Gartner predicts channel doom and gloom

Gartner predicts channel doom and gloom

At least 10 of the top 25 Australian system, service and channel vendors will disappear either through acquisition or by withering away, while the top five enterprise resource planning (ERP) organisations will grow their market share from 55 per cent today to 80 per cent within five years.

These were among the predictions espoused by Bob Hayward, Gartner Group's vice president, Asia Pacific Research in his speech at the organisation's 1998 Symposium which attracted nearly 1200 Australasian delegates this week.

Hayward said users will have to adjust to a new set of business drivers, watch year 2000 work swallow record amounts of their budgets, and learn to live with continuing shortages in critical skills. He claimed that traditional business drivers for IT investment like efficiency and productivity are giving way to "value creation" and business effectiveness, which will trigger a dramatic rethink of how IS organisations are run, how they are measured, and their relationship with the business.

He predicted IT budgets and staff will come under extreme pressure as Y2K expenditures eat up 44 per cent of the average IT budget in 1999 compared with 29 per cent this year and 5 per cent last year.

He placed Australia in a group with Western Europe, Hong Kong and Israel in terms of its Y2K preparations. That is well ahead of Eastern Europe and most of Asia but behind the US and Canada.

As part of a shift toward IT-enabled virtual enterprises, in-house IT organisations will continue to shrink and evolve into a broker of IT services while selective outsourcing becomes the norm.

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