 18 per cent.”

HP not only maintained the No. 1 position for PC shipments in Western Europe, but it increased its lead over Acer, despite a shipment decline of 15.7 per cent in the fourth quarter of 2011 (download tabel 1 onderaan de pagina). Acer continued to decline, but steadied its shipment volumes quarter-on-quarter. Dell struggled with slow demand from large organisations and the public sector, while Asus won several major deals in the retail channel, which raised its total.

"Asus has successfully shifted its portfolio from mini-notebooks to the mainstream and managed to outgrow the market," said Ms Escherich. Lenovo's growth was partly due to its acquisition of Medion in Germany, which helped it secure the No. 5 position. Lenovo offered very aggressive prices, which made Western Europe one of its key regions.

"The impact of the hard-disk drive shortage was minimal in the fourth quarter of 2011, with local vendors feeling most of the impact. If general market conditions continue to deteriorate, we expect hard-disk drive shortages to be just one of many contributors to overall PC market contraction in 2012," said Ms Escherich.

Organisational Politics Will Prevent at Least One-Third of BPM Efforts Through 2016

Mon, 06 Feb 2012 00:00:00 +0100

Organisational politics are emerging as a challenge, and through 2016 they will prevent at least one-third of business process management (BPM) efforts progressing from one-off projects to enterprisewide adoption, according to Gartner, Inc.

Gartner analysts revealed some of their key predictions for BPM in advance of the Gartner Business Process Management Summits, taking place 14-15 March in London, and 25-27 April in Baltimore. A Gartner survey conducted in the fourth quarter of 2011 among 157 BPM professionals revealed that the main obstacle preventing further adoption of BPM was organisational politics (53 per cent of respondents).

"BPM as a discipline requires an organisation to change its culture and its work practices," said Elise Olding, research director at Gartner. "However, very often, this change can lead to power struggles between functional units or an unwillingness to adopt new ways of working, sometimes from senior individuals. These organisational politics can kill a BPM initiative if they are not managed effectively.

"BPM is frequently successful when applied to one-off projects at a departmental level with significant benefits. However, when it comes to scaling this success up to cross-departmental programmes that require collaboration and shared metrics, or that institutionalise BPM throughout the organisation, efforts often stall."

For any BPM initiative to progress beyond simple process improvement projects of limited scope, efforts must be made to understand the organisation's politics, and disciplined efforts undertaken to address them.

"It's up to the business process champion, sponsor or business process director to talk to stakeholders in order to understand and document their thoughts and positions, and so determine the best way of adapting the programme," said Ms Olding.

Although organisational politics look set to hamper some BPM efforts, Gartner predicts that gamification — the broad trend of applying game mechanics to non-game environments to motivate people and change behaviour — will stimulate BPM adoption during the next few years. Gartner predicts that, by 2015, 25 per cent of all redesigned processes will include one or more gamified engagement practices.

Although business processes are not games, they can benefit from a focus on more engaging process designs that deliver immediate feedback and encourage continuous improvement. For example, organisations can achieve better results from their process redesign efforts by increasing participant satisfaction with new processes, connecting participants to common goals, and providing immediate feedback on progress.

Gartner also predicts that, by 2016, 20 per cent of "shadow business processes" will be supported by BPM cloud platforms. Shadow business processes are hidden, informal work practices, often supported under the IT radar by secret spreadsheets, emails, phone calls and face-to-face collaboration.

Shadow processes can involve unstructured processes — that is, nonroutine work. Gartner expects that, by 2015, 40 per cent or more of enterprise work will be nonroutine, up from 25 per cent in 2010.

"BPM cloud platforms are a better and more cost-effective way to automate hidden processes than secret spreadsheets or uncoordinated email threads," said Michele Cantara, research vice president at Gartner. “A BPM cloud platform — BPM platform as a service (BPM PaaS) — can track process steps, provide insight into work item status and help manage the collaborative interactions involved in unstructured processes.”

In particular, high-productivity BPM PaaS will provide shadow process owners with a more attractive and productive user experience, which will encourage them to share their shadow processes.

"To encourage shadow process owners to make their processes more visible, business process improvement leaders, application managers and enterprise architects should proactively suggest high-productivity BPM cloud platforms to their business process stakeholders," said Ms Cantara.

During the next four years, process-related skills, particularly those related to tackling organisational challenges, will become an imperative for organisations as they move from individual projects to enterprisewide process transformation programmes. "Politics will be a challenge that some will not overcome, but the good news is that many of this year's predictions point to a path that leads to BPM success," said Ms Olding.

Additional information is available in the Gartner report "Predicts 2012: Organizational Politics Hampers, Gamification Motivates BPM Adoption.” The report is available on Gartner's website at http://www.gartner.com/resId=1849717. This document is part of Gartner’s overall 2012 Predicts coverage, which is available at www.gartner.com/predicts <http://www.gartner.com/predicts> . The Gartner Predicts Special Report overview includes links to more than 70 Predicts reports, categorised by topic, industry and market.

Platform as a Service Is On the Cusp of Several Years of Strategic Growth

Wed, 01 Feb 2012 00:00:00 +0100

Platform as a service (PaaS) is a core layer of the cloud computing architecture, and its evolution will affect the future of most users and vendors in enterprise software markets, according to Gartner, Inc.

"With large and growing vendor investment in PaaS, the market is on the cusp of several years of strategic growth, leading to innovation and likely breakthroughs in technology and business use of all of cloud computing," said Yefim Natis, vice president and distinguished analyst at Gartner. "Users and vendors of enterprise IT software solutions that are not yet engaged with PaaS must begin building expertise in PaaS or face tough challenges from competitors in the coming years."

PaaS is a common reference to the layer of cloud technology architecture that contains all application infrastructure services, which are also known as "middleware" in other contexts. PaaS is the middle layer of the end-to-end software stack in the cloud. It is the technology that intermediates between the underlying system infrastructure (operating systems, networks, virtualisation, storage, etc.) and overlaying application software. The technology services that are part of a full-scope comprehensive PaaS include functionality of application containers (servers), application development tools, database management systems, integration middleware, portal products, business process management suites and others — all offered as a service.

In the Gartner Special Report, "PaaS 2012: Tactical Risks and Strategic Rewards", Gartner analysts said 2011 was a pivotal year for the PaaS market. As Gartner predicted last year in the report "PaaS Road Map: A Continent Emerging", the broad vendor adoption in 2011 amounted to a sound industry endorsement of PaaS as an alternative to the traditional middleware deployment models.

In 2012, the PaaS market is at its early stage of growth and does not yet have well-established leaders, best use or business practices or dedicated standards. The adoption of PaaS offerings is still associated with some degree of uncertainty and risk.

"However, PaaS products are likely to evolve into a major component of the overall cloud computing market, just as the middleware products — including application servers, database management systems (DBMSs), integration middleware and portal platforms — are the core foundation of the traditional software industry," Mr Natis said. "The tension between the short-term risk and the long-term strategic imperative of PaaS will define the key developments in the PaaS market during the next two to three years."

Some of the newly announced PaaS offerings will reach general availability late in 2012, and by the end of 2013, all major software vendors will have competitive production offerings in the PaaS market. By 2016, competition among the PaaS vendors will produce new programming models, new standards and new software market leaders. However, until then, users will continue to experience architectural changes to technologies, business models and vendor alignments in the PaaS market.

As vendors continue to invest in PaaS services, and the major software vendors look to deliver comprehensive PaaS service portfolios, activity in all segments of PaaS will accelerate and the fast pace of growth and change in the PaaS market will create confusion, making user adoption decisions more difficult.

"While there are clear risks associated with the use of services in the new and largely immature PaaS market, the risk of avoiding the PaaS market is equally high," said Mr Natis. "The right strategy for most mainstream IT organisations and software vendors is to begin building familiarity with the new cloud computing opportunities by adopting some PaaS services now, albeit with the understanding of their limitations and with the expectation of ongoing change in the market offerings and use patterns."

Nearly One Third of Organisations Use or Plan to Use Cloud Offerings to Augment Business Intelligence Capabilities

Wed, 25 Jan 2012 00:00:00 +0100

Nearly one third of organisations either already use or plan to use cloud or software-as-a-service (SaaS) offerings to augment their core business intelligence (BI) functions, according to Gartner, Inc.

According to a survey of 1,364 IT managers and business users of BI platforms in the fourth quarter of 2011, only 17 per cent of organisations have replaced or plan to replace parts of their core BI functions with cloud/SaaS offerings. However, almost a third (27 per cent) already use or plan to use cloud/SaaS options to augment their BI capabilities for specific lines of business or subject areas in the next 12 months.

“Business users are often frustrated by the deployment cycles, costs, complicated upgrade processes and IT infrastructures demanded by on-premises BI solutions,” said James Richardson, research director at Gartner. “SaaS- and cloud-based BI is perceived as offering a quicker, potentially lower-cost and easier-to-deploy alternative, though this has yet to be proven. It’s evident that, despite growing interest, the market is confused about what cloud/SaaS BI and analytics are and what they can deliver.”

Gartner has identified three major drivers for the adoption of cloud/SaaS offerings for BI, analytics and performance management:

Time to value: The use of SaaS BI may lead to faster deployment, insight and value, particularly where IT is constrained by existing work and/or limited budget so that it cannot respond to demands for information and analysis as quickly as the business requires.

Cost concerns: The cost dynamic differs between on-premises and SaaS models. Software purchased as a service can usually be expensed, rather than capitalised, on the balance sheet. Buyers often think that SaaS is cheaper, but the reality is that this is unproven. Gartner's cost models show SaaS can be cheaper over the first five years, but not thereafter. The long-term benefits lie elsewhere — in terms of cash flow, reduced IT support costs, etc.

Lack of available expertise: SaaS analytic applications offer prebuilt intellectual property that can help firms work around a lack of the skills needed to build their own analytic solutions.

Instead of disrupting the enterprise BI platform and corporate performance management suite market, a more likely scenario is that SaaS and cloud-based offerings will tap into new opportunities — e.g., with midmarket companies that have yet to invest in BI, or by offering domain-specific analytics.

“If their operational business applications are in the cloud, organisations should consider pursuing cloud BI/analytics for those domains,” said Mr Richardson. “However, they must assess risks on an ongoing basis and ensure their chosen cloud provider has appropriate business skills to provide a viable outcome. They must also ensure their BI strategy outlines how to ensure that data flows to and from these solutions in order not to become yet more silos of analysis.”

For details of the Gartner Business Intelligence Summit 2011 taking place on 6-7 February in London, please visit www.gartner.com/eu/bi

Apple Became the Top Semiconductor Customer in 2011

Tue, 24 Jan 2012 00:00:00 +0100

Leading electronic equipment manufacturers remained the centre of the semiconductor world in 2011, accounting for \$105.6 billion of semiconductors on a design total available market (TAM) basis — 35 per cent of semiconductor vendors' worldwide chip revenue, according to Gartner, Inc. This represented a year-on-year increase of \$1.8 billion, or 1.8 per cent from 2010.

Design TAM represents the total silicon content in all products designed by a certain electronic equipment manufacturer or in a certain region, while purchasing TAM represents the total silicon content purchased directly by a certain electronic equipment manufacturer or in a certain region. Design TAM is a useful index for semiconductor vendors when they are considering how to allocate their sales or field application engineer resources by customer or region. Purchasing TAM is a useful index for semiconductor vendors when they are considering how to establish an efficient distribution network by customer or region.

"The major growth drivers in 2011 were smartphones, media tablets and solid-state drives (SSDs)," said Masatsune Yamaji, principal research analyst at Gartner. "Those companies that gained share in the smartphone market, such as Apple, Samsung Electronics and HTC, increased their semiconductor demand, while those who lost market share in this segment, such as Nokia and LG Electronics, decreased their semiconductor demand. Media tablets were also a growth driver for the semiconductor market throughout 2011."

"Given the rapidly changing competitive structure of the IT and electronics industry, no semiconductor device vendor can afford just to monitor the requirements of the current market leaders," Mr Yamaji said. "Vendors need to be constantly looking for new market entrants who will, in turn, be tomorrow's market leaders."

Within the top 10 rankings, three companies were from the Americas, three from Asia/Pacific, three from Japan and one from Europe, the Middle East and Africa (EMEA). Apple led the market in 2011 (Download de tabel onderaan de pagina), achieving significant growth, as it has done for the past five years. As a result, Apple became the biggest customer of semiconductor chip vendors in 2011, climbing two places in the ranking, from third in 2010.

Apple gained a much greater share of the smartphone market, and its media tablet business was also highly successful in 2011. While DRAM prices fell drastically in 2011, and many PC vendors decreased their total semiconductor demand accordingly, the success of the MacBook Air enabled Apple to increase semiconductor chip demand even in its PC business.

Mr Yamaji said that as more brand-name companies are increasing their production outsourcing to original design manufacturers (ODMs) and electronics manufacturing services (EMS) providers, semiconductor procurement by ODMs and EMS providers has increased year over year. Currently, three of the top 10 purchasing TAM companies are so-called contract manufacturers.

"Semiconductor chip vendors must pay attention not just to the design TAM and purchasing TAM by company, but also by region," said Mr Yamaji. "This is the key to avoiding inappropriate sales resource allocation. They must keep an eye on design-win opportunities in the US, while also establishing a strong distribution network in China."

*Note to Editors on Nokia and Sony
In the ranking table, two joint ventures are included as stand-alone firms, as they are independent buying centres: Sony Ericsson and Nokia Siemens Networks. They are still considered independent companies in this report. This means Nokia does not include the TAM of Nokia Siemens Networks, and Sony does not include the TAM of Sony Ericsson.

Additional information is available in the report "Market Insight: Apple Led OEM, ODM and EMS Semiconductor Demand in 2011." The report is available on the Gartner website.

Master Data Management Is Critical to Achieving Effective Information Governance

Thu, 19 Jan 2012 00:00:00 +0100

Master data management (MDM) is critical to achieving effective information governance, according to Gartner, Inc. Failure to manage information accurately has been the root cause of several incidents, including the leak of sensitive information to WikiLeaks, and can be fatal to the success of MDM programmes.

“The recent global financial crisis has put information governance in the spotlight," said Ted Friedman, vice president and distinguished analyst at Gartner. “Information governance is a priority of IT and business leaders as a result of various pressures, including regulatory compliance mandates and the urgent need for improved decision-making.”

MDM is a technology-enabled business discipline in which business and IT organisations work together to ensure the uniformity, accuracy, stewardship, semantic consistency and accountability of the organisation's official, shared master data assets. It is increasingly identified by organisations with (1) the launch of a formal enterprise information management (EIM) strategy and (2) the foundation of an information governance programme that supports EIM.

MDM is one of the most notable information governance programmes, and the MDM market continues to grow because it focuses on specific business drivers and business-led initiatives. Gartner estimates worldwide MDM software revenue will reach \$1.9 billion in 2012, a 21 per cent increase from 2011.

Gartner has compiled several MDM predictions to help organisations plan for 2012 and beyond. They include the following:

By 2016, 20 per cent of CIOs in regulated industries will lose their jobs for failing to implement the discipline of information governance successfully.

“We’ve seen rapidly growing interest in information governance-related topics, and this trend shows no sign of abating,” said Debra Logan, vice president and distinguished analyst at Gartner. “Information governance is the only way to comply with regulations, both current and future, and responsibility for it lies with the CIO and the chief legal officer. When organisations suffer high-profile data losses, especially involving violations of the privacy of citizens or consumers, they suffer serious reputational damage and often incur fines or other sanctions. IT leaders will have to take at least part of the blame for these incidents.”

In 2012, highly regulated businesses that do not already have information-archiving technology should invest in it in order to bring email and files under control. The governance-related technology of information archiving has reached early majority and is a key component of an evolving information governance technology strategy.

Through 2016, spending on governing information must increase to five times the current level to be successful.

During the next few years, information governance initiatives will broaden significantly to include more subdisciplines — information quality, life cycle management/retention, privacy and security — and more of the organisation’s critical data. More people will have to be assigned to information governance, both in dedicated roles (such as information architect and data analyst) and as part-time contributors (such as stakeholders participating in information governance councils and data stewards).

“Regardless of the structure, information governance responsibilities will become part of the roles of more people, and the time and funding allocated to these roles will need to increase dramatically in the typical organisation,” said Mr Friedman. “Organisations will have to increase their investment in related tools and technologies, both to facilitate the development and refinement of policy, and to distil policies into executable rules that tools can apply to information.”

It is important to set an expectation that investment in information governance will have no end — information assets will be strategic to the organisation for as long as it lasts, so information governance must be an "evergreen" programme with ongoing funding.

Through 2016, only 33 per cent of organisations that initiate an MDM programme will succeed in demonstrating the value of information governance.

When IT managers start an MDM programme, they often struggle to get business stakeholders on board. They therefore fail to demonstrate the business value of MDM, as the necessary changes in business processes are not supported.

“An MDM programme is not a project but a commitment by the business to leverage information for reuse in order to improve business process outcomes,” said Andrew White, research vice president at Gartner. “The real barriers to MDM adoption remain ones of change management, governance process, organisational change and measurement of business value. The creation of effective governance organisations, policies and processes that focus on the master data life cycle is key to success with MDM.”

Organisations need to create an MDM governance framework, an organisational structure, and a set of roles and responsibilities to suit their MDM strategy and politics.

Additional information is available in the Gartner report “Predicts 2012: Information Governance and MDM Programs Gain Traction," available on Gartner’s website.

More Than 2,300 CIOs Shows Flat IT Budgets in 2012, but IT Organisations Must Deliver on Multiple Priorities

Wed, 18 Jan 2012 00:00:00 +0100

IT organisations will have to deliver on multiple priorities without an increase in their IT budget, as CIO IT budgets are expected to be flat, increasing just 0.5 per cent, with declining IT budgets in North America and Europe, according to a global survey of CIOs by Gartner, Inc.'s Executive Programs.

The worldwide CIO survey was conducted in the fourth quarter of 2011, and it included 2,335 CIOs, representing more than \$321 billion in CIO IT budgets and covering 37 industries in 45 countries. The Gartner Executive Programs report, "Amplifying the Enterprise: The 2012 CIO Agenda" represents the world's most comprehensive examination of business priorities and CIO strategies.

"Technology's role in the organisation is increasing. This does not mean, however, that the role of the IT organisation is increasing," said Mark McDonald, group vice president for Gartner Executive Programs and Gartner Fellow. "CIOs concentrating on IT as a force of operational automation, integration and control are losing ground to executives who see technology as a business amplifier and source of innovation. Effective leaders use technology, which includes IT, to strengthen the customer experience and eliminate costly internal distortions. They are using technology to 'amplify' the enterprise."

"In the face of continued economic uncertainty and government austerity, business strategies call for a combination of growth and operational efficiency. As reflected in the 2012 CIO Agenda survey findings, effective leaders see customers as the key factor in both of these strategic components, with the customer experience their focal point in reconciling potentially conflicting goals," Mr McDonald said. "Present economic conditions may tempt CIOs to force IT back into cost-cutting mode, but senior executives expect technology — and this includes IT — to address the tough challenges by amplifying enterprise strategies and operations."

CIO's increasingly see technologies such as analytics/business intelligence, mobility, cloud and social in combination rather than isolation to address business priorities. Changing the customer experience requires changing the way the company interacts externally rather than operates internally.

Analytics/business intelligence was the top-ranked technology for 2012 (download tabel 1 hieronder) as CIOs are combining analytics with other technologies to create new capabilities. For example, analytics plus supply chain for process management and improvement, analytics plus mobility for field sales and operations, and analytics plus social for customer engagement and acquisition.

Sixty-one per cent of organisations responding to the survey say they will be improving their mobile capability over the next three years. The majority have a mobility strategy that calls for becoming a market leader in their industry — so there will be significant competition as everyone seeks to be "above average" in its industry.

Overall, CIOs rank growth as their top priority — despite tough economic conditions and future uncertainties. They are particularly attentive to attracting and retaining customers and to creating products and services.

Meeting business expectations for increased growth, reduced cost or a transformed customer experience normally involves a significant increase in IT resources. Forty-six per cent of CIOs reported that their CIO IT budget would increase from 2011 to 2012 in terms of actual spending. The average firm in this year's survey will see a modest budget increase of between 2 and 3 per cent.

On a global weighted average basis, CIO IT budgets are anticipated to be essentially flat for 2012. These investments are strongest among organisations in Latin America (with a 12.7 per cent IT budget increase) and the Asia/Pacific region (with a 3.4 per cent increase), while investments are weakest among the largest organisations in North America (decreasing 0.6 per cent) and Europe (down 0.7 per cent). Larger organisations, those with IT budgets more than \$500 million, have continued to cut their IT expenditures, offsetting modest growth in the rest of the survey population.

"The 2012 Gartner CIO Agenda survey results show that CIOs believe that the customer experience is the greatest opportunity for IT-enabled innovation," said Dave Aron, vice president and Gartner Fellow. "As business executives see the potential of technology to transform customer channels and the customer experience, their view of technology has leapfrogged conventional ideas of IT."

Technology is playing an increasing role in enterprise growth, innovation and operational performance while technology's definition now incorporates new combinations of traditional IT systems, consumer devices and their respective services.

"Applying technology as part of amplifying the enterprise reflects both the changing nature of business strategies, and executive expectations about the role of technology in realising those strategies. Amplifying products, services and operations requires an organisation to strengthen the customer experience and send clearer market signals," Mr McDonald said. "Mobility, social media, information and analytics can be used to re-imagine the customer experience, as well as sales and service channels. These technologies do more than automate or administer processes; they are the processes and the sources of value."

PC Shipments in Fourth Quarter of 2011 Declined 1.4 Per Cent; Year-End Shipments Increased 0.5 Per Cent

Thu, 12 Jan 2012 00:00:00 +0100

After two quarters of positive growth, worldwide PC shipments totalled 92.2 million units in the fourth quarter of 2011, a 1.4 per cent decline from the fourth quarter of 2010, according to preliminary results by Gartner, Inc. These figures were in line with Gartner’s earlier forecast of a 1 per cent decline for the fourth quarter of 2011.

“Continuously low consumer PC demand resulted in weak holiday PC shipments,” said Mikako Kitagawa, principal analyst at Gartner. “While economic uncertainty in Western Europe had an effect on consumer PC shipments, expectations of a healthier economic outlook in North America could not stimulate consumer PC demand in that region. The healthy professional PC market as well as growth in emerging markets could not compensate for the weaknesses in mature markets, with overall growth still negative.”

Hard-disk drive (HDD) shortages triggered by the October 2011 floods in Thailand had a limited impact on fourth-quarter PC shipments and prices. However, Gartner analysts said a major impact will be felt, and this is expected to materialise in the first half of 2012, and potentially continue throughout 2012. These shortages will temporarily lower PC shipment growth during 2012.

“Ultrabooks were quietly introduced into the market during the 4Q11 holiday season,” Ms Kitagawa said. “Ultrabooks didn’t seem to draw consumers’ attention. Consumers had very little understanding and awareness of ultrabooks, and only a small group of consumers was willing to pay the price premium for such models. However, as has been seen this week at the International Consumer Electronics Show (CES) show, 2012 is a big debut stage for ultrabooks.”

HP retained its No. 1 position in the fourth quarter of 2011, despite a shipment decline of 16.2 per cent year over year. While the company’s new CEO, Meg Whitman, cleared up some confusion surrounding its PC business, its 4Q11 results were affected by the noise around this issue. HP also had to battle against aggressive pricing from competitors and deal with weak consumer PC demand in the holiday season.

Lenovo experienced the strongest growth among the top five vendors, as its PC shipments grew 23 per cent in the fourth quarter of 2011, and it further cemented its place as the No. 2 vendor in global PC shipments. The company’s growth was attributed to its aggressive pricing in both the professional and consumer markets.

Dell had a good quarter with shipment growth in most regions. While the consumer market remained a weak point, Dell enjoyed stable growth in the professional sector, driven by upgrades to Windows 7. Asia/Pacific continued to be the major growth market for Dell, as it achieved 30 per cent growth in the region. Asus stayed in the No. 5 position despite generally weak consumer sales. Asus’s shift from mini-notebooks to regular notebooks was successful, as close to 80 per cent of Asus mobile PCs shipments were regular notebooks in the fourth quarter of 2011.

In the US, PC shipments totalled 17.9 million units, a 5.9 per cent decline compared with the same quarter last year. US holiday sales were not all that exciting for PC vendors. As expected, consumers’ attention was diverted toward other product categories, especially smartphones and media tablets. All-in-one (AIO) desktop PCs drew consumers’ attention during the holiday season. The main attractions were large screen sizes and high-definition viewing capability.

HP maintained the No. 1 position in the US PC market in the fourth quarter of 2011, but Dell gained ground as HP lost substantial market share in the quarter. Apple enjoyed the strongest growth among the top five vendors. Lenovo’s US PC shipments grew 40 per cent year-over-year, but its shipment volume was not enough to squeeze into the top five ranking (it was in the sixth position).

In Asia/Pacific, PC shipments reached 30.4 million units, an 8.5 per cent increase from the fourth quarter of 2010. The market performance was below Gartner’s anticipated growth of 10.6 per cent. The preliminary findings show weaker shipment growth in China, India and Thailand.

The PC market in Latin America grew 11.2 percent in the fourth quarter of 2011, as shipments reached 9.3 million units. Because whitebox PC vendors make up a large portion of Latin America’s PC market, last quarter Gartner expected Thailand’s HDD shortage to moderately affect growth in Latin America in the near term. Thus far, anecdotal evidence indicates that many local vendors had quickly ordered sufficient inventory to exit the fourth quarter unaffected.

PC shipments in Japan declined 2.3 per cent in the fourth quarter of 2011, as shipments totalled 3.9 million units. This was better than Gartner’s earlier projection of an 8 percent decline. The professional market showed a high double-digit decline, while the consumer market saw mid-single-digit growth.

For the year, worldwide PC shipments totalled 352.8 million units in 2011, a 0.5 per cent increase from 2010. A weak consumer PC market, particularly in mature markets, was a major contributor to this stagnation, despite good growth in the professional market. Emerging markets grew steadily, driven by low initial PC penetration.

Among the top five PC vendors, Lenovo took over the No. 2 spot from Dell. Lenovo continued to gain market share via aggressive pricing and acquisitions, namely of NEC and Medion. Asus climbed from sixth to fifth, replacing Toshiba.

PC shipments in EMEA totalled 29 million in the fourth quarter of 2011, a 9.6 per cent decline from the fourth quarter of 2010. The EMEA PC market saw a fourth consecutive quarterly decline, resulting in year-end shipments declining 7.2 per cent in 2011.

“The PC market remained weak during the holiday season with seasonal growth lower than normally expected,” said Ranjit Atwal, research director at Gartner. “Western Europe in particular saw weak consumer growth as the austere economic environment squeezed consumer spend on PCs. By contrast, the Middle East and Africa and some of the Central and Eastern Europe regions saw a positive quarter, so we are starting to see diverging PC growth trends compared to Western Europe.”

The impact of the HDD shortage was marginal, with local vendors seeing most of the impact. Vendors were largely un-impacted by the HDD shortage with most of the market decline largely attributed to slow demand in the consumer PC segment.

“The professional PC segment performed well as end of year budgets were used to purchase PCs, but we expect the segment will face a difficult year as many verticals are expecting a much tougher business environment in 2012,” said Mr Atwal.

HP not only retained the No. 1 position, but it increased its lead over Acer, despite declining shipments in the fourth quarter of 2011. Acer had the worst performance of the quarter among the top five vendors, and it continued to decline more than 30 per cent year-on-year. However, Acer’s shipment volumes remained levelled quarter-on-quarter. Dell, ASUS and Lenovo all achieved growth and collectively increased their market share to more than 30 per cent for the first time.

HP, Acer and Dell continue to be under particular pressure as they comprehend how to address the weakening consumer market. More importantly, all the PC vendors see increasing uncertainty around how to evolve their business models to counter a weak business environment.

“We expect most vendors will put their emphasis on ultra-books and Windows 8 in 2012. However, with the divergence of consumer spend toward alternative devices intensifying in 2012, the new ultra-book platform and surrounding ecosystem will need to form a highly compelling proposition to withstand this competition for consumer spend from other devices,” said Mr Atwal.

Fewer Than 30 Per Cent of Business Intelligence initiatives Will Align Analytic Metrics Completely With Enterprise Business Drivers by 2014

Wed, 11 Jan 2012 00:00:00 +0100

By 2014, fewer than 30 per cent of business intelligence (BI) initiatives will align analytics completely with enterprise business drivers, despite alignment being the foremost BI challenge, according to Gartner, Inc. Cloud offerings will account for just 3 per cent of BI revenue by 2013, despite every major BI platform vendor presenting one. In addition, Gartner analysts said that by 2013, BI initiatives will be based on an organisational model that strikes a balance between centralised and decentralised delivery.

“The immediate future of the BI landscape is one of a disconnect between marketing hype about pressing challenges on the one hand and reality on the other,” said Andreas Bitterer, research vice president at Gartner. “The need for analytics does not match most organisations’ skill requirements; vendor hype for cloud-based BI is not reflected in revenue and customer adoption, and there is a struggle between centralised and decentralised organisational models of BI delivery.”

Gartner’s three central predictions for the BI market are:

By 2013, every major BI platform vendor will present a cloud offering, but these will account for just 3 per cent of total BI revenue.

The BI market is not exempt from cloud-related hype. Current adoption of "cloud BI" by user organisations lags far behind the expectations of vendors, which are busy creating and marketing new off-premises solutions. Organisations that have already invested in on-premises BI infrastructure are hesitating to identify a segment of their BI initiative for which data can be moved into the cloud and reports and dashboards received from a cloud provider. However, companies that have subscribed to a specific cloud application, such as customer relationship management, payroll or help desk service, are more inclined to use BI functionality delivered by their cloud provider, as they see it essentially as an extension of the cloud application.

By 2013, BI initiatives will be based on an organisational model that strikes a balance between centralised and decentralised delivery.

Many BI programmes have departmental roots with analytical resources embedded in the business. This model has worked well in serving departmental needs, but it lacks consistency in terms of data definitions and measures across an entire organisation. Often, the IT organisation has solved this inconsistency problem by establishing a central team to deliver BI. However, such an overly centralised model lacks the agility and familiarity of the decentralised model. A hybrid delivery model enables greater consistency and economies of scale, more autonomy and faster turnaround times.

By 2014, fewer than 30 per cent of BI initiatives will align analytic metrics completely with enterprise business drivers.

The foremost BI challenge is to align initiatives with corporate strategy and objectives, but fewer than one-third of organisations have a documented analytics, BI or performance management strategy. Organisations often develop and deploy hindsight-oriented reports and/or query applications focusing on metrics that users may find interesting, but they don't represent the operational or strategic controls used to facilitate business performance.

With the increasing consumerisation of BI (for example, mobile BI), the growing volume and variety of available data, and the soaring speed of business, it can be challenging to establish appropriate "guard rails" for analytic implementations to ensure that the right data is presented to the right people and processes at the right time. These user/data growth factors also challenge the cohesion of metrics frameworks among lines of business, resulting in business functions that operate in conflict with one another; for example, one group may focus on profitability, while another concentrates on market share.

“Throughout 2012 and beyond, BI will remain subject to nontechnical challenges,” said Mr Bitterer. “IT leaders should concentrate not only on the technological aspects of BI, but also on the severe lack of analytical skills. Second, they should use a ‘think global, act local’ approach in their BI programmes to provide the right level of autonomy and agility to avoid the bottlenecks that overly centralised BI teams create, while simultaneously establishing enough consistency and standards for enterprisewide BI adoption.”

More information is available in the report "Predicts 2012: Business Intelligence Still Subject to Nontechnical Challenges,” available on Gartner's website.

Worldwide IT Spending to Grow 3.7 Per Cent in 2012

Thu, 05 Jan 2012 00:00:00 +0100

Worldwide IT spending is forecast to total \$3.8 trillion in 2012, a 3.7 per cent increase from 2011, according to the latest outlook by Gartner, Inc. In 2011, worldwide IT spending totalled \$3.7 trillion, up 6.9 per cent from 2010 levels.

Gartner has revised downward its outlook for 2012 global IT spending from its previous forecast of 4.6 per cent growth. All four major technology sectors computing hardware, enterprise software, IT services and telecommunications equipment and services are expected to experience slower spending growth in 2012 than previously forecast.

"Faltering global economic growth, the eurozone crisis and the impact of Thailand's floods on hard-disk drive (HDD) production have all taken their toll on the outlook for IT spending," said Richard Gordon, research vice president at Gartner.

The Thailand floods, that left one-third of the country under water, are having serious implications for businesses worldwide, particularly with computer and storage purchases.

"Thailand has been a major hub for hard-drive manufacturing, both for finished goods and components," Mr Gordon said. "We estimate the supply of hard drives will be reduced by as much as 25 per cent (and possibly more) during the next six to nine months. Rebuilding the destroyed manufacturing facilities will also take time and the effects of this will continue to ripple throughout 2012 and very likely into 2013."

Although large PC OEMs will see fewer problems than others in the industry, no company will be wholly immune to the effects on the HDD supply chain. Gartner has reduced its shipment forecast for PCs, which has impacted the short-term outlook for the hardware sector. The impact of HDD supply constraints on HDD and PC shipments in the first half of the year compound the cautious environment for hardware spending in general.

Telecom equipment spending is projected to show the strongest growth, with revenue increasing 6.9 percent in 2012, followed by the enterprise software market, which will grow 6.4 per cent.

"With the eurozone crisis causing uncertainty for both businesses and consumers in Western Europe we have adjusted our forecast, and we expect IT spending in Western Europe to decline 0.7 per cent in 2012," Mr Gordon said.

More-detailed analysis on the outlook for the IT industry will be presented in the webinar "Gartner IT Spending Forecast." The complimentary webinar will be hosted by Gartner on 10 January at 5pm CET. To register for the webinar, please go to Gartner.com. Gartner analysts will also examine the impact of the eurozone crisis on the IT industry during the complimentary webinar, “Euro Crisis: Plan Now to Minimize Impact on IT and Business” at 3pm and 6pm CET on 19 January. To register, please visit Gartner.com.

Master Data Management Software Revenue to Grow 21 Per Cent in 2012

Tue, 03 Jan 2012 00:00:00 +0100

Worldwide master data management (MDM) software revenue will reach \$1.9 billion in 2012, a 21 per cent increase from 2011, according to Gartner, Inc. The market is forecast to reach \$3.2 billion by 2015.

“This is the biggest annual growth we’ve seen for this market since 2008,” said Colleen Graham, research director at Gartner. “Pressures to optimise costs and efficiencies in a heterogeneous IT environment are driving organisations to turn to MDM as a more efficient way to manage and maintain data across multiple sources. In addition, the increasing governance, risk and compliance regulations are forcing organisations to focus on MDM to support these initiatives.”

“MDM has become a critical discipline required for dealing with the challenges of social data, ‘big data’ and data in the cloud,” Ms Graham said.

From a regional perspective, North America and Europe will drive the demand for MDM, and both regions will grow at a steady pace to reach the billion-dollar mark, in 2013 for North America and in 2015 for Europe. In 2013, MDM software revenue will see faster growth in Asia/Pacific, where revenue will increase by 30 per cent from 2012 to reach \$209 million.

Within the overall MDM market, more than half the revenue is driven by products from small and best-of-breed vendors, as the market continues to favour specialised solutions over "generic" offerings. However, the overall MDM market is dominated by three major players — IBM, Oracle and SAP.

“In the next four years we expect larger vendors will continue to acquire for this specialisation while smaller vendors will acquire each other to build market share and increase the functionality within their portfolios,” said Chad Eschinger, research director at Gartner.

However, the variety of technologies that can be applied to an MDM initiative leaves the door open for the entrance of data integration and data quality providers, in particular. As more midsize organisations adopt MDM in the course of the next four years, they are demanding lower prices and more flexibility from vendors. As a result, many new MDM vendors and offerings capturing this market will be focused on areas such as open source, as well as cloud computing/software as a service.

The largest domains of the MDM software market are MDM of customer data and MDM of product data, each of which is predicted to more than double in size over the next four years. MDM of customer data helps an organisation cross-sell and cross-market, as well as retain customers and provide a consistent high-quality customer experience. The market for MDM of customer data is expected to reach \$644 million in 2012 and to exceed \$1 billion in 2015. The market for MDM of product data, which helps an organisation store product-related master data, metadata, or both, is projected to reach \$688 million in 2012 and to surpass \$1.1 billion in 2015.

“The increased demand for more effective decision-making and a focus on improving the timeliness and accuracy of business decisions makes MDM paramount for organisations,” said Ms Graham. “MDM supports these goals by ensuring the high quality of key data needed at the point of decision, removing uncertainty and increasing confidence.”

Worldwide Semiconductor Revenue Grew 1 Per Cent to Reach \$302 Billion in 2011

Mon, 19 Dec 2011 00:00:00 +0100

Worldwide semiconductor revenue grew 0.9 per cent from 2010, reaching \$302 billion in 2011, according to preliminary results by Gartner, Inc. After a strong start to the year, worries about the strength of the macroeconomy slowed equipment and semiconductor orders in 2011.

"The industry did well in the early part of the year, in many cases entering the year with backlog from an exuberant 2010," said Stephan Ohr, semiconductor research director at Gartner. "But uncertainty about the state of the macroeconomy set in at the midpoint of the year. Consumers held off purchases, and infrastructure expansion plans languished as governments resisted assuming more debt. Equipment inventories began to build as the year progressed, with resulting ripples throughout the semiconductor industry."

Intel held the No. 1 position for the 20th consecutive year, and 2011 marks Intel's highest-ever market share at 16.9 per cent. Its previous high was in 1998 when it commanded 16.3 per cent of the market. Intel saw strong growth in the first half of the year as the PC market stocked up inventory in anticipation of a strong second half of the year. Intel had a strong year for its server products Westmere and Nahelem. Intel's revenue for 2011 includes the wireless business unit (BU) purchased from Infineon in the first quarter of the year, a transaction worth about \$1.4 billion to Intel's revenue in 2011.

At No. 2, Samsung Electronics saw its revenue grow slightly above the industry average despite its exposure to the declining DRAM market. Samsung's NAND business saw healthy revenue growth, but this was broadly in line with the overall NAND market growth. Samsung's non-memory business was by far the strongest growth area for the company, with application-specific devices, particularly wireless applications processors. The strongest growth came from Samsung's relationship with Apple, where it is supplying the A5 processor used in the iPhone 4s and iPad2 media tablet.

Texas Instruments, in the No. 3 position, has arguably the strongest manufacturing capability in the analogue semiconductor industry — a consequence of acquisitions made in 2010. However, uncertainties in the macroeconomic environment affected revenue for all analogue suppliers as orders slowed in the third quarter of 2011 and again in the fourth. The slowdown for power management devices — important in the construction of new data centres, and in the deployment of personal computers — was not as severe as the slowdown in amplifiers and data converters.

As a group, the processor makers — Intel, Qualcomm, Advanced Micro Devices and Nvidia — outperformed the rest of the industry. Intel's server business grew despite slowdowns in PC production. Qualcomm was carried by ongoing shifts to 4G and LTE mobile services. Nvidia's Tegra platform supported tablet makers hoping to capture some of the enthusiasm associated with tablet PCs.

Memory makers among the top 25 semiconductor suppliers — Hynix, Micron and Elpida — showed revenue declines as a consequence of DRAM price declines and loss of market share in the DRAM space. Samsung's growth of 3.7 per cent growth was carried as much by mobile phone application-specific integrated circuits (ASICs) as by memory. SanDisk grew 33.5 per cent on demand for flash memory.

Gartner Survey Shows 18 Per Cent of Respondents Are Not PCI-Compliant

Thu, 15 Dec 2011 00:00:00 +0100

PCI data security standards may be a hot topic, but a recent survey by Gartner, Inc. found that 18 per cent of respondents admitted to not being PCI-compliant, even though the survey data suggested that they should be.

Gartner conducted a series of kiosk-based surveys between June and September of this year at Gartner's annual IT Security Summits and Catalyst events in North America and its Security & Risk Management Summit in EMEA. The surveys of 383 IT managers found trends in buying behaviours and permitted predictions of future security spending.

"Given that many of the technology providers in the security market target their products and help with PCI-related compliance initiatives, it came as something of a surprise that such a high percentage of survey respondents said that they were not PCI-compliant," said Lawrence Pingree, research director at Gartner. "Technology and service providers should continue to market their ability to help solve customer issues with compliance for the PCI security standards. End-user organisations must also work to address the awareness of their PCI security standards compliance status, so that their employees know whether or not they are compliant with the PCI standards."

Mr Pingree said that change is the key theme to the budget survey. Last year, 55 per cent of those surveyed said their budgets would stay the same for next year; however, this year only 30 per cent confirmed this. Furthermore, 33 per cent of respondents expected growth in their budgets, with 22 per cent expecting a 5 per cent or more IT budget increase compared with 20 per cent last year, meaning there has been a slight increase in the overall spending for security. This is despite the fact that 15 per cent of this year's respondents said they expect a budget decrease; last year 9 per cent predicted a decrease in their overall IT budget.

This year, the IT security budget planners who are expecting an increase are expecting a fairly significant increase in their security budget allocations over last year. Last year's budget expectations were for a 6 per cent share of the total IT budget expenditure to be allocated to the security function. In this year's survey, that allocation has increased to a mean of 10.5 per cent, an increase of over 4 per cent. This means that roughly 10 cents of every IT dollar allocated will be spent on IT security.

Gartner found that the dominant spending this year was on personnel, which is similar to last year; however, this year allocation is down slightly from 35 to 32 per cent. Consulting services and outsourcing services are also both lower from last year's numbers, with a significant consulting decrease from 14 per cent last year to 11 per cent this year, and outsourcing dropped from 18 per cent last year to 11 per cent this year.

Budgetary increases this year came in both hardware and software spending, with hardware up from 18 per cent last year to 22 per cent this year, and software up from 20 per cent to 22 per cent as organisations continue to deploy products to address heightened security issues based on recent press and large-company data breaches.

Mr Pingree said that organisations are planning on reducing resources to administer the security technologies they have added to their portfolios this year by leveraging better initial integration or through reduced ongoing external consulting. They will most likely do this by utilising increased automation in many security products and working to make their internal security workflows more efficient, lowering demand for overall human resources or consulting costs.

When asked about the top security projects for 2011, respondents put data loss prevention (DLP) at the top of their list with user provisioning and event management coming in second and security information and event management (SIEM) coming in third on the priority list. Intrusion detection, network access control, application security, and IT governance, risk and compliance management (GRCM) tools also rank high up on the list.

"This new focus on data-loss prevention is critical when considering the dynamic nature of cloud environments and trends to virtualise application workloads," said Mr Pingree. "This will be considerably important in order to support the attachment of business policy controls to data types as the dynamic nature of data movement within application workloads is sought."

Worldwide Semiconductor Capital Equipment Spending to Decline 19.5 Per Cent in 2012

Wed, 14 Dec 2011 00:00:00 +0100

Worldwide semiconductor capital equipment spending is expected to total \$51.7 billion in 2012, a 19.5 per cent decline from projected 2011 spending of \$64.2 billion, according to Gartner, Inc.

"Natural disasters and the economy have certainly impacted the semiconductor capital equipment market in 2011, but we expect equipment spending to increase 13.7 per cent in 2011," said Klaus Rinnen, managing vice president at Gartner. "However, equipment providers will not be as lucky in 2012. The impact of the slowing macro economy, high inventories and a sluggish PC industry — due to both weak demand and the flooding in Thailand — will temper the outlook for 2012."

Gartner expects the slowdown to last through the second quarter of 2012. By that time, the supply and demand should be in balance with the semiconductor side possibly even beginning to see some undersupply. Once the supply is balanced, DRAM and foundry will need to begin to increase spending to meet an increase in demand as consumers resume spending and the PC market rebounds. 2013 is expected to be the next growth year, with capital spending growing 19.2 per cent.

Wafer fab equipment (WFE) revenue is expected to grow 9.8 per cent in 2011. In 2011, continued demand for leading-edge WFE technologies is again benefiting the high-priced 193 nm immersion lithography segment and associated equipment in the lithography cell. WFE spending in 2012 will be primarily on leading-edge technology as the 20 nm and 28/32 nm ramp-ups continue. Gartner expects WFE to decline by 22.9 per cent in 2012, rebounding in 2013 to 23.7 per cent.

Orders for packaging and assembly equipment (PAE) have softened more aggressively than previously expected as supply comes in line with expectations. For back-end process providers' capital expenditure (capex) purchases, 3D packaging and copper wire bonding for lower-cost solutions will still be the focus, but at a reduced pace. Gartner said that most major tool segments will see slightly negative sales in 2011, but advanced tooling will again be stronger than the general market this year. For 2012, traditional tooling segments will see substantial declines in sales, while advanced packaging segments are expected to fall less than is traditional when compared with 2011. The pause in copper bonding solutions is expected to continue through next year, before an aggressive ramp-up in 2013.

For 2011, the automated test equipment (ATE) market is expected to decline modestly over 2010. Gartner's 2011 expectations are driven by the moderated demand of system-on-chip and the advanced radio frequency segments of the market. Memory ATE will likely pull back in 2011 as DRAM capex has continued to soften. However, NAND testing platforms are expected to be stronger than the general memory test market this year. For 2012, analysts expect a significant decline in tester sales, though memory systems should hold up reasonably well compared with most cycles as DRAM capex returns. Beyond 2012, Gartner predicts solid growth in 2013.

CIOs Must Assess the Impacts of the Euro Crisis on Their Organisations Now

Mon, 12 Dec 2011 00:00:00 +0100

With extreme uncertainty plaguing all enterprises operating in the eurozone, CIOs must act immediately to protect their enterprises, according to Gartner, Inc. CIOs need to safeguard their organisations from the risks of government/bank default, euro break-up, counterparty bankruptcy and employee/customer distress.

"Uniquely positioned within their organisations, CIOs are at the fulcrum of business and technology, and they are the only executives with sufficient visibility and potential capability to address the challenges posed by today's eurozone crisis," said David Furlonger, vice president and Gartner Fellow. "Business leaders are crying out for CIOs to demonstrate more effectively the capability of IT and, specifically, to add value to the business. Therefore, this crisis also presents CIOs with an opportunity to make substantial and bold steps to meet CEO demands, and demonstrate the importance and true value of IT."

"Unlike recent economic difficulties, today's crisis has the potential to totally undermine the eurozone, the whole EU and beyond," said Andrea Di Maio, vice president and distinguished analyst at Gartner. "Spurred on by the pervasiveness of the internet, the crisis negatively affects every organisation or individual doing business in or with the region. The CIO's top responsibility is to guarantee business continuity."
Gartner analysts said there are four broad challenges that the euro crisis raises, and they examined how the CIO is best positioned to provide organisation leadership on addressing those challenges. These challenges include:

Challenge 1: Market Volatility
Most organisations and their IT departments are burdened with significant numbers of bureaucratic processes and latent decision-making mechanisms. Today's market conditions require business and government executives to radically restructure their business practices.
"Market conditions require CIOs to help develop a working environment that promotes speed, agility and adaptability — without sacrificing accountability," Mr Di Maio said. "Change management capabilities will be critical. The foundation to achieve effective change management will demand information, analytics, HR flexibility and a more decentralised command-and-control management structure."

Challenge 2: Capital Costs
The costs of and access to capital across Europe will likely continue to worsen until there is a significant redress in structural imbalances between countries and organisations. Unwillingness or inability to write off debt and restructure public- and private-sector balance sheets is a substantial barrier to market efficiency. Lines of credit will likely become uncertain or removed, forcing corporations to reduce inventory.

"In this situation, CIOs will face zero-growth budgeting at best, and substantial reductions in both the investment capital and the operational budget made available to run the business at worst," Mr Furlonger said. "If a market meltdown occurs, then critical resources and supplies may be at risk. CIOs and other executives must develop contingency plans to ensure multiple backups."

Challenge 3: Human Capital Management
Millions of people are out of work in Europe. Formal government austerity packages and informal corporate restrictions on salaries, benefits and working conditions, combined with high costs of living, are stressing workforces. This situation is compounded by retirement funding shortfalls, extensions in the working age and loss of benefits.

"CIOs and business executives face significant HR issues in terms of rewarding and motivating staff, securing funds to hire appropriate new talent, and dealing with the personnel hardships of individuals entering the work environment, which impair productivity," Mr Di Maio said. "They must also plan for retention issues of foreign workers moving to better opportunities or the removal of non-EU work permits and visas in response to political backlash from rapidly rising unemployment, resulting in a 'brain drain'."

Challenge 4: Risk Management
The capital markets (and many corporations) believe that the risk of government and counterparty default is substantial. Receivables management is being stressed, and the likelihood of internal and external fraud rises. From an IT standpoint, operational risk is heightened via issues such as changes in contractual obligations and business continuity. Added to this is the continued increase in regulatory compliance initiatives across industries, which exacerbate the pressure on audit and risk management assessments and workflows.

"Prior to the crisis, organisations were already challenged to identify enterprisewide risks in a holistic fashion to link those risks to the performance of the business and to manage risk in a time-effective manner," Mr Furlonger said. "Now, the CIO — and corporate treasurer, head trader, CFO and others — need to ask questions such as, 'Can existing risk models accommodate alternatives to the lack of historical data (in many cases, as much as three years of back data is required) necessary for regression testing/yield curve analysis of hedges, and for stressing asset and liability portfolios in the event of a redenomination in all or part of their asset and liability portfolio?"

Worldwide External Controller-Based Disk Storage Market Grew 10.4 Per Cent in Third Quarter of 2011

Thu, 08 Dec 2011 00:00:00 +0100

Worldwide external controller-based (ECB) disk storage revenue totalled \$5.1 billion in the third quarter of 2011, a 10.4 per cent increase from revenue of \$4.6 billion in the third quarter of 2010, according to Gartner, Inc. Although the worldwide ECB disk storage market showed positive revenue growth for the seventh quarter in a row, the market did show signs of slowing down.

"The third-quarter, year-over-year worldwide growth rate was the smallest percentage increase in the past seven quarters," said Roger Cox, research vice president at Gartner. "The North American region, which grew 6.7 per cent in the third quarter, appears to be finally laboring under the weight of an extremely sluggish economy. Moreover, the prolonged debate and uncertainty around the debt ceiling as the quarter came to an end also had a negative influence on third-quarter revenue."

Although the Asia/Pacific and Latin American regions produced the largest year-over-year revenue gains at 23 per cent and 15.3 per cent, respectively, the EMEA region continued to achieve results that defied its economic woes. These three regions in particular benefit from the conversion of direct attached storage (DAS) infrastructures to fabric attached storage (FAS) infrastructures associated with the transition to a virtualised server environment, as well as the ongoing movement from tape to disk in order to modernise inefficient backup/recovery methodologies.

Led by EMC, the branded sales of four vendors, including IBM, HP and Hitachi/Hitachi Data Systems, gained market share in the third quarter of 2011. EMC's strength remained its broad ECB market coverage. EMC was the leading vendor in the block-access and Special Purpose Disk Active Archiving System (PDAAS) segments. Propelled by the Isilon acquisition and the new VNX series, EMC garnered for the first time the top position in the network-attached storage (NAS) segment.

Bolstered by strong year-over-year growth results by IBM's flagship DS8000 series in conjunction with broad acceptance of its XIV Gen3 and Storwize V7000 modular storage systems, IBM overcame the decline in DS5000/DS3000 revenue sourced from NetApp to increase its share by a modest 0.1 per cent.

Driven by the performance of the P4000 G2 SAN Solution Platforms (formerly LeftHand Networks) and 3PAR Storage Systems, HP gained almost one percentage point in market share, offsetting the drop in EVA revenue. The high-end Virtual Storage Platform (VSP) remained the engine behind Hitachi/Hitachi Data Systems performance, enabling it to gain 0.6 percentage points of share in the third quarter of 2011.

NetApp's third-quarter results reflect an overdependence on a few large customers, limited geographic coverage in high-growth countries and increased competition from Dell, EMC, HP and IBM in the midrange modular ECB disk array market segment. In addition, Gartner analysts said NetApp's storage solutions that leverage the branded E-Series are yet to produce meaningful revenue.

Even though Dell is making notable strides with its Compellent acquisition, and the EqualLogic PS-Series results remain robust, the falloff in cobranded Dell/EMC CX-Series revenue, coupled with its deteriorating position in the NAS segment, inhibited Dell's overall ECB revenue growth.

The third quarter of 2011 was the first quarter where the disengagement from Hitachi Data Systems was not impacting Oracle's ECB disk storage results. Nevertheless, and even with credit for the Pillar Axiom acquisition, Oracle lost 0.3 per cent share.

In the ECB disk storage market segment, the block-access segment represented 77.9 per cent of the total market and increased 9 per cent year-on-year in third quarter of 2011. The file-access segment represented 21.3 per cent of the total market and was up 15.5 per cent year-on-year. The SPDASS segment represented 0.7 per cent of the total market was up 22.1 per cent year-on-year. Vendor pricing and discounting were consistent with historic trends, with the price per terabyte declining 16.6 per cent. The hard-disk drive (HDD) shortfall caused by the floods in Thailand did not have an impact on HDD supply or third-quarter 2011 ECB disk storage system revenue results.

Gartner ECB disk storage reports reflect vendor-branded hardware-only revenue, as well as hardware revenue associated with financial leases and managed services. Optional and separately priced storage software revenue and storage area network infrastructure components are excluded.

Six Ways for Providers to Go to Market in the Data Centre

Mon, 05 Dec 2011 00:00:00 +0100

IT managers are beginning to view the data centre more holistically and are taking a more strategic approach to technology procurement and deployment, and technology and service providers that sell into the data centre will want to broaden their marketing approach, according to Gartner, Inc.

"If you are selling into the data centre, you are no longer just competing head-to-head with familiar competitors selling like products," said April Adams, research director at Gartner. "Today, you have increased competition not only in your specific area of technological expertise, but for overall enterprise mind share, as well. Providers will need to expand their view of the competitive landscape and consider alternative ways to go to market in order to highlight their strengths and maximise their sales potential."

Gartner has identified six ways that technology and service providers can go to market in the data centre.

Option 1: Compete as a Specialist
If a provider is competing as a specialist, it specialises in one technology area, and it doesn't try to be all things to all people. It doesn't go to market with converged systems or as a one-stop shot. Specialists want to be perceived as best-in-class in their technology area and covet a reputation as the provider with the most innovative or advanced technology. The primary advantage of this go-to-market option for strategic marketing, product marketing, product management, marketing communications and brand managers is that the approach is familiar. The primary downside is the changing market environment that introduces new competition. True specialists may well be better off trying to lead within their technology area than expanding into adjacent markets.

Option 2: Go to Market as a Traditional Portfolio Provider
Portfolio providers are large providers that sell all or some of the various components that make up the data centre infrastructure. In the traditional portfolio provider model, these technologies are developed in-house. The primary advantage of this go-to-market strategy lies in the provider's size. Most traditional portfolio providers are large organisations, which means that they have the resources on hand to focus effectively on more than one technology area and produce successful, if not always groundbreaking, products in the areas deemed important to the customer's marketing strategy. Traditional portfolio providers should carefully monitor the market, and if there is any chance that they might move toward a converged offering, they should begin to explore how an integrated product might be deployed.

Option 3: Partner to Achieve a Portfolio Offering
Partnering is an alternative way to get all the necessary data centre infrastructure components into the provider's portfolio if it doesn't have offerings in every category in-house. This approach also enables providers to focus their resources on the things they do best and rely on partners for the rest. However, partnerships can be fickle, and sometimes they falter. Those taking the portfolio-by-partnership route should not underestimate the resources required to effectively manage and nurture these partnership relationships.

Option 4: Develop a Converged Offering
Some portfolio providers have taken a step beyond certification, integration and test, and developed converged systems or integrated offerings for the data centre. If the trend of approaching change in the data centre with a definitive strategic plan that includes an integrated project road map continues into 2012, then going to market in this way could position providers as market leaders rather than market followers. Undertaking this strategy is a bold move. This approach represents a commitment to a new kind of data centre and a new relationship between providers and customers. It requires significant investment and has the potential to take a long time to achieve a good return on investment (ROI).

Option 5: Hedge Your Bets by Using Multiple Approaches
Portfolio providers with a data centre transformation (DCT) offering have the opportunity to sell both in the traditional, silo-based way and as a converged system or integrated stack. This strategy has all the benefits of both strategies and, with the exception of not being part of the holistic data centre conversation, all of the disadvantages as well. Going to market both ways allows providers to cover all the bases no matter what buyers opt to do, both individually in the short term and collectively for the longer range.

Option 6: Sell Your Data Center Technologies as a Service
The final go-to-market strategy alternative for the data centre is to deliver the technology as a service — cloud or otherwise. There are several ways to achieve this:

The customer owns the infrastructure, but the provider operates it (on-premises/off-premises).
The provider owns the infrastructure, but the customer operates it (on-premises/off-premises).
The provider owns and operates the infrastructure (on-premises/off-premises).
Depending on the requirements of the customer, the service can be shared between entities or restricted.

Advantages to pursuing this go-to-market option, at least for technology (as opposed to service) providers, include the fact that there are several ways to go about it, some requiring less infrastructure investment than others. This alternative also allows providers to stick to their area of expertise while still tapping into the key wants and needs of data centre customers. One critical decision faced by those who select this option is whether to transition existing customers to these models (and if so, how) or to pursue a dual strategy in which they sell both in the traditional way and as a service simultaneously.

"These options are not intended to be sequential. Providers can and do dip their toes in the waters of a new option, while maintaining most of their business in their mainstay position," Ms Adams said. "Considering these trends as part of your forward-thinking, go-to-market planning and making thoughtful decisions based on your company's unique set of strengths and weaknesses will position you well in the changing market and could give you a marked competitive advantage relative to providers that do not."
Additional information is available in the Gartner report "Marketing Essentials: Six Ways to Go to Market in the Data Center." The report is available on Gartner's website at http://www.gartner.com/resId=1845821.

IT Budgets Are Moving Out of the Control of IT Departments

Thu, 01 Dec 2011 00:00:00 +0100

Gartner, Inc. has revealed its top predictions for IT organisations and users for 2012 and beyond. Analysts said that the predictions herald changes in control for IT organisations as budgets, technologies and costs become more fluid and distributed.
This year's selection process included evaluating several criteria that define a top prediction. The issues examined included relevance, impact and audience appeal. A list of this year's predicts reports is available on the Gartner Predicts website at www.gartner.com/predicts.

Gartner's top predictions for 2012 and beyond showcase the trends and events that will change the nature of business today and in years to come. Selected from across Gartner's research areas as the most compelling and critical predictions, the trends and topics they address underline the reduction of control that IT has over the forces that affect it.

"The continued trends toward consumerisation and cloud computing highlight the movement of certain former IT responsibilities into the hands of others," said Daryl Plummer, managing vice president and Gartner fellow. "As users take more control of the devices they will use, business managers are taking more control of the budgets IT organisations have watched shift over the last few years. As the world of IT moves forward, CIOs are finding that they must coordinate their activities in a much wider scope than they once controlled. While this might be a difficult prospect for IT departments, they must now adapt or be swept aside."

Gartner analysts said that going into 2012 there is an increase in the amount of information available to organisations, but it's a challenge for them to understand it. Given the shifts in control of systems that IT organisations are facing, the loss of ability to guarantee consistency and effectiveness of data will leave many struggling to prevent their organisations from missing key opportunities or from using questionable information for strategic decisions. No regulatory help is on the near horizon, leaving each business to decide for itself how to handle the introduction of big data.

"Any organisation that wishes to accelerate in 2012 must establish in itself a significant discipline of coordinating distributed activities," Mr Plummer said. "They must establish relationship management as a key skill and train their people accordingly. The reason for this is that the lack of control can only be combated through coordinative activities. The IT organisation of the future must coordinate those who have the money, those who deliver the services, those who secure the data, and those consumers who demand to set their own pace for use of IT."

Gartner's top predictions for 2012 include:

By 2015, low-cost cloud services will cannibalise up to 15 per cent of top outsourcing players' revenue.
Industrialised low-cost IT services (ILCS) is an emerging market force that will alter the common perceptions of pricing and value of IT services. In the next three to five years, this new model will reset the value proposition of IT. Low-cost cloud services will cause the cannibalisation of current and potential outsourcing revenue. Similar to what happened with the adoption of offshore delivery, it will be incumbent upon vendors to invest in and adopt a new cloud-based, industrialised services strategy either directly or indirectly, internally or externally. The projected \$1 trillion IT services market is at the beginning of a phase of further disruption, similar to the one the low-cost airlines have brought in the transportation industry.

In 2013, the investment bubble will burst for consumer social networks, and for enterprise social software companies in 2014.
Vendors in the consumer social network space are competing with each other at a rate and pace that are unusually aggressive, even in the technology market. The net result is a large crop of vendors with overlapping features competing for a finite audience. In the enterprise market, many small independent social networking vendors are struggling to reach critical mass at a time when market consolidation is starting, and megavendors, such as Microsoft, IBM, Oracle, Google and VMware, have made substantial efforts to penetrate the enterprise social networking market. While substantial excitement will be raised by private firms going public, valuations of smaller independent vendors will diminish as recognition sets in that the opportunities for market differentiation and fast growth has eroded.

By 2016, at least 50 per cent of enterprise email users will rely primarily on a browser, tablet or mobile client instead of a desktop client.
While the rise in popularity of mobile devices and the growing comfort with browser use for enterprise applications preordains a richer mix of email clients and access mechanisms, the pace of change over the next four years will be breathtaking. Email system vendors are also likely to build mobile clients for a diverse set of devices for the same reason. Market opportunities for mobile device management platform vendors will soar. Increased pressure will be on those suppliers to accommodate an increasing portfolio of collaboration services, including instant messaging, Web conferencing, social networking and shared workspaces.

By 2015, mobile application development projects targeting smartphones and tablets will outnumber native PC projects by a ratio of 4-to-1.
Smartphones and tablets represent more than 90 per cent of the new net growth in device adoption for the coming four years, and increasing application platform capability across all classes of mobile phones is spurring a new frontier of innovation, particularly where mobile capabilities can be integrated with location, presence and social information to enhance the usefulness. Innovation is moving to the edge for mobile devices; whereas, in 2011, Gartner estimates that app development projects targeting PCs to be on par with mobile development. Future adoption will triple from 4Q10 to 1Q14, and will result in the vast majority of client-side applications being mobile only or mobile first for these devices.

By 2016, 40 per cent of businesses will make proof of independent security testing a precondition for using any type of cloud service.
While businesses are evaluating the potential cloud benefits in terms of management simplicity, economies of scale and workforce optimisation, it is equally critical that they carefully evaluate cloud services for their ability to resist security threats and attacks. Inspectors' certifications will eventually become a viable alternative or complement to third-party testing. This means that instead of requesting that a third-party security vendor conduct testing on the enterprise's behalf, the enterprise will be satisfied by a cloud provider's certificate stating that a reputable third-party security vendor has already tested its applications.

At year-end 2016, more than 50 per cent of Global 1000 companies will have stored customer-sensitive data in the public cloud.
With the current global economy facing financial pressure, organisations are compelled to reduce operational costs and streamline their efficiency. Responding to this imperative, it is estimated that more than 20 per cent of organisations have already begun to selectively store their customer-sensitive data in a hybrid architecture that is a combined deployment of their on-premises solution with a private and/or public cloud provider in 2011.

By 2015, 35 per cent of corporate IT expenditures for most organisations will be managed outside the IT department's budget.
Next generation digital enterprises are being driven by a new wave of business managers and individual employees who no longer need technology to be contextualized for them by an IT department. These people are demanding control over the IT expenditure required to evolve the organisation within the confines of their roles and responsibilities. CIOs will see some of their current budget simply reallocated to other areas of the business. In other cases, IT projects will be redefined as business projects with line-of-business managers in control.

By 2014, 20 per cent of Asia-sourced finished goods and assemblies consumed in the US will shift to the Americas.
Political, environmental, economic and supply chain risks are causing many companies serving the US market to shift sources of supply from Asia to the Americas, including Latin America, Canada and the US Except in cases where there is a unique manufacturing process or product intellectual property, most products are candidates to be relocated. Escalating oil prices globally and rising wages in many offshore markets, plus the hidden costs associated with offshore outsourcing, erode the cost savings that didn't account for critical supply chain factors, such as inventory carrying costs, lead times, demand variability and product quality.

Through 2016, the financial impact of cybercrime will grow 10 per cent per year, due to the continuing discovery of new vulnerabilities.
As IT delivery methods meet the demand for the use of cloud services and employee-owned devices, new software vulnerabilities will be introduced, and innovative attack paths will be developed by financially motivated attackers. The combination of new vulnerabilities and more targeted attacks will lead to continued growth in bottom-line financial impact because of successful cyber attacks.

By 2015, the prices for 80 per cent of cloud services will include a global energy surcharge.
While cloud operators can make strategic decisions about locations, tax subsidies are no long-term answer to managing costs, and investments in renewable-energy sources remain costly. Some cloud data centre operators already include an energy surcharge in their pricing package, and Gartner analysts believe this trend will rapidly escalate to include the majority of operators — driven by competitive pressures and a "me too" approach. Business and IT leaders and procurement specialists must expect to see energy costs isolated and included as a variable element in future cloud service contracts.

Through 2015, more than 85 per cent of Fortune 500 organisations will fail to effectively exploit big data for competitive advantage.
Current trends in smart devices and growing Internet connectivity are creating significant increases in the volume of data available, but the complexity, variety and velocity with which it is delivered combine to amplify the problem substantially beyond the simple issues of volume implied by the popular term "big data." Collecting and analysing the data is not enough — it must be presented in a timely fashion so that decisions are made as a direct consequence that have a material impact on the productivity, profitability or efficiency of the organization. Most organisations are ill prepared to address both the technical and management challenges posed by big data; as a direct result, few will be able to effectively exploit this trend for competitive advantage.

Additional details are in the Gartner report, "Gartner's Top Predictions for IT Organizations and Users, 2012 and Beyond: Control Slips Away," which is available on Gartner's website at www.gartner.com/predicts. The Gartner Predicts Special Report includes links to more than 70 predicts reports broken out by topics, industries and markets.

Worldwide Server Shipments Grew 7 Per Cent; Revenue Increased 5 Per Cent in the Third Quarter of 2011

Tue, 29 Nov 2011 00:00:00 +0100

Worldwide server shipments in the third quarter of 2011 grew 7.2 per cent year-on-year, while revenue increased 5.2 per cent year-on-year, according to Gartner, Inc.

“The third quarter of 2011 produced growth on a global level but there was some significant variation in growth by region,” said Jeffrey Hewitt, research vice president at Gartner. “All regions showed growth in both shipments and vendor revenue except for Western Europe which posted a 4.9 per cent decline in revenue for the period. Asia/Pacific grew the most significantly in shipments with a 23.9 per cent increase. Eastern Europe posted the highest vendor revenue growth at 27.4 per cent for the period.”

“x86 servers forged ahead and grew 7.6 per cent in units and 9.3 per cent in revenue. Some regions like Western Europe and the United States did not produce as much relative x86-based server growth because of comparatively stronger third quarter results in 2010. RISC/Itanium Worldwide Unix server shipments declined 6.8 per cent, but vendor revenue increased 3.5 per cent compared to the same quarter last year. The ‘other’ CPU category, which is primarily mainframes, showed a decline of 6.9 per cent,” Mr Hewitt said.

All of the top five global vendors had revenue increases for the third quarter of 2011 except HP and Oracle. HP declined 3.6 per cent year-on-year and Oracle achieved flat growth. IBM took the lead in the worldwide server market based on revenue — the company posted just over \$3.8 billion in server vendor revenue for a total share of 29.7 per cent for the third quarter of 2011. This share was down 0.5 per cent year-on-year. Most of IBM’s revenue growth came from its Power Systems line with some contribution by System X as well.

In server shipments, HP remained the worldwide leader in the third quarter of 2011 in spite of a year-on-year shipment decline of 3.1 per cent for the quarter. This decline was driven primarily by drops in HP’s ProLiant brand. HP’s worldwide server shipment share was 29.2 per cent representing a 3.1 per cent drop in share from the same quarter in 2010.

In terms of server form factors, blade servers rose 3.3 per cent in shipments and 7.6 per cent in revenue for the quarter. The rack-optimised form factor climbed 8.2 per cent in shipments and 6.3 per cent in revenue for the third quarter of 2011.

In Europe, the Middle East and Africa (EMEA), server shipments exceeded 606,300 units in the third quarter of 2011, an increase of 4.3 per cent from the same period last year. Server revenue totalled \$3.25 billion, a decline of 0.5 per cent from last year.

"The market's recovery faltered this quarter as challenging economic conditions in Western Europe dragged down spending levels for the overall EMEA region," said Adrian O'Connell, research director at Gartner. "The third quarter of 2011 marked three years since the start of the downturn, and despite a relative recovery during the last few quarters, both volume and revenue remained lower than in the third quarter of 2008. Growth in Eastern Europe and Middle East and Africa has not been enough to offset some real challenges in Western Europe, which recorded a decline of 4.9 per cent in the third quarter of 2011.”

The quarter saw mixed results in the key segments: x86 system revenue grew 6.5 per cent, the ‘other’ CPU category declined 26.0 per cent, and RISC/Itanium Unix systems declined 8.2 per cent.

"The x86-based segment managed to exhibit growth, but after a strong replacement cycle both the 'other CPU' and RISC/Itanium UNIX segments continued to decline. Vendors reliant on these segments will face increasing challenges as the combination of a weak economic environment and platform migrations will continue to exert pressure," said Mr O'Connell.

In the RISC/Itanium Unix segment, IBM consolidated its lead with an 11 per cent increase in revenue year-on-year, while Oracle grew 1.9 per cent and HP declined 28.7 per cent. “EMEA has been one of the regions with a relatively strong RISC/Itanium Unix base, however the performance of this segment is increasingly challenged by migration activity to other platforms. We forecast single-digit growth for both revenue and shipments next quarter,” said Mr O'Connell.

In the third quarter of 2011 only two of the top five vendors, Dell and Oracle, achieved revenue growth, compared with the equivalent quarter of 2010. HP held the No. 1 position, but its revenue declined 5.4 per cent year-on-year. IBM, ranked No. 2, declined 10.1 per cent year-on-year, the weakest performance of the top five vendors. Considering Dell's exposure to the public sector, it performed well. Oracle's growth demonstrated the success it is having with its new server platforms.

In server shipments, HP maintained the No. 1 position. However, Dell's strong performance closed the gap with HP, and Dell was the only top five vendor to increase its market share year-on-year.

Semiconductor Inventory Correction Dampening Sales in Second Half of 2011

Thu, 17 Nov 2011 00:00:00 +0100

As many semiconductor vendors announced relatively weak sales for the third quarter of 2011, and pre-announced poor guidance for the fourth quarter, the anticipated inventory correction is well under way, according to Gartner, Inc. Gartner analysts expect that this process will continue to dampen sales prospects for at least the remainder of the year before sequential growth can return in 2012.

The days of inventory (DOI) level in the semiconductor supply chain was elevated going into the third quarter of 2011, but corrective action will help bring it under back control at the cost of reduced sales for semiconductor vendors, according to Gartner. DOI is an efficiency ratio that measures the average number of days the company holds its inventory before selling it.

"We expect that average selling prices (ASPs) for foundry-produced components will be under pressure through the first half of 2012 because of aggressive investment in capacity made as the industry came out of the last recession," said Peter Middleton, principal research analyst at Gartner. "That investment is leading to excess capacity at the same time as concern is rising about end-market demand levels due to weak economic prospects."

Gartner’s Index of Inventory Semiconductor Supply-chain Tracking (GIISST) moved further into the caution zone as levels hit 1.16 in 3Q11, up from 1.12 in Gartner's initial 3Q11 update in September.

Within the GIISST, an above DOI level of 1.10 indicates inventories are inflated, and there will likely be downward pressure on ASPs. Below the 0.95 level indicates that inventories are low, components may be on allocation, and double ordering begins.

The GIISST is a single number that measures the health of the semiconductor industry. It assesses "normal" inventory levels throughout the supply chain and compares them with current levels to evaluate industry trends. It gauges the normal inventory level at each stage of production that will allow for a smooth flow of products and management of the production process without inventory shortages or surpluses.

"The proportion of total semiconductor inventory held by OEMs has begun to rise; however, it is still near historic lows, which will help reduce the impact of an order correction on semiconductor vendor sales," said Gerald van Hoy, senior research analyst at Gartner.

New Methodology: Lead-Time Tracking
Gartner has developed a new methodology to add further insight to its inventory analysis. It is based on observing the trends in lead time for high-volume semiconductor components as reported by distributors. The initial application for this methodology is for components used in mobile phones and media tablets. Using information gathered from mobile phone teardown analyses, a list of representative parts was compiled and was used as a reference to compile a weekly tracking system for lead times for these parts.

"Our Distributor Lead-Time Analysis showed that semiconductor lead times dropped significantly from June to September 2011. This showed a weakening in immediate demand," Mr Van Hoy said.

Additional information is available in the Gartner report "Semiconductor Inventory Correction Dampens Sales in Second Half of 2011." The report is available on Gartner's website at http://www.gartner.com/resId=1838715.

Sales of Mobile Devices Grew 5.6 Per Cent in Third Quarter of 2011; Smartphone Sales Increased 42 Per Cent

Tue, 15 Nov 2011 00:00:00 +0100

Worldwide sales of mobile devices totalled 440.5 million units in the third quarter of 2011, up 5.6 per cent from the same period last year, according to Gartner, Inc. Non-smartphone devices performed well, driven by demand in emerging markets for low-cost devices from white-box manufacturers, and for dual-subscriber identity module (SIM) devices.

Sales into the channel reached 460 million units. Gartner analysts said this increase was because of inventory build-up in the channel partly because of the shipping of new devices late in the quarter but mostly to prepare the channel for the holiday season. Gartner expects most of the build-up to be sold by the first quarter of 2012.

"Our forecast for the end of the year remains broadly in line at a worldwide level as regions such as Asia/Pacific and the Middle East and Africa make up for weaker performance in the Western European market," said Annette Zimmermann, principal analyst at Gartner based in Munich.

Smartphone sales to end users reached 115 million units in the third quarter of 2011, up 42 per cent from the third quarter of 2010. Sequentially, smartphone sales slowed to 7 per cent growth from the second quarter of 2011 to the third quarter of 2011. Smartphone sales accounted for 26 per cent of all mobile phone sales, growing only marginally from 25 per cent in the previous quarter.

"Strong smartphone growth in China and Russia helped increase overall volumes in the quarter, but demand for smartphones stalled in advanced markets such as Western Europe and the US as many users waited for new flagship devices featuring new versions of the key operating systems," said Roberta Cozza, principal research analyst at Gartner. "Slowdowns also occurred in Latin America and the Middle East and Africa."

"Some consumers held off upgrading in the third quarter because they were waiting for promotions on other new high-end models that were launched in the run-up to the fourth quarter holiday season," Ms. Cozza said. "Other consumers were waiting for a rumoured new iPhone and associated price cuts on older iPhone models; this affected US sales particularly."

Despite a drop in market share, Nokia continued to be the worldwide leader in mobile device sales as it accounted for 23.9 per cent of global sales. The second quarter of 2011 was the low point for Nokia, and the third quarter brought signs of improvement. Dual-SIM phones in particular, and feature phones generally, maintained Nokia's momentum in emerging markets. Heavy marketing from both Nokia and Microsoft to push the new Lumia devices should bring more improvement in the fourth quarter of 2011. However, a true turnaround won't take place until the second half of 2012.

Samsung became the No. 1 smartphone manufacturer worldwide as sales to end users tripled year over year to reach 24 million; sell-in was high as the channel built inventory. Samsung was the No. 1 smartphone manufacturer for the first time, ahead of Nokia in Western Europe and Asia. Gartner attributes this to the strong performance of Samsung's Galaxy smartphones, which now cover a broad range of prices, and a weaker competitive market. Analysts expect more competition in the fourth quarter of 2011, not least because sales of the iPhone 4S, 4 and 3GS will capture share from Android manufacturers.

Apple shipped 17 million iPhones, an annual increase of 21 per cent, but down nearly 3 million units from the second quarter of 2011 because of Apple's new device announcement in October. Gartner believes Apple will bounce back in the fourth quarter because of its strongest ever pre-orders for the iPhone 4S in the first weekend after its announcement. Markets such as Brazil, Mexico, Russia and China are becoming more important to Apple, representing 16 per cent of overall sales and showing that the iPhone has a place in emerging markets, especially now that the 3GS and 4 have received price cuts.

The Android OS accounted for 52.5 per cent of smartphone sales to end users in the third quarter of 2011, more than doubling its market share from the third quarter of 2010.

"Android benefited from more mass-market offerings, a weaker competitive environment and the lack of exciting new products on alternative operating systems such as Windows Phone 7 and RIM," Ms Cozza said. "Apple's iOS market share suffered from delayed purchases as consumers waited for the new iPhone. Continued pressure is impacting RIM's performance, and its smartphone share reached its lowest point so far in the US market, where it dropped to 10 per cent."

Western Europe PC Market Declined 11 Per Cent in Third Quarter of 2011

Mon, 14 Nov 2011 00:00:00 +0100

PC shipments in Western Europe totalled 14.8 million units in the third quarter of 2011, a 11.4 per cent decline from the same period last year, according to Gartner, Inc.

“The inventory build-up that slowed growth in the last four quarters was mostly cleared during the third quarter of 2011; however, the PC industry continued to perform below normal seasonality,” said Meike Escherich, principal analyst at Gartner. “The results in the third quarter of 2011 make unpleasant reading for the PC industry, as the third quarter is traditionally a strong consumer quarter, driven by back-to-school sales.”

The mobile-PC market was particularly hard hit with a 12.6 per cent decline, driven by more than a 40 per cent decrease in mini notebook shipments in the third quarter of 2011. Desktops declined 8.7 per cent.

The market segment showing the greatest decline was in the consumer segment, which decreased 18.8 per cent year-on-year. The much hoped-for uptake of professional PCs in the wake of the migration to Windows7 remained subdued by the pessimistic economic outlook. PC shipments in the professional segment declined 2.1 per cent year-on-year.

HP retained its No. 1 position, managing the uncertainties around a possible spin–off of its PC division better than expected. Asus's shipments increased sharply, with growth in notebooks across the consumer and small or midsize business (SMB) markets. As a result, ASUS moved above Dell to the No. 3 position, and Dell fell to No. 4. Acer's continuing inventory problems opened up the channel for ASUS and other vendors to push their own shipments. Apple reached fifth place with 28 per cent growth in mobile PCs. Apple experienced double-digit growth in both the consumer and professional space.

“The share of mini-notebooks continues to decline, which contributed to the weak year-on-year comparison. Moreover, the consumer PC markets in Western Europe remained essentially weak, with consumer confidence permanently shaken by the economic issues spreading across most of the region,” said Ms Escherich.

Gartner Reveals the Next Chapter in Modern Business Management: The Social Organisation

Thu, 10 Nov 2011 00:00:00 +0100

Being a social organisation goes far beyond experimenting with social media technology tools such as Facebook and Twitter, according to Gartner, Inc. A social organisation addresses significant business challenges and opportunities using social media platforms to enable mass collaboration — what Gartner predicts will be the next evolutionary pillar defining how work gets done around the world.

Analysts at Gartner Symposium/ITxpo 2011, being held through today, will explain how mass collaboration extends beyond social media to enable employees, customers, suppliers and all other stakeholders to participate directly in the creation of value. However, few executives and managers know how to turn opportunities for greater collaboration into meaningful business results.

In the recently published book, "The Social Organization: How to Use Social Media to Tap the Collective Genius of Your Customers and Employees" (by Harvard Business Press, October 2011), co-authors Anthony J. Bradley, group vice president at Gartner, and Mark P. McDonald, group vice president and head of research at Gartner Executive Programs, reveal how executives from CEOs to managers can make mass collaboration a source of enduring competitive advantage in their business.

"Deployed effectively, social media unleashes the collaborative power of employees at all levels and locations in your organisation, customers and prospects, and partners anywhere in your company's value chain — while minimising the constraints imposed by the specialisation and compartmentalisation that inevitably creep into businesses as they grow," Mr Bradley said.

"Organisations can achieve unprecedented business results by using social media to effectively tap into the power of mass collaboration," said Mr McDonald. "New mass collaboration capabilities are irreversibly redefining what it means to be a highly productive organisation."

In the book, Mr Bradley and Mr McDonald share insights from their study of more than 400 organisations around the world — including Xilinx, NASA and CEMEX — that have used social technologies towards these ends. Mr Bradley and Mr McDonald identify a set of core disciplines that managers need to master to translate mass collaboration into results:

Vision: defining a compelling vision of progress toward a highly collaborative organisation
Strategy: taking community collaboration from risky and random success to measurable business value
Purpose: rallying people around a clear purpose, not just providing them with technology
Launch: creating a collaborative environment and convincing customers and employees to embrace it
Guide: participating in and influencing communities as they pursue their purpose, without stifling collaboration
Adapt: responding creatively to change by modifying the organisational context to better support community collaboration

"The Social Organization" highlights the benefits and challenges of using social technology to tap the power of collective effort. Packed with practical advice and compelling examples, this new book reveals how leaders can make collaboration a management imperative to help guide and nurture employee communities and in turn, create social organisations.

Additional comments from Mr Bradley and Mr McDonald from Gartner Symposium/ITxpo 2011 are available on the Gartner YouTube channel at http://www.youtube.com/watch?v=5hrc70vc8ow

Seven Things CIOs Must Know About the Board of Directors

Thu, 03 Nov 2011 00:00:00 +0100

As CIOs increase their interactions with the board of directors, it is vital that they improve their knowledge of this unique and independent audience, according to Gartner, Inc. Only 16 per cent of board directors have any IT background or experience, so CIOs need to treat the board as one of their most valued customers if they are to improve their overall ability to work with the board of directors.

"The board of directors is an entity that has little IT experience or time to dedicate to the business of the corporation, and whose attentions can be divided among other companies. Nevertheless, it is the highest authority in the management of the organisation," said Jorge Lopez, vice president and distinguished analyst at Gartner. "To better prepare CIOs for the time when they will have to present to the board of directors, or to improve what they are doing with the board now, they'll need to know some vital information about the board of directors in order to build an effective bridge to it."

Gartner has identified seven areas that CIOs must understand and act upon in order to effectively work with the board:

The Board Has Little IT Experience: The reality is that board members are brought in for their expertise and experience in business or their control of a major portion of total stock equity, not for IT knowledge.
CIO Action: Get to know the backgrounds of the board members, as well as the priorities of the entire board, so that in your communications, you can better connect your planned IT initiatives with the priorities of the board.

The Board Meets a Few Times a Year: The board meets once a quarter and perhaps holds a committee meeting once a quarter as well. Some boards may meet more frequently.
CIO Action: Focus on preparation during the time between board meetings. Assume you have little time to make your points if you have to review your progress on a board-supervised project. Concentrate on the point that the board directors need to know and provide reference materials. Make sure it is all in a business- and board-oriented context.

The Board's Business Is Focused on a Few Priorities: More than 90 per cent of the board's time is consumed by the areas of risk, strategy, audit, finance, investment, social issues and compensation. Even when your initiative carries a high priority, other issues can arise.
CIO Action: Do not expect too much time or attention to be paid to an initiative unless it is highly strategic or catastrophic. Prepare to be flexible in the time you are allotted, even preparing a two-minute summary of the situation that states the purpose, conclusion and actions you want the board to undertake.

Board Director Activism Has Grown After Corporate Scandals: Triggered in 2001 by the accounting scandal of Enron and reinforced since then by law, corporate governance codes such as Sarbanes-Oxley have been enacted worldwide. This has led to the rise in impact of the outside director, an independent person to review the management of the company. It has also raised the visibility of corporate risk to a degree not possible before 2001.
CIO Action: Be prepared with business case justifications for a proactive interest from the board in the details of IT projects that are either large fractions of the total budget or strategically important to company growth or survival.

The CEO Serves at the Pleasure of the Board of Directors: For stock companies, the board of directors is the highest authority in the management of the corporation. In some corporations, the CEO holds the titles of CEO and chairman, although this is declining as corporate governance seeks greater accountability and risk management by separating the roles.
CIO Action: Of course, although the board is higher than the CEO in authority, for the CIO, the CEO is still the boss. Make sure you work with the CEO on any initiatives with the board, and do not surprise your CEO in front of the board.

There May Be Many Boards in the Same Company: Some organisations have an executive board and a nonexecutive board. In addition, some companies have multiple boards of directors for subsidiaries, joint ventures and not-for-profit organisations.
CIO Action: If you are involved in matters that require the approval of a full board of directors at a corporate level, and you have a board for your specific unit, be prepared to secure approval of any initiative through both bodies. The CEO will usually navigate the path to approvals, but know the landscape as well as you can through your own study.

Like All Human Organisations, Boards Have Their Share of Politics: As companies continue to navigate through uncertain economic times, the internal politics of the board surface as alliances form and shift. It is important to know who holds the power on the board. Is it concentrated in one shareholder? Is it shared among a group that votes as a coalition? Does the CEO hold more power than the board?
CIO Action: For CIOs who aspire to sit on a board of directors or to lead an executive team, knowing the power centres and how to influence them is a key skill. Those who are less ambitious may find it convenient to outsource all issues regarding politics to their CEO.

"The bottom line is that CIOs must learn to treat their board of directors as they would treat their customers," said Mr Lopez. "They need to get to know the members and their priorities, and make certain that they have the plans in place to meet board-level expectations."

Additional information is available in the Gartner report "CIO Advisory: Seven Things the CIO Must Know About the Board of Directors" at http://www.gartner.com/resId=1771516

Cloud Banking Can Drive “Creative Destruction” in the Banking Industry

Mon, 31 Oct 2011 00:00:00 +0100

A rapid shift in attitude towards cloud banking is happening within the financial services (FS) industry, according to Gartner, Inc. A Gartner survey* found that cloud is the top priority for global FS CIOs and that 39 per cent of those surveyed expect that more than half of all their transactions will be supported via cloud infrastructure and software as a service (SaaS) by 2015.

In Europe, the Middle East and Africa (EMEA), 44 per cent of FS CIOs expect that more than half of all their institutions' transactions will be supported via cloud infrastructure by 2015 and 33 per cent of them expect that the majority of transactions will be processed via SaaS by 2015.

“Early cloud adoption, especially in the FS sectors, may have been limited to non-core areas and proofs of concept, but it is set to go mainstream, moving the heart of the business, transaction origination and processing, into the cloud,” said Peter Redshaw, managing vice president at Gartner. “Cloud banking should be innovative, dedicated to this industry and transformative.”

Analysts at Gartner Symposium/ITxpo 2011, being held in Barcelona on 7-10 November, will discuss the future for cloud banking.

“Cloud banking has the ability to drive ‘creative destruction,’” added Mr Redshaw. “As well as helping to improve or optimise an existing service or process, cloud banking can provide the wealth – or the freedom - to try completely new services and processes, such as reverse auctions and third-party core banking systems, maybe even running them in parallel. Successful new cloud services can displace the existing and dominant process for design, distribution or transacting in a disruptive way, rather than just incrementally improving them.”

Among the most attractive benefits of cloud banking is being able to deploy (in an economically feasible way) the “champion-challenger” model. This adds a competitive dynamic to the way processes are improved and chosen. As banks progressively replace people in the value chain with algorithmic operations (AOs) to run processes and make decisions, their intellectual property increasingly resides in these algorithms. The value of people is not in running operations but in improving the AOs.

Although the technology is still immature in many places, cloud is a top priority for banks that need to continue a long-term focus on efficiency and support the CEO's growth strategy by becoming more flexible and agile to support new business models, new markets, new channels, and new products.

Peter Redshaw will provide further insight on the future of cloud banking at Gartner Symposium/ITxpo 2011, in Barcelona on 7-10 November. Additional information for the event is available at www.gartner.com/eu/symposium.

Companies Will Generate 50 Per Cent of Web Sales Via Their Social Presence and Mobile Applications by 2015

Thu, 20 Oct 2011 00:00:00 +0200

By 2015, companies will generate 50 per cent of web sales via their social presence and mobile applications, according to Gartner, Inc. Vendors in the e-commerce market will begin to offer new context-aware, mobile-based application capabilities that can be accessed via a browser or installed as an application on a phone.

Gartner analysts discussed the future of e-commerce at Gartner Symposium/ITxpo 2011, taking place here through 20 October and on 7-10 November in Barcelona. As the number of mobile phones overtakes PCs, customers will use mobile browsers and applications as the main points of interaction.

"E-commerce organisations will need to scale up their operations to handle the increased visitation loads resulting from customers not having to wait until they are in front of a PC to obtain answers to questions or place orders," said Gene Alvarez, research vice president at Gartner. "In time, e-commerce vendors will begin to offer context-aware mobile-shopping solutions as part of their overall web sales offerings."

"Customers are clamouring for new and easy ways to interact with the organisations they deal with, and no company should think itself immune to this new business dynamic," Mr Alvarez said. "As more people use smartphones, they will expect an extension of their customer experience to be supported by this kind of device while demanding that social aspects of the web be intertwined with this experience. At the same time, organisations are looking toward new countries and regions for growth. As a result, it is time to take a fresh look at your organisation's web sales capabilities to ensure that social software, mobile technology and globalisation are part of your organisation's online future."

Industries such as entertainment, software development/publishing and media are being driven by fast-moving changes in their businesses, such as mobility, and the increasing number of mobile devices available to their buyers. Others are finding that sales of additional services and products can be added to their customer-service-focused websites. Due to consumerisation, sites in all industries are being impacted by customer experience delivered in the retail space, as customers continue to use their online experiences as the benchmark by which to evaluate all others.

Gartner predicts that by 2013, 80 per cent of North American and European online sellers will expand into Brazil, Russia, India, Africa, Japan or China. Organisations based in North America and Western Europe are already launching website-based sales operations in new countries, in the hope of expanding to new markets. These organisations believe that untapped countries can spur growth by enabling the enticing of potential customers who have never purchased from the organisation, but who have a desire for its products.

"The increasing availability of access to the Internet via PCs, laptops and mobile devices is creating new sales channels in countries, because entry barriers are lowering, thereby increasing the number of online shoppers," said Mr Alvarez. "By entering these countries via an internet sales model, organisations can establish a presence in locations without having to create a physical sales location."

E-commerce managers in Type A (leading) organisations and industries, such as travel, hospitality, retail, consumer electronics, media and entertainment, will begin to take advantage of GPS location services enabled by phones to push personalised, location-based content to mobile devices for users who have subscribed to these services. This content will be created via the use of customer patterns and their link to driving sales. These organisations will also have connected (via web browsers and mobile applications) to many social communities, enabling the organisations to tap into the social networks of customers and leverage the wisdom of the crowd.

Worldwide PC Shipments Grew 3.2 Per Cent in Third Quarter of 2011

Thu, 13 Oct 2011 00:00:00 +0200

Worldwide PC shipments totalled 91.8 million units in the third quarter of 2011, a 3.2 per cent increase from the third quarter of 2010, according to preliminary results by Gartner, Inc. These results are slightly lower than Gartner's earlier projection of 5.1 per cent growth for the quarter. The EMEA region contributed to lower-than-expected growth led by a weak Western European market.

"The inventory build-up, which slowed growth the last four quarters, mostly cleared out during the third quarter of this year; however, the PC industry has been performing below normal seasonality," said Mikako Kitagawa, principal analyst at Gartner. "As expected, back-to-school PC sales were disappointing in mature markets, confirming that the consumer PC market continues to be weak. The popularity of non-PC devices, including media tablets, such as the iPad and smartphones, took consumers' spending away from PCs.

"As the PC market faced a slowdown, vendor consolidation has become a more apparent trend in the industry. Lenovo's recent merger with NEC, and its acquisition of Medion, as well as HP's announcement that it may spin off or sell its PC business, underlined this trend during the quarter."

HP, the No. 1 vendor based on global PC shipments, grew faster than the industry average, and its market share reached 17.7 per cent in the third quarter of 2011. Despite announcing in the middle of the second quarter of 2011 the potential spin-off of its PC business, HP experienced strong growth in the US, while outside the US, growth was relatively weak or average.

Lenovo became the second-largest PC vendor in the worldwide market for the first time. The company's expansion was boosted in part by the joint vendor with NEC in Japan. However, its aggressive marketing to both the professional and consumer PC markets accelerated its shipment volume.

Dell's performance was below the industry average in most regions, as the company faced intensified competition in the professional space, where Dell has been traditionally strong. Acer mostly cleared its inventory build-up in the EMEA region by the third quarter of 2011. However, channels have been adopting a conservative position in regard to placing orders following the inventory issues. Asus widened the gap with Toshiba, the sixth-largest vendor. Asus achieved strong growth in China.

In the US, PC shipments totalled 17.8 million units in the third quarter of 2011, a 1.1 per cent increase from the third quarter of 2010. The US PC market experienced year-over-year growth for the first time in three quarters. While the consumer market continued to be weak with disappointing back-to-school sales in the third quarter, the inventory was kept mostly in check as industry expectations were relatively low.

"The main contributor to the weak consumer PC market in the US was intensified competition for consumers' money," Ms Kitagawa said. "Media tablets and smartphones took centre stage in the US retail sector, and the expectation is for continuing demand for these devices throughout the holiday season."

HP showed strong growth in the US PC market, as shipments increased 15.1 per cent in the third quarter, and its market share totalled 28.9 per cent. Despite the potential spin-off of its PC business, HP executives' efforts to give the appearance of "business as usual" seemed to work in the quarter.

Dell struggled as shipments declined 7.2 per cent in the third quarter of 2011. "Dell's issue has been balancing profitability and market share gain, a difficult task in a PC industry where high volumes and low margins are the norm," Ms Kitagawa said.

Gartner's early study shows that Apple experienced the strongest growth among the top five vendors in the US PC market. Apple's PC shipments increased 21.5 per cent in the third quarter of 2011. The robust growth of the MacBook Air continued to lead Apple's overall growth in the US market.

PC shipments in Europe, the Middle East and Africa (EMEA) totalled 26.6 million units in the third quarter of 2011, a 2.9 per cent decline from the third quarter of 2010.

“The PC market in EMEA remained weak in the third quarter of 2011, due to slow consumer demand and lower sell-in to the channel,” said Ranjit Atwal, research director at Gartner. “As a result, the market recorded its third consecutive quarterly decline.”

Acer pulled down the market average as it continued to suffer inventory issues. “The impact on the market of Acer’s difficulties is clear,” Mr Atwal said. “Over the first three quarters of 2011, the EMEA PC market declined 4 per cent, compared with the same period in 2010. Most of the decline resulted from the continued poor performance of Acer, which declined more than 30 per cent. The prolonged inventory clearance will have a permanent impact on Acer, as its direct competitors are securing new channel and retailer partners."

In an uncertain environment, quarter-on-quarter growth provides a better indication of the dynamics of the EMEA PC market. The EMEA PC market exhibited growth of 17.1 per cent from the second quarter of 2011. “This level of growth was higher than seasonally expected, and a sign of some stability, especially after four weak quarters,” said Mr Atwal.

In the third quarter of 2011, HP regained the No. 1 position from Acer and grew its market share by 1.1 percentage points year-on-year. HP managed the impact of separating its PC division better than we had expected.

Asus's shipments grew sharply, with increased sales of mobile PCs in both the consumer market and the small and midsize business market. It moved up to third place, overtaking Dell.

Lenovo performed strongly in both the professional and consumer markets. It took advantage of HP’s strategic issues and Dell’s inability to match Lenovo's prices in the professional market.

Many PC vendors were banking on media tablets to boost their growth in the second half of 2011, but given the collapse of the non-Apple part of the media tablet market, most have refocused on getting PCs into retailers. However, retailers remain cautious about demand and have shortened their order lead times. This passes more cost on to the PC vendors at a time when margins are under pressure.

In Asia/Pacific, PC shipments reached 31.8 million units in the third quarter of 2011, a 6 per cent increase from the same period last year. Vendors continued to stimulate demand aggressively with promotions and prices, benefiting buyers looking for good prices. It also provided an opportunity for some consumers to buy their first mobile PC.

The PC market in Latin America grew 19.6 per cent in the third quarter of 2011. Mobile PC shipments grew 31.1 per cent year-on-year, and desk-based PC shipments increased 6.5 per cent in the third quarter of 2011.

PC shipments in Japan grew 3 per cent, with shipments reaching 3.9 million units. The consumer market received a boost in demand with the introduction by vendors of new consumer models in September. There was also a rebound in production for the professional market, after a drop in enterprise demand because of the higher prioritisation for business continuity plans that coincided with the earthquake and tsunami in March.

Worldwide Social Media Revenue Is on Pace to Total \$10.3 Billion in 2011 and Grow to \$14.9 Billion in 2012

Tue, 11 Oct 2011 00:00:00 +0200

Worldwide social media revenue is on track to reach \$10.3 billion in 2011, a 41.4 per cent increase from 2010 revenue of \$7.3 billion, according to Gartner, Inc. Worldwide social media revenue is forecast for consistent growth with 2012 revenue totalling \$14.9 billion, and the market is projected to reach \$29.1 billion in 2015.

Advertising revenue is, and will remain, the largest contributor to overall social media revenue. Social media advertising revenue is forecast to total \$5.5 billion in 2011, and grow to \$8.2 billion in 2012. Advertising revenue includes display advertising and digital video commercials on any device including PCs, mobile and media tablets.

“Marketers will begin to transition from ‘onetime placement and click of ads’ toward ‘ongoing engagement’ with the internet user and will therefore allocate a higher percentage of their advertising budget to social networking sites,” said Neha Gupta, senior research analyst at Gartner. “This is mainly because social networking sites, with the help of social analytics firms, are able to unlock the interconnected data structures of users — mapping lists of friends, their comments and messages, photos and all their social connections, contact information and associated media.”

To calculate social media revenue, Gartner analysts defined "social media" as including websites where: (1) content is created, consumed, promoted, distributed, discovered or shared for purposes which are primarily related to communities and social activities, rather than functional, task-oriented objectives; (2) content usually takes the form of words, pictures or videos; (3) the web site may be a closed or an open platform; and (4) the flow of expression can be unidirectional or multidirectional.

Social gaming revenue is on pace to reach \$3.2 billion in 2011 and grow to \$4.5 billion in 2012. Social gaming includes revenue that social networking sites earn directly from users who play games that are developed in-house, and the revenue earned by allowing game developers/publishers to use their sites as a platform to let users play with friends on the network. It includes revenue earned from "virtual wallets" within games (such as when users spend virtual money on in-game items like swords or tanks, or to create virtual armies).

“We have seen social networks take a platform-oriented approach to game monetisation. That is, the social networks have evolved into platforms for social gaming by publishing APIs that help build an ecosystem of developers and publishers,” Ms Gupta said. “The dominant monetisation models for social games are ad-led and ‘freemium’ models. The free-to-play games are funded either through advertising (wall advertisements and in-game branding) or through in-game monetary transactions that enable users to ‘level up’ or buy virtual goods.”
Social media subscription revenue is forecast to reach \$236 million in 2011 and total \$313 million in 2012. Few social sites charge subscription revenue, mostly for premium services. Some professional sites such as LinkedIn, Xing in Germany and Vladeo in France, charge a subscription fee from their users for enhanced services, such as an expanded profile view.

“From a revenue perspective, the social media market is still in its early stages, even though it has a large number of users who, in some cases, are exhibiting increasingly mature usage patterns,” Ms Gupta said. “Market participants need to build new business models to tap into this increased usage and users’ increased level of engagement.”

Additional information is available in the Gartner report “Forecast: Social Media Revenue, Worldwide, 2010-2015" at http://www.gartner.com/resId=1802617

Worldwide Platform as a Service Revenue is on Pace to Reach \$707.4 Million in 2011

Wed, 05 Oct 2011 00:00:00 +0200

Worldwide platform as a service (PaaS) revenue is on pace to reach \$707.4 million in 2011, up from \$512.4 million in 2010, according to Gartner, Inc. The market will experience consistent growth with worldwide PaaS revenue totaling \$1.8 billion in 2015.

"Cloud has three technological aspects — infrastructure as a service (IaaS), platform as a service (PaaS) and finally software as a service (SaaS)," said Fabrizio Biscotti, research director at Gartner. "While SaaS is the most developed aspect, PaaS is the least developed, and it is where we believe the battle between vendors is set to intensify."

Initial PaaS products primarily supported application server capability, but the market has since expanded to encompass other middleware capabilities as a service, such as integration, process management, and portal and managed file transfers (MFTs). PaaS offerings are increasingly set to take market share from the low end of the portal, application server and business process management (BPM) markets, but as the technology matures, PaaS offerings will also challenge the upper layers of the market.

Gartner analysts said PaaS offerings are likely to expand the application integration and middleware (AIM) market by bringing in a new range of organisations that otherwise would have been packaged application and office software users.

"One of the likely consequences of the cloud for the application integration and middleware (AIM) market is further market concentration," said Yefim Natis, vice president and distinguished analyst at Gartner. "When application infrastructure is deployed on-premises, organisations can take a best-of-breed approach and integrate all acquired components in their data centre. When middleware services are acquired in the cloud from different PaaS providers – the services remain in different data centres and resist optimised integration. Mainstream users of PaaS services will likely look for providers that deliver comprehensive and integrated PaaS functionality suites – forcing the specialist offerings to consolidate.”

Few providers deliver a comprehensive and integrated PaaS offering, and Gartner said that such fragmentation will be impossible to deal with when users and service providers start to implement large-scale, business-critical applications requiring the simultaneous and in-concert use of multiple PaaS capabilities such as user experience, application servers, database management systems (DBMSs), security and messaging.

Gartner analysts predict a rapid aggregation of PaaS offerings into suites of functionalities, providing users with well-integrated and optimised platform services (from the same or different suppliers), co-located in the same data centre to provide appropriate levels of performance, security, manageability and availability. This process will take place in steps. Initially, around 2013, PaaS functionalities will consolidate around specific usage scenarios, paving the way for integrated comprehensive PaaS offerings to emerge from 2015 and beyond.

"Clearly, from the attention given to this segment by the industry's giants, it is likely that they are viewing PaaS as a strategic undertaking as much as an incremental market opportunity," said Mr Biscotti. "As PaaS suites mature, they may emerge as critical enabling technologies for many cloud-based businesses; at the same time, as companies adopt these platforms, the providers of the platforms will likely leverage them to expand their ecosystem, leverage their natively developed application services (SaaS) or extend their on-premises solutions."

Additional information is available in the Gartner report "Forecast: Platform as a Service, Worldwide, 2010-2015, 3Q11 Update" at http://www.gartner.com/resId=1792219

External Controller-Based Disk Storage Revenue from External Cloud Computing Deployments to Surpass \$1.45 Billion in 2015

Tue, 04 Oct 2011 00:00:00 +0200

Worldwide external controller-based (ECB) disk storage vendor revenue from external cloud computing deployments is forecast to grow from \$267.4 million in 2010 to \$1.45 billion in 2015, according to Gartner, Inc. The market is on pace to total \$417.3 million in 2011, a 56 per cent increase from 2010.

Gartner uses the term "external cloud" to mean any public, private or hybrid cloud that is offered by a third-party provider that services multiple customers, as a contrast to those deployed within individual organisations' internal data centres, which serve only internal clients.

"As external cloud computing emerges as a new segment of the storage market, competition is increasing with leading commercial ECB disk storage vendors developing or acquiring technologies that will serve as a good fit for external cloud deployments," said Sid Deshpande, senior research analyst at Gartner.

ECB disk storage deployed in the external cloud today forms a very small portion of the overall market for ECB storage. Gartner estimates that external cloud deployment constituted only 1.4 per cent of overall ECB disk storage vendor revenue in 2010. However, this segment will grow much faster than the overall market because many external cloud services are still at the early build-out stage.

Although both small or midsized businesses (SMBs) and large organisations are utilising software as a service (SaaS) today, the primary consumers of infrastructure as a service (IaaS) will continue to be smaller organisations. The external private cloud infrastructure market is still in a nascent stage, with hosting providers largely looking to leverage their existing large-enterprise customer base for early customer wins.

On the demand side, in the last 18 months external cloud services have gained increased popularity and traction, with several new providers emerging and ramping up their cloud service offerings. Gartner's research reveals that most ECB storage revenue generated from external cloud deployment in 2010 and the first half of 2011 came from SaaS and IaaS deployments, and analysts said that the SaaS and IaaS provider segments will continue to constitute the bulk of opportunities for ECB disk storage sales through 2015.

"We believe the SaaS providers offer the largest cloud opportunity for ECB disk storage vendors in the short term, as many software service vendors lack a hardware portfolio and may lack the resources to develop their own infrastructure hardware," said Pushan Rinnen, research director at Gartner. "However, SaaS-based vendor revenue will grow much slower than the combined growth rate of cloud application infrastructure and cloud system infrastructure through 2015. Therefore, we believe IaaS will represent a larger long-term opportunity for commercial disk array vendors."

Gartner analysts said the vast majority of cloud opportunities for ECB disk storage vendors lie with SaaS and comprehensive IaaS providers, which offer storage and servers/applications together and require the high availability, reliability and performance of some commercial disk storage arrays. With the exception of a few extremely large cloud providers, such as Google, Amazon and Facebook, which have deep pockets for internal R&D to develop their own storage infrastructure with commodity hardware, enterprise-focused external cloud providers will prefer commercial ECB storage technologies over homegrown storage hardware infrastructures.

"Recognising the inadequacy of older storage architectures to serve public cloud workloads and meet price-to-performance ratios for large-scale deployments, storage system vendors have started focusing on acquiring or developing cloud-optimised storage arrays that provide increased scalability and performance at lower price points," Mr Deshpande said. "While this focus on organic and inorganic technology innovation by storage vendors holds strong promise for external cloud service providers, price points for these cloud-optimised storage arrays will have to decline significantly if they are to find traction among the largest cloud infrastructure deployments."

Additional information is available in the Gartner report "Forecast: External Cloud Opportunity for the Disk Storage Array Market, Worldwide, 2010-2015." The report is available on Gartner's website at http://www.gartner.com/resId=1803316

Gartner Survey Reveals 95 Per Cent of Respondents Expect to Maintain or Grow Use of SaaS

Mon, 03 Oct 2011 00:00:00 +0200

More than 95 per cent of organisations expect to maintain or increase their investments in software as a service (SaaS) and more than one-third have migration projects under way from on-premises to SaaS, according to a survey by Gartner, Inc.

In June and July 2011, Gartner surveyed 525 organisations in nine countries spanning 12 vertical industries to understand their usage patterns and key trends for SaaS in the organisation.

"Respondents cited ease and speed of deployment and cost-effectiveness as the top two reasons for adoption. Leading uses of SaaS were either replacements for on-premises applications or net-new SaaS solutions," said Sharon Mertz, research director at Gartner. "This represents a shift from previous Gartner surveys where more respondents indicated SaaS was being used as an extension to an existing on-premises application.

Nearly 70 per cent of organisations have used SaaS for less than three years, also indicating a continuing stream of net-new users for this deployment model. More organisations are renegotiating contracts early not only to satisfy demands for more functionality and an expanding user base, but also to take advantage of improved financial terms as downward pricing pressures continue in the wake of economic turbulence and increasing vendor competition.

"Although adoption trends are generally positive, SaaS is not without its challenges," Ms Mertz said. "More than one-third of respondents indicated issues with their SaaS deployments, citing limited integration with existing systems, network instability, and longer-than-anticipated implementation cycles as the highest-ranked challenges during deployment.

"In addition, most respondents still indicate that no policies have been instituted to govern the evaluation and use of SaaS, suggesting that little progress has been made since the previous survey in developing governance processes. The importance of governance mechanisms will continue to increase as SaaS becomes a larger element of a company's overall sourcing strategy."

A comparison of Gartner SaaS user-survey results from 2008 and 2010 indicate that the percentage of decisions made at the executive level is increasing. The latest survey results show that the decision process is shifting to a joint decision between the business and IT. Analysts found that deployments of both horizontal and vertical-specific SaaS solutions (VSS) vary greatly by industry, as do planned deployments for 2012 and those considered beyond. Many industries that have not pursued SaaS in the past are beginning to do so.

Currently, communications (52 per cent), utilities (51 per cent), and banking and securities (49 per cent) industries rank highest with respect to SaaS deployed across the horizontal and vertical-specific categories sampled. In 2012, those industries ranking highest with respect to their plans to use SaaS include federal government (33 per cent), banking and securities (22 per cent) and wholesale trade (20 per cent). Beyond 2012, top industries considering SaaS are manufacturing and natural resources (37 per cent), wholesale trade and retail (each 29 per cent).

When respondents' 2012 deployment plans are combined with those considering SaaS beyond the coming year, federal government ranked highest (60 per cent), followed by manufacturing and natural resources (50 per cent), wholesale trade (49 per cent) and retail (46 per cent).

"The survey illustrates how some industries lagging in past SaaS deployments are currently poised to use and consider it going forward and a remarkably strong upward trajectory with respect to the consideration of SaaS is occurring," said Robert Anderson, research vice president at Gartner. "Providers seeking to target industries with horizontal and vertical-specific SaaS applications should first analyse overall trends as to current deployments, 2012 plans and other longer-term considerations to improve the timing and prioritization of their rollout strategies."

Similarly, opportunities for vertical-specific SaaS solutions vary across and within the industries surveyed. Healthcare, insurance and retail industries currently have the highest level of SaaS-based VSS already deployed. Healthcare (49 per cent) is also ranked by respondents as the top industry planning to consider SaaS in the future, followed by banking and securities (45 per cent) and federal government (42 per cent). Popular VSS solutions where SaaS will be considered going forward in these industries include medical coding/transcription and physician electronic medical health records in healthcare, core banking and related services in banking and securities, and case and records management in federal government.

"There are significant variations of VSS SaaS deployed both across and within industries surveyed. Many that have delayed consideration of SaaS for VSS until now, such as federal government and banking and securities, plan to use it in the future," Mr Anderson said. "Providers planning to target VSS SaaS opportunities should analyze current and planned future deployments across and within industries, as experience and interest levels vary and are shifting rapidly."

Additional information is available in the Gartner report "User Survey Analysis: Software as a Service, Enterprise Application and Vertical Software Markets, Worldwide, 2011." The report is available on Gartner's website at http://www.gartner.com/resId=1801814

Worldwide Semiconductor Capital Equipment Spending to Decline 19.2 Per Cent in 2012

Fri, 30 Sep 2011 00:00:00 +0200

Worldwide semiconductor capital equipment spending is expected to total \$35.2 billion in 2012, a 19.2 per cent decline from projected 2011 spending of \$43.5 billion, according to Gartner, Inc. Excess electronics inventory and poor demand as a result of the slowing macro economy are to blame for the declining spending.

"The slowdown appears to be across the board. While it appears the foundries will continue their capacity race at 28 nanometres (nm), spending on 45 to 90 nm technologies is slowing, and some equipment from those technology nodes is being used for 28 nm production to help increase capacity utilisation," said Klaus Rinnen, managing vice president at Gartner. "Due to weaker-than-expected growth in the production units of media tablets, NAND spending has softened slightly as well."

Gartner expects the slowdown to last for the remainder of 2011 and into the first half of 2012. By mid-2012 Gartner expects the supply and demand to be more in balance, so DRAM and foundry will need to begin to increase spending to meet an increase in demand as the PC market rebounds and consumers begin spending once the economy stabilises a bit. The next growth year is expected to be 2013, when capital spending will increase by 18.4 per cent

Worldwide wafer fab equipment (WFE) revenue started slowing in the second quarter of 2011, and the decline will accelerate in the second half of 2011 with the added pressure of slowing device sales and excess inventory liquidation. WFE revenue is forecast to grow 9.4 per cent in 2011, but decline 19.6 per cent in 2012. The need for leading-edge equipment is benefiting immersion lithography, etch, certain segments in deposition involved in double patterning, and critical leading-edge logic processes. Leading edge is not the only benefactor of expanding mobile media markets. Analogue and discrete devices needed for power management and energy management will drive the need for 200-millimeter (mm) equipment.

Worldwide packaging and assembly equipment (PAE) revenue is projected to decline 1.4 per cent in 2011 and decrease 17.5 per cent in 2012. Orders for PAE have softened more aggressively than previously expected as supply comes in line with expectations. For back-end process providers' capital expenditure (capex) purchases, 3D packaging and copper wire bonding for lower-cost solutions will still be the focus, but at a reduced pace. Most major tool segments will see slightly negative sales in 2011, but advanced tooling will once again be stronger than the general market this year. For 2012, traditional tooling segments will see a sizable decline in sales, while advanced packaging segments are expected to fall less than traditional when compared with 2011.

For 2011, the automated test equipment (ATE) market is expected to remain essentially flat with revenue growth at 0.4 per cent. The market has been driven by the continued demand of system-on-chip and the advanced radio frequency segments of the market. Memory ATE will likely pull back in 2011 as DRAM capex softens. However, NAND testing platforms are expected to be stronger than the general memory test market this year. For 2012, analysts expect a significant decline in tester sales, though memory systems should hold up reasonably well compared with most cycles as DRAM capex returns.

Additional information is available in the Gartner report "Forecast Analysis: Semiconductor Manufacturing Equipment, Worldwide, 2010-2015, 3Q11 Update." The report is available on Gartner's website at http://www.gartner.com/resId=1801517.

10 Key Actions to Reduce IT Infrastructure and Operations Costs by as Much as 25 Per Cent

Wed, 28 Sep 2011 00:00:00 +0200

As many IT organisations are under intense pressure to continue to implement cost-cutting initiatives, Gartner Inc., has identified 10 actions that can reduce IT infrastructure and operations (I&O) expenses by 10 per cent in 12 months, and as much as 25 per cent in three years.

"I&O represents approximately 60 per cent of total IT spending worldwide, so with IT budgets remaining tight, it's no wonder that I&O cost-cutting pressure continues to be intense," said Jay Pultz, vice president and distinguished analyst at Gartner. "When it comes to I&O cost reduction, there is no 'magic bullet,' but best results can be achieved by implementing as fully as possible the 10 key cost reductions we have identified."

Gartner analysts said that due to priority conflicts and resource constraints, few I&O leaders said they have implemented 50 per cent or more of the total cost reduction opportunities these 10 key actions offer. However, depending on where an organisation is now, fully implementing these 10 cost-cutting suggestions can provide significant savings.

The 10 key actions to implement to reduce IT I&O costs include:

Action 1: Defer Noncritical Key Initiatives
I&O leaders need to re-examine their key initiatives to determine which ones to focus on as near-term priorities. In doing so, there are three major questions to ask: Does the I&O key initiative strongly support a high-priority business initiative that needs to be completed in the near term? Does the I&O key initiative lower the I&O cost structure in the time frame required? Does the I&O key initiative lower risk by upgrading I&O to prevent major outages or severe performance deterioration?

Action 2: Re-examine Networking Costs
When it comes to I&O spending, the data center and the network claim the lion's share of costs. Because nearly half of the network expenses go to telecom service providers (TSPs), network managers need to continue to renegotiate contracts with these vendors to ensure that their contracted rates are market-based. Substantial steps can also be taken to optimise network costs by refining the design and sourcing of their networks.

Action 3: Consolidate I&O
I&O consolidation is closely related to standardisation, integration and virtualisation. In the past, the rise of distributed computing and other trends drove the decline of large data processing sites. Now, however, data centres are rising in importance, and Gartner expects this trend to continue throughout this decade, as server rationalisation, hardware growth and cost containment drive the consolidation of enterprise data processing sites into larger data centres.

Action 4: Virtualise I&O
Servers run at very low average utilisation levels (less than 15 per cent). Virtualisation software increases utilisation typically by fourfold or more, which means for a given workload that can be virtualised, a company can typically reduce the number of physical servers by fourfold. Conservatively, this means hardware and energy costs are each reduced by more than 50 per cent. As with consolidation, virtualisation can be applied to many I&O platforms: Unix servers, storage, networking and client computing.

Action 5: Reduce Power and Cooling Needs
In the past, newly built data centres often opened with huge areas of pristine white floor space, fully powered and backed up by an uninterruptible power supply (UPS), water- and air-cooled, and mostly empty. With the cost of mechanical and electrical equipment, as well as the price of power, this model no longer works. New design approaches can result in data centres that utilise significantly less power, take up less space and cost much less.

Action 6: Contain Storage Growth
Compute, networking and storage capacity are all growing at annual double-digit rates, with storage growing the fastest by far. Gartner predicts that, by 2016, organisations will install 850 per cent more terabytes than they have installed in 2011. Throwing terabytes at the problem is no longer a viable solution. With capacity growth far outstripping cost declines, tighter control is required. Multiple approaches need to be adopted — including the use of storage virtualisation, automated tiering and storage resource management (SRM) tools.

Action 7: Push Down IT Support
Support for end users and the enterprise typically is about 8 per cent of total IT spending, and most I&O organisations have at least four tiers of support, each with a different cost point and level of expertise. To reduce costs, organisations need to drive those support calls down to the lowest tier that can satisfactorily resolve users' issues.

Action 8: Streamline IT Operations
I&O accounts for approximately 50 per cent of the total enterprise IT head count, and most of the I&O staff is involved in operational processes of a day-to-day and tactical nature. To contain head count and associated costs, these processes need to be streamlined and as efficient as possible. This typically entails implementing ITIL, the de facto standard framework in IT operations. The principal goal is to improve service management and quality, but ITIL has been known to reduce operating expenses as well.

Action 9: Enhance IT Asset Management (ITAM)
ITAM by itself doesn't reduce I&O costs; however, it is a very effective tool to identify and assess cost reduction opportunities. ITAM can help determine the life of certain assets, defer upgrades and eliminate or combine software licenses, as well as replacing certain maintenance service contracts with a time-and-materials approach. IT asset repositories are generally the most effective tools to help in this endeavour. These tools can maintain dates, manage changes to assets and send out reminder emails to ensure that the life cycle process is proactively managed.

Action 10: Optimise Multisourcing
Sourcing is perhaps the most strategic decision facing I&O leaders today. The decision is not as simple as whether to outsource or insource all of I&O. IT leaders can make separate sourcing decisions for virtually any I&O component, system or function. The key decision criteria are controlling those aspects that are of strategic and critical importance to the business, playing to the strength of available staff, defining clear lines of demarcation, keeping the number of vendors involved to a small, manageable number and determining what makes solid financial sense.

Industrialised Low-Cost IT Services to Transform the IT Services Market

Mon, 26 Sep 2011 00:00:00 +0200

Chief information officers (CIOs) should consider adopting industrialised, low-cost IT services (ILCS) to reduce the cost of “running the business”, while controlling the risk, integration and customisation issues, to increase the business value of IT and enhance its perception by the business, according to Gartner, Inc. CIOs said that delivering differentiation and additional business value, while reducing the cost of IT will be their business and IT priorities in 2011, according to the Gartner Executive Program (EXP) 2011 CIO agenda survey*.

“While there are multiple ways to reduce the cost of IT delivery, as well as to increase the value of IT, the trend towards ILCS will become paramount for end users to trade nonessential customisation for better and less expensive services,” said Claudio Da Rold, vice president and distinguished analyst at Gartner. Gartner predicts that despite being an embryonic market, by 2015 industrialised services will represent more than 30 per cent of the IT services market and cloud services are expected to become a \$177 billion market by 2015, of which \$77 billion is based on advertising business models.

ILCS as managed, multitenant, ready-to-use IT services (infrastructure, applications or business processes). They are designed and offered as no-frills services with optional add-ons. Implemented as standardised, automated, configurable and scalable services, their entry-level price — expressed as price per user per month or price per unit per month (PUPM) — is very low and attracts a high number of prospects. The combination of industrialisation and cloud computing has significant potential to deliver ILCS.

A historical analysis of IT services pricing showed that organisations tolerate high IT usage costs, for an activity, capability, deliverable or outcome, only if there are no alternatives. Now, thanks to new delivery models, industrialised services and cloud computing, Gartner analysts see increasing numbers of low-cost offerings in which the price of specific unit of function (such as email or software as a service) is instead measured in PUPM (per user or per unit, per month).

Gartner has evaluated clients’ cost levels and estimated prices for industrialised low-cost services. It found that an email configured as ILCS should realistically be about \$6 PUPM and is today approximately \$8 to \$10 PUPM, and entry-level offerings are advertised today at \$3 to \$4. With the email market in flux and the price of traditional in-house/hosted/outsourced mail under pressure by the lower price of cloud email available in the market, the email service is an area in which clear signals of industrialisation and low price points are emerging. Another example includes the use of the infrastructure utility for SAP (IU4SAP). IU4SAP is an outsourced platform that runs often highly customised clients in SAP application environments. Built on industrial principles (standardisation, virtualisation, automation) these offerings provide good service quality at low price points as companies like Areva, Oxea, Keiper, Rio Tinto and around 500 others have already discovered. This represents one of the earlier, and, so far, the most important cases of ILCS for business-critical and core functions and should realistically be delivered for around \$17 PUPM.

Infrastructure utility services (IUS) are one aspect of the evolution toward industrialised services, which Gartner predicts will have a compound growth rate of more than 30 per cent for the next three years.

While the price of ILCS offerings be can much lower than internal costs, the total cost of ownership of ILCS can be higher, depending on retained costs such as transition, customisation, integration and risk management. Despite this, there are some early IUS and cloud-based solutions that were successfully evaluated, selected and implemented and promise much for the future of ILCS solutions.

EasyJet is a good example of an end-user company that is using cloud computing first as a way to minimise costs and then exploiting cloud services to extend and complement its internal systems. EasyJet wanted to extend its existing reservation and departure control system to agents using mobile devices and built cloud-based solutions using Microsoft Azure. Azure managed the connectivity to the myriad endpoint devices in a manner that was less expensive and less complex than what would be required if EasyJet created it in its existing internal systems.

“Not all corporate IT will be delivered through ILCS and many “good-enough” services will remain in-house,” said Frank Ridder, research vice president at Gartner. “However, industrialised services represent the destiny of the IT services industry. They are, in fact, the next step in outsourcing and managed-service provision, and they span all layers of the IT services value chain: infrastructure, applications and business processes. Overall, we believe that, from a pricing perspective, the IT services industry is where the airline industry was in 2000. It is ready to be transformed — and disrupted — by an ILCS model.”