Which Companies Will Lead the IT Industry's New Mainstream Platform?

'Tis the season for predictions.

Let's see.  Well, we have the 2011 world prophecies from top psychic astrologers.  I was elated to read on this web site that "all predictions of life on Earth and End of the World in 2012 will turn out to be false and untrue."  So not only "false" but "untrue" as well.  Now that's a relief.

The 2011 Oscar predictions started making the rounds in October. CNBC announced earlier today that on Dec. 8 it will unveil its predictions for the 2011 economy.  I also saw an article about the 2011 food trend predictions made by 1,500 chefs.  And of course there are thousands of professional sports-related predictions including this one from The Orange Country Register:  Lakers will lose!

But in a sea of annual predictions on subjects that are really just trivial, there's one list that I look forward to each year at this time.  And once again, it did not disappoint.

If you haven't seen International Data Corporation's 2011 IT industry predictions, you can find it here.  You to have register with IDC to read it, but if you want only the summary here's the press release.

Here are the reports' highlights:

• spending on public IT cloud services will grow at more than five times the rate of the IT industry in 2011, up 30% from this year.  Why?  Because more and more businesses, small, medium and large, are realizing the friendliness of cloud economics, the flexibility and reliability of cloud computing models, and that security issues have been over-stated;
• mobile computing will continue to explode.  Ok, that's obvious.  But what about this:  IDC says close to 25 billion mobile apps will be downloaded next year! That's compared to "only" 10 billion or so which were downloaded this year.  It's not time to kiss our PCs good-bye quite yet.  But it will be interesting to see how the manufacturers with PCs in their DNA reinvent themselves in a world where mobile computing dominates, and
• in 2011, business finally gets social.  More than 40% of SMBs will use social networks to promote themselves and we'll see a consolidation tsunami as the bigger software suppliers scoop up social software vendors to fuel their social business efforts.

The key prediction from IDC is not only will cloud computing, mobile computing and social networking grow and mature next year, but they will "coalesce" into a new, mainstream platform.  And the players who are today's leaders in the cloud, mobile and social may not be the same companies who will be leaders of the new coalesced platform.

"In addition to creating new markets and opportunities, this restructuring will overthrow nearly every assumption about who the industry's leaders will be and how they establish and maintain leadership," said Frank Gens, senior VP and chief analyst at IDC.

In 2010, the cloud, mobile and social all found their rhythm.  Things will get even more fascinating next year when they share the same stage on prime time. 

I don't know about you, but I can hardly wait! 

Cloud Computing: Risk and Value are Two Sides of the Same Coin

For every report that comes out with research pointing to cloud computing as the new IT panacea for enterprises, is a report with an opposing point of view.

The "he said, she said" nature of some of these reports is reminiscent of the early days of "SNL" and the "Point-Counterpoint" parody made famous by Danny Akyroyd and Jane Curtin. "Jane, you ignorant, misguided ...." .."Dan, you pompous ...."

Ok, perhaps the landscape isn't that contentious -- at least, not yet.

The latest report highlighting the unease many senior IT execs have with cloud computing comes out of ISACA, a U.S.-based organization for information governance, control, security and audit pros. It boasts 86,000 members in 160 countries, so its influence is far and wide. The ISACA tackles the cloud computing question in its first annual ISACA IT Risk/Reward Barometer survey and examines the results in a white paper it collaborated on with the Cloud Security Alliance. Of the 1,809 U.S.-based IT survey pros who took part in the survey, many work for Fortune 500 companies across engineering, financial services, education and health care. And most, apparently, are far from ready to take the cloud computing plunge.

Two key findings:

• only 10% of respondents' organizations plan to use cloud computing solutions for mission-critical IT services, and


• one in four respondents said their organizations have no plans to use cloud computing for any IT services at all.

So even during this extended period of lean IT budgets, a period when CIOs are stretching their IT imaginations and IT staffs, a solution that is battled-tested in many areas is still in the proving phase for many organizations.

In the view of so many IT pros, cloud computing "just ain't there yet." On the other hand, market research firm IDC is saying that spending on cloud computing services will represent more than $44B in IT spending within three years and will outpace spending on traditional IT solutions through 2015.

"The bottom line is people are scared. Companies have failed spectacularly at this model," said Brian Barnier, a member of the ISACA risk IT development team.

Although nearly half of the IT pros participating in the survey are not sold on cloud computing for mission critical data, Robert Stroud, who doubles as international VP at ISACA and head of the service management business unit at CA, Inc., says IT pros need to remember that "risk and value are two sides of the same coin.

"If cloud computing is treated as a major governance initiative involving a broad set of stakeholders, it has the potential to yield benefits that can equal or outweigh the risks," added Stroud.

In a related side note, many of the IT pros said employees put their company at risk levels that exceed the risk of using cloud computing services. Fifty percent of the respondents said their organization's employees do not protect confidential data appropriately, for example.

I think the cloud could do better than that.

Cloud Computing is Just in Time for SMBs

Small and medium-sized businesses, affectionately known as SMBs and historically relied on to help lead economies out of recessions or worse, are still smarting from the sting of this mother of global recessions. In fact, market research firm International Data Corp., affectionately known as IDC, issued a report this week revising its earlier forecast of a speedier recovery for SMBs.

"The downturn had a devastating impact on SMBs worldwide," said Ray Boggs, vp, Small/Medium Business and Home Office Research at IDC. "Moving forward, small businesses will not follow the past pattern and return to prerecession's spending levels more quickly than midsize firms. Instead, SMBs of all sizes will remain cautious with their IT spending over the next several years."

Ouch. Did Boggs just say "over the next several years"?

Since the full 25-page IDC report retails for $4,500, most of us will have to be satisfied with the report summary from the IDC press release announcing the report. Here are a few stats:
- SMB IT spending levels will not return to 2008 levels until 2011
- Spending on PCs and peripherals will see the biggest growth.
- Central and Eastern Europe, the Middle East and Africa will see the strongest spending growth.
- Together, North America, Western Europe and Japan account for 70% of worldwide IT spending by SMBs.

"To succeed, technology providers need to develop separate strategies that address the distinct needs of companies in each of these settings," Boggs added.

Almost on cue and on the heels of this report, enterprise IT providers -- who by their own admission have underserved the SMB IT market -- are courting SMBs with renewed urgency and tailor-made IT solutions, including the cloud-based variety.

In fact, cloud computing is strutting its stuff just in time for many SMBs who want to leverage the latest technology has to offer but without the big price tag. "For small businesses, cloud computing hits a particular sweet spot," Ziff Davis Media Networking & Small Business Analyst Samara Lynn reports. "With cloud services, small businesses reap the benefits of not having to deploy physical infrastructure ... a lot of today's small business needs can be fulfilled almost completely with cloud-based offerings."

Take 3Point Communications for example. We fit the small business profile and exploit the advantages of low-cost "anywhere, anytime" cloud-based solutions including: Gmail, Dimdim for live collaborative meetings and shared white boarding, Basecamp for project management, Ning for our corporate Intranet, Yammer as a our private Twitter-like platform and ooVoo for video conferencing.

SMBs are turning to cloud applications like these, and also to new office productivity cloud offerings, like the Business Productivity Online Suite from Microsoft. With BPOS, SMBs get access to email and calendering, file sharing, virtual meeting and messaging tools starting at $10 per user per month.

"There will be a cloud component to every product we offer," said Birger Steen, Microsofts VP for SMB.

SMBs aren't getting all of their IT challenges solved through the cloud. IBM and Microsoft, for example, will continue to offer in house IT solutions for small businesses and branch offices. And a number of SMBs will elect the hybrid approach, running some services online and others in house.

But with the IDC SMB IT spending report as a caution that the global recession still has its talons in the backs of many SMBs, it's a relief to this critical market segment that new IT pricing models that help keep costs down are here and are only going to improve.