To find out where the hot markets for 1999 are going to be, ARN investigates where the vendors are focusing their efforts and attentionNetworkingIT infrastructure and the Web meet. What are employees of IBM chanting throughout the company these days? e-business. It seems this buzzword is now thoroughly synonymous with Big Blue, becoming the company's number-one hot market and manifesting itself in a plethora of new IBM products and services - and even in new-partner recruitment. Head evangelist and CEO Lou Gerstner has ordered staff to galvanise efforts behind e-business initiatives. Apparently he's made a lot of converts. Big Blue has been amassing followers, not to mention some big bucks.
"The backlog for e-business is well into the billions of dollars," boasts Ian Bonner, an IBM worldwide channel marketing VP. "There's so much on the table we could feed an army."
Of course it helps that IBM bolsters its e-business product and service offerings with a big dose of marketing. The vendor isn't pursuing vertical markets per se, Bonner claims.
Rather, he says, "the killer app is the marriage of any company's IT infrastructure into the Web environment". By the way, if any solutions integrators want to join the party, IBM welcomes you.
Optimise ERP for networks when you consider hot markets, don't think vertical - think customer profile. So says Eugene Lee, Cisco Systems' VP for small- and midsize-business marketing. Lee's unit targets new customers based on company profile - namely 100- to 500-people firms that manufacture and distribute products and that sell to other businesses. Lee says that networking needs of such companies tend to be as much as six times the national average.
Consequently, supply-chain automation and ERP (enterprise resource planning) will be hot spots in the coming year. Cisco is attacking these markets by joining with ERP vendors, most notably PeopleSoft and Baan, to optimise applications for networks. "Generally speaking, ERP systems weren't designed to be network-friendly," Lee says.
Virtual private networks (VPNs) and 10/100Mbps desktop switching will also be key technologies in the coming year, he says. Riding on such technologies, Cisco hopes to continue to improve its revenue from two-tier distribution, which rose to $US1.1 billion in financial year '98 from $170 million in financial year '96.
Target ATM and VPNs. This year expect the importance of networking to continue seeping into just about every facet of business. What next? VPNs and ATM (asynchronous transfer mode) technology will be hot, according to Dave Ramos, Nortel Networks' global marketing VP. Also add networked multimedia.
"The more it's true that the network is the business, the more likely we'll be in that account," Ramos says.
There's big money behind those words. Nortel Networks acquired Bay Networks last year, resulting in an $18 billion powerhouse embodying a chocolate-in-my-peanut-butter blend of voice and data offerings. This coming year the company will continue its focus on big vertical markets, including finance, federal and state/local governments, healthcare, and education. Nortel boasts that it counts 40 of the world's 50 largest banks among its customers.
Two of the hottest opportunities in 1999 are administration and connectivity in education, especially for the K-12 market, according to Jake Schlumpf, product manager for Compaq's GEM (government, education, and medical) team. Compaq divides the education market into two distinct pieces: K-12 and postsecondary.
"We have the Technology Efficient District/Technology Assistance Center, or TED/TAC, which creates a single superintendent's workspace for running a school district," Schlumpf says.
The push for Internet connectivity is opening new opportunities for servers, networking, and security products, while creating projects for integrators that can connect both legacy school systems and student personal systems to the network. Schlumpf says connectivity and portability will be key concerns. Wireless networking products have tremendous potential, he notes, because so many schools have entrenched asbestos issues, making cable-pulling expensive. He also believes Windows CE Jupiter-class hardware and inexpensive subnotebook computers will have a tremendous impact as student workstations in the market.
Leverage AS/400 for messaging and Web apps. Call it the Domino effect. This year, look for IBM to use Lotus Domino as a dominant theme in driving new and upgraded AS/400 deployments. Debra Thompson, VP of enterprise systems in the AS/400 division, sees strong growth in vertical markets such as education, with its need for Web development, and the healthcare industry, where new laws on information access make high-availability record-sharing crucial. Hot growth is also happening in manufacturing, where companies are replacing older MRP (manufacturing resource planning) applications with ERP suites.
"Our implementation times are about half those of other Unix systems and about a third the time of Windows NT systems," Thompson claims.
As with other IBM divisions, Java and Domino Server are core themes involving any discussion of development and applications. Likewise, an AS/400's ability to provide an "NT server on a board" makes a strong case for using its systems-management facilities to cross AS/400 and Windows NT lines.
Mainframes a "hot" market? IBM thinks so. Skip Wyatt, vice president of brand and marketing for IBM's S/390 mainframe division, sees IBM's big-iron business growing across a variety of markets in 1999. Wyatt says he tends to view markets in terms of workload rather than application. He points to e-commerce and ERP as drivers for the hottest activity around mainframes. e-commerce means Web-enabled applications reaching back-end mainframes.
"IT strategies are allowing more integration between customer-facing systems and core business systems," explains Wyatt. "We've seen more than 200 customers start to migrate their ERP back onto mainframes," he says, pointing to transaction loads and the need for server-count reduction as pushing the trend. Looking ahead, Wyatt sees Parallel Sysplex becoming a key technology - with its scaling and availability impact - matched on the software side by Enterprise Java Beans.
"By early 2000 more than 80 per cent of application development will be component-based," he added.
In retail in the coming year, will the packaged-applications market promise to be, as Sir Walter Scott once said, "fierce as frenzy's fever'd blood"? Yes, according to SAP, which foresees heated activity this year, especially in vertical markets like retail. In the past, retailers worked with packaged software to fulfil human resources and accounting functions.
However, their merchandise-management systems, which represent the heart of their businesses, typically ran on custom-built software. But times are changing. Driving change is Y2K remediation, says Dagmar Fischer-Neeb, SAP director of worldwide industry marketing. "Retailers experienced how expensive it can be to maintain custom homegrown systems, and they don't want to deal with that anymore."
To target this growing market, SAP created Business-to-Business Procurement, a packaged software designed to help retailers communicate electronically with suppliers. The software consists of two applications, one for procurement and one for order-taking, offering a way to communicate across applications and helping to facilitate inventory management.
Converge on component-based development. Iridium LLC's recently launched satellite-based telecom service exemplifies two of this year's hottest markets: telecom and component-based application development. Platinum Technology, maker of systems-management software, played a key role in building infrastructure for Iridium, which bills its portable handsets - designed to work anywhere in the world - as the first truly global telephone system. Hal Carr, executive VP of Platinum's Global Consulting Organization, says the Iridium deal combines a hot vertical market with a hot technology.
"We came into Iridium when it was under a very strict deadline, to ready the software for the launch of the satell- ite-communications capabilities," Carr reports.
Platinum put together a component-based development strategy that drove a high degree of reuse into software assets, he says. Iridium reportedly made "great strides in application-development productivity" as a result. "Not only were we dealing with a telco," notes Carr, "we were dealing with one that wanted the cutting-edge technology to drive its business."
Check out digital libraries. What'll drive disk storage this year? Hint: take a look at one of IBM's oldest (literally) customers. The Vatican Library, founded in 1451 by Pope Nicholas V, plans to scan its entire library into an online system. "The digital library is a leading application that's just starting to roll out now," says David Walling, strategic marketing manager at IBM Storage Systems Division in San Jose. Not only will digital archives drive storage systems, they will drive demand for Web servers as well. For instance, the Vatican Library is storing its card catalogue - information that's available to the public via the Internet - on an IBM RS/6000 server. "Somewhere in your storage hierarchy," Walling explains, "you must identify a server where that data is going to be initially collected before someone mines against it." Other large organisations have already begun digital-archiving efforts. TV network CBS, for example, has begun digitising its news archive. Digital libraries are gaining greater acceptance, thanks in part to the accessibility afforded by the Internet and to advancements made in data-mining software and scanning technology.
Manage storage resources for high-demand customers. Storage-area networks (SANs), centralised storage, and high-availability applications will offer big opportunities in storage this year, predicts David Spenhoff, marketing VP at Veritas Software. For example, Spenhoff sees high demand in storage-resource management, which includes the tools and applications used to manage storage networks. "It's the most rapidly expanding segment in the storage marketplace." Spenhoff forecasts storage-management solutions growing to 30 per cent of the overall storage market over the next three years, up from about 6 to 10 per cent today. Storage demands will be especially acute in vertical markets such as finance, telecom, and state/local government, he adds. These markets have in common huge amounts of data, along with strict IT requirements and continuous data-availability policies.
Focus on digital video for DLT sales. Mass-market digital video will be a key driver of DLT (digital linear tape) drives this year. Industry analysts are bullish. The DLT market will grow to 637,000 units in 2003, from 357,000 drives in 1997, according to market researcher Freeman Associates. Similarly, DLT revenues will rise to $1.35 billion from $850 million. Banking on such predictions, Quantum acquired DLT library-systems manufacturer ATL Products last September.
Subsequently Quantum placed a big bet on digital video, fine-tuning its tape drives to handle the performance and capacity demands for professional-level digital-video applications. "We expect this to continue as a hot vertical market," says Peter van Cuylenburg, a Quantum president in charge of specialty storage products. "Digital video has already embraced DLT technology," he notes, "which provides high capacity, fast transfer rates, and reliability."