2013 IT Outlook: Innovation Trumps Cost-Cutting

Network World — The economic recovery is moving at an unsteady pace, but the emphasis on cost-cutting that dominated IT agendas in recent years is sharing the spotlight with a more interesting imperative: innovation.

"In spite of pressure to decrease costs company-wide, we're significantly increasing our IT investment in 2013," says Michelle Kaufman, director of IT at Supplies Network, a St. Louis-based wholesaler of business supplies and services. "We're writing software to automate numerous processes throughout the company, which long-term will make us leaner and more efficient. We're investing in our managed print technology and in our B2B connectivity options, both of which drive revenue. We're investing in technology like VMware View and Microsoft Terminal Services to enable a remote workforce to meet the needs of the business regardless of location. All of these have long-term payoffs."

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Companies have always relied on IT to increase efficiencies, and for years IT leaders have talked about better aligning IT with business objectives to spur innovation. What's different today is the sense of urgency.

The global financial crisis, which knocked the stuffing out of IT spending, created pent-up demand for technology, and companies are still in catch-up mode. At the same time, the mainstreaming of new technologies, specifically cloud computing, is putting pressure on organizations to rethink their approach to IT.

"Cloud computing has accelerated the pace of change, undeniably," says Andi Mann, vice president of strategic solutions at CA Technologies. With the availability of cloud services, start-ups in industries such as retail, healthcare and media, for instance, can set up shop without making enormous capital investments in tech. "We've seen new competitors come into crowded markets and totally disrupt those markets, and they can do it on a dime because they don't have to buy infrastructure or set up a data center."

But it isn't just cloud computing. Other disruptive technologies at work include mobile computing, social media and tools such as virtualization that make IT more agile.

"These are changing the way that businesses are delivering new products and services to their customers," Mann says. "They can do it faster because of agile computing. They can do it at scale because of cloud. They can reach a richer, wider audience with social media. They can deliver products and services in entirely new ways, to entirely new audiences, using mobile."

IDC says worldwide IT spending in 2013 will exceed $2.1 trillion, up 5.7% from 2012. The biggest driver of that growth will be sales of smart mobile devices, including smartphones and tablets, which will grow by almost 20% in 2013. IDC is also forecasting healthy growth in global software and services spending.

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