by Mike Altendorf

Nobody say ‘green shoots…’

Apr 29, 20095 mins
GovernmentIT LeadershipMedia and Entertainment Industry

You might think of this as the year of doom and gloom for IT suppliers, a period of lying low, scratching a living and surviving on the licence and maintenance revenue from the glory days – and you might still be right. However, and whisper it for now, I’m beginning to feel a little bit more confident about IT spending in 2009. I’m still not saying it will be a fantastic year for investing in technology but the signs are that activity is picking up. Every pound will have to be sorely earned but this is also a market that sorts the wheat from the chaff. In short, I’m hopeful things are not all that bad on the supply-side of the business. That said, it’s a weird market out there, and one I’ve never seen the like of in 20-something years working in IT. Clients are cutting back in terms of people and IT expenditure and yet there’s still huge interest in carrying on with projects. You’ve got redundancies everywhere but there are also deals being done, albeit with buyers demanding very clear returns on investment within a year and suppliers being asked for shorter engagements with sharp cut-offs. If I had a quid for every CIO who has told me “we’re cutting the number of projects in our portfolio but we’re going ahead with some on these specific terms”, I’d be at the races now. It’s still slightly surprising to me but there are lots of opportunities and many of them are to do with a few areas, namely CRM, collaboration, governance risk and compliance (GRC), and cloud computing. In CRM, a lot of people have either just got Siebel to work after 10 years of trying or they’re demanding simpler CRM that doesn’t require an army of system integrators. There’s still a willingness to put CRM systems in to pursue superior customer retention and service, however, and the shoot-out we’re often observing is between Microsoft CRM – which is now getting some traction after a slow-ish start – and In terms of collaboration, we’re seeing a big interest in platforms for team-working, project management, sharing and so on, and a pronounced emphasis on social networking. Companies are trying to learn from their younger workers and they want to interact a lot more with blogs, wikis, instant messaging, portals and the simpler forms of document management. This approach has a couple of advantages beyond appealing to youth, of course: it’s also relatively cheap and quick to get up and running. The appeal of GRC, given what’s just happened to the global economy, might be harder to fathom. It may seem a case of shutting the barn door after the horse has bolted but banks are investing heavily in governance, risk and compliance solutions and this is going to be a massive focus for us as a company. I think there’s a simpler approach to GRC to be taken than the traditional way of heavyweight solutions. You can still expect the GRC space to be filled to bursting with the familiar names, however, from HP, Capgemini, Accenture, IBM, Oracle and the rest. One other clue to the action: many consultants are being moved back from retail and other cooling areas towards GRC and government work. The other area that is warming up nicely is cloud computing. Just in case there are any awards for being ahead of the game (if indeed I am ahead of the game in this case) let me remind you what I wrote on the subject back in November: “It’s a very interesting area and firms not only want to save costs but also want that agility to spin up and configure projects very quickly. We researched our customers and were surprised to find that half of them have already tried the most established cloud computing model,’s EC2. Even more interesting was that not one of them said they were disappointed and all said they would use it more seriously in the next six months – and not just in test-bed environments.” OK, so maybe it was our customers who had the foresight and I was just reporting back from the field but still, the cloud model is really happening. What’s emerging is that rather than for transactional scenarios, say, people are seeing, firstly, virtualisation of datacentre hardware, and then, core applications such as intranet, email and portal-type activities being pulled into the cloud. Another thing that is being fed back to me by buyers, if you’ll forgive me straying from my technology beat, is to do with licensing. One CIO to whom I spoke expressed a view that is becoming typical. He gathered together all his application software vendors and said he wants to change to per-user, per-year terms so that he can shrink or grow his business and pay for software accordingly. That’s a request that in the past might have received a dusty answer from the dominant incumbents of enterprise software but these are different times. Still, there are those glimmers to cheer us up.