Virtual, Mobile, Social Endeavors Drive IT in 2011

Caution still pervades the economic forecasts, but it's not deterring IT executives from aggressively expanding their virtualization efforts, extending mobility initiatives, and tackling newer priorities such as cloud computing and enterprise social media adoption.

By Ann Bednarz
Mon, January 03, 2011

Network World — Caution still pervades the economic forecasts, but it's not deterring IT executives from aggressively expanding their virtualization efforts, extending mobility initiatives, and tackling newer priorities such as cloud computing and enterprise social media adoption.

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"If it's out there and if it can help us, we're looking at it," says Ron Smith, director of IT at logistics provider Transplace, which plans to upgrade to 10G Ethernet, overhaul its intrusion-prevention systems, and invest in cutting-edge storage gear, among other 2011 IT projects. "We're thrifty in the way we spend our money, but we go after the best."

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Capital budgets came back strong in 2010, and the U.S. tech sector grew about twice as fast as the overall U.S. economy, says Andrew Bartels, vice president and principal analyst at Forrester Research. "In 2009, companies hoarded cash. In 2010, profits were surprisingly strong. So in many cases, companies were actually sitting on excess capital. One of the ways they deployed that capital was to acquire equipment and software."

While the budget-slashing of 2008 and 2009 has given way to more stable IT spending - projected to rise 7.4% in 2011, according to Forrester -- buyers are still behaving prudently given the global economic environment. "We are in a recovery, but it's a very weak recovery. It's going to be a slow slog," Bartels says.

IDC is slightly less bullish on the 2011 outlook, predicting worldwide IT spending will grow 5.7% to reach $1.6 trillion. "Overall growth is still lagging behind pre-recession levels, but the recovery of 2010 will broadly continue and the industry will ultimately outpace the rest of the economy," IDC concludes.

Both firms agree a rebound in software and services spending will drive 2011 gains while hardware spending - the primary driver of 2010 gains, thanks to overdue equipment and infrastructure upgrades - will slow.

R-E-S-P-E-C-T

As we enter 2011 it is clear we're at an interesting juncture in IT, with new business demands and a raft of new technical opportunities stretching out before us. In fact, some say there has never been a better time to be in IT.

Trends such as cloud computing, social computing and mobility have the potential to dramatically improve efficiencies - without breaking the bank, says Mark White, a principal at Deloitte Consulting. "The CIO now can become a source of continuing innovation and value as opposed to saying 'fund me for three years and after 36 months I'll give you something good'."

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