2011 was an eventful year in IT with numerous technology highlights. 2012 should be just as interesting.
2011 was challenging. It's that simple, according to IDC A/NZ market analyst, Amy Cheah. This was despite major industry-wide stand-outs such as the launch of ultrabooks, the first look at Microsoft’s Windows 8 and the release of Google’s Android 4.0 Ice Cream Sandwich OS.
“The PC market has gone through a roller-coaster year amidst weakening consumer sentiment and wavering economic conditions,” she said.
“PCs have taken a beating from media tablets, continuous price erosion in the retail space and suffered the shock of having the largest market player announcing its plan to divest its PC division and then having recalling the decision.”
In addition, she said the industry has been hit hard by hard disk shortages following severe flooding in Thailand. However, despite these tough conditions, IDC has seen the PC industry remain resilient and still managed a six per cent year-over-year growth in 2011.
While Cheah expects that 2012 will continue to be a challenging year for the PC market, as it will start off with an industry-wide HDD shortage, it is expected to rebound once the shortage is resolved in the second half of 2012, hopefully while riding on the success of Windows 8 to boost recovery.
“Despite Microsoft’s untimely entrance into the tablet market, if the vendor gets it right with Windows 8 the opportunity for PC vendors and partners to tap into the tablet market with a familiar platform will be immense given the wide existing installed base of Windows users,” she said.
Cheah added that while the HDD shortage issue will be a challenge in the first half of 2012, she also expects it to be a blessing in disguise for major vendors who are quick to react to secure supply and gain share from “smaller vendors which lack the economies of scale and relationship with key suppliers.”
In particular, IDC predicts that the launch of Windows 8 will intensify competition as the end user device landscape continues to converge with more and more vendors.
“With the proliferation of devices and platforms, be it PC, mobile phone or eReader vendors, the challenge for vendors and their partners in 2012 will be to stay relevant with the constantly changing taste of consumers, as well as providing IT decision makers in organisations holistic roadmaps and solutions to an increasingly heterogeneous enterprise workspace,” Cheah said.
The industrial buzzword for 2011 continued to be the ubiquitous “Cloud", and Gartner datacentre systems principal analyst, Errol Rasit, feels that the Australian marketplace has been no exception.
As virtualisation in the datacentre has continued to proliferate, Gartner has seen many organisations get into it for the first time in 2011 whilst others are investing in Cloud computing both on premise and from third party providers.
“Spending has been positive and innovation continues in datacentres as we’ve emerged from the global economic crisis,” Rasit said. However, he points out that the risk factor is the economies in the West that still have not fully recovered, so there is still “much to watch” from a macro-economic sense next year.
With the industry having weathered the tsunami in Japan and most recently the floods in Bangkok, which have affected many citizens but also HDD manufacturers located there, Rasit expects datacentres to continue to feel the repercussions of these disasters well into 2012.
The biggest opportunity that Rasit sees in 2012 is harnessing the power of cloud computing, as he feels that the agility of this type of computing makes it very attractive to many organisations, whether they are big or small. “The difficult part is finding what style of cloud suits your own organisation,” he added.
Gartner has already seen many organisations get into the Cloud as a way to “provide an answer to senior management” only to suffer from a “build-it-and-they-will-come” mentality.
Rasit also claimed that there the lessons from the dot-com build up and bust should not be ignored, and that IT organisations really need to focus on what the business wants and how they can deliver answers to those problems, as the cloud may not be the right solution.
“Today’s cloud offerings may not be best fit yet, so the traditional wait and see approach is not a bad strategy if you’re struggling to see the value of the cloud,” he said. “The Cloud should be treated as a means to enable business, so IT organisations which understand their business requirements will understand that cloud ROI is around agility and speed, and thus will benefit from it.”
As an example, cloud and managed services were the stand out growth areas for Thomas Duryea Consulting’s business in 2011, prompting the firm to expand its operations into NSW.
For Thomas Duryea CEO, Andrew Thomas, procuring the infrastructure to back end the company’s cloud services was one of the highlights for 2011. “The launch of its DR-as-a-Service solution was key, as it paves the way for the delivery of future Cloud services in 2012,” he said.
Some of the opportunities he foresees for 2012 include mobile devices and BYOD continuing to grow along with in-house development of applications, both Web and native apps, to allow companies and users to make more use of these devices. “Already in 2011 I was able to go on an Australian off-road safari across WA using my iPad and satellite phone to keep in touch with the office,” he said.
Thomas also anticipates that the Cloud will move from its current “cloudy” status as more services become defined, leading to not only a strong adoption of SaaS and IaaS servers, but “dynamic and strong growth” in PaaS service offerings.
The other changes Thomas Duryea looks forward to in the next six to 12 months is how networking and its role will evolve in enabling the Cloud and ensuring connectivity in the cloud connected world, as well as growing prospects in storage, especially for organisations going through a refresh to assess their current infrastructure and deliver cost and efficiency savings to the business.
Looking at the work force, he expects that specialists will become more specialised and generalists becoming more general in 2012. “Virtualisation engineers in the mid-market now need a lot more skills, such as storage and management skills, whereas your management specialists will need deeper experience in fewer platforms,” he said.
Demand for more developers is also anticipated, and Thomas attributes it to companies moving towards IaaS offerings and responsibilities such as virtualisation, storage and networking being taken care of by Cloud providers.
Thomas Duryea foresees security still being a major issue in 2012 and will be keeping a close eye on how the Privacy Commissions Public Disclosure laws will progress. “This will place more pressure on businesses to meet the heightened compliance obligations and provides an opportunity for service providers who can assist them with this,” Thomas said.
The other area of concern is the economy situation worldwide and how it will affect Australia. “While spending on projects and capital investments may decline during tougher times, cost saving technologies such as the Cloud, remain in demand as businesses look to do more for less,” Thomas said.
Having been on the frontlines, Brennan IT managing director, Dave Stevens, also summed up 2011 as being all about the Cloud. The company saw strong growth in IT infrastructure revenues, which was driven by demand for Cloud services, so Stevens expects that Cloud computing will account for 30 per cent of the business’ total revenue within the next 12 months.
“I think there is a big opportunity for the channel to adopt a virtual on virtual approach, where established Cloud players make available to resellers big chunks of hardware hypervisor layer to on-sell to their customers,” he said.
With the economy turning and the Cloud becoming the preferred compute for many businesses, Stevens warns that if resellers that have not already made the move to cloud services by 2012, or those who may not have the funds required to build out their own infrastructure, run the risk of never catching up.
While Cloud will continue to be a major part of the IT conversation in 2012, companies such as Brennan IT will be wary of the current economy, as there is the possibility of business confidence taking a hit in 2012 if there is uncertainty in the market, which in turn could leads to a cut in discretionary spending on IT projects.
Another area of growth in 2011 was around information infrastructure off the back of exponential increase in the amount of data generated.
Hitachi Data Systems A/NZ VP and general manager, Neville Vincent, expects the amount of information being created by organisations to continue to grow in 2012, and this will translate into further opportunities as customers will look for help to manage this growth and use it to “propel their business forward instead of acting as a drag.”
While he sees it as a good chance to work with organisations and provide them with partnership and information management services in 2012, Vincent admits that one of the biggest challenges for the industry will be the measurement of success.
“When the market moves from a transactional build, own and operate model to service orientation, how will analysts measure the leaders in this space?” he asked. “At the moment they monitor from shipments, but this will change, especially for organisations in transition.”