Riding The Coming Wave Of Tech Industry Growth

The Palazzo Las Vegas - Resort Hotel Casino

Tech is back! Just as our in-house economist Andy Bartels predicted, the first quarter numbers from the big tech vendors confirm that IT investment is on a growth trajectory again. Check out the recent Q1 numbers from Intel and IBM, for example.

And these results represent more than just a rebound from the nasty 2008-09 recession. We forecast that the IT industry is entering a multi-year period of innovation and growth, when spending growth on technology goods and services will be a substantial multiple of overall GDP growth in the US and around the world. Check out Andy’s latest forecasts here.

For more on the opportunities and challenges that the next wave of tech industry growth will present to vendor strategists, join us in Las Vegas later this month at Forrester’s flagship event, the IT Forum. We will be presenting our latest research on Smart Computing, the Personal Cloud, and the approaches that vendor strategists must take to stay in front of “the next big thing.” Hope to see you there!

Welcome to the new Vendor Strategy blog!

Hello, fans of Vendor Strategy. Welcome to Forrester's new-look VS blog. We will be aggregating analyst posts across our entire Vendor Strategy research team here, so bookmark it and please come back often.

 

Here's how my colleague Cliff Condon summarized Forrester's move to a new blog platform:

 

Hey everyone.  Here it is – Forrester’s new blog network. We made some changes to improve the experience for readers and to encourage more analysts to blog. Feel free to poke around and let me know what you think.

There are a few things I’d like to point out to you:
 

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Talking ECEM market evolution with PwC

The market for enterprise carbon and energy management (ECEM) systems continues its rapid evolution. Since publishing our Market Overview report last November, we have interviewed at least a half-dozen additional systems providers coming into this nascent market.

Last week we talked with Dan DeKemper, a director at Pricewaterhouse Coopers who works with the firm's 800-person-strong sustainability practice on large-scale ECEM implementation projects. Dan told us that PwC sees three industry sectors driving ECEM adoption:

  • Utilities and Energy, the traditional "heavy emitter" industries that are focused on monitoring and reducing carbon emissions for regulatory compliance and public perception reasons.
  • Retail and CPG, two verticals where adoption is now growing faster than Energy. These companies are implementing ECEM on a voluntary basis, looking to improve brand equity and align with sustainability initiatives of some of their customers like Walmart.
  • Public sector organizations, looking to be role models for the private sector and also under executive or legislative mandate to improve energy efficiency.
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Regulation won't drive Green IT adoption

Were your hopes for growing adoption of green IT dashed by the non-agreement at COP 15 in Copenhagen? Are you dismayed by the weak prospects for cap-and-trade legislation in the US during 2010? Forrester's latest Green IT survey results give us some reason for optimism -- it turns out that regulatory compliance is a weak motivation for companies' pursuit of more sustainable computing operations.

When we asked IT practitioners at 600 enterprises around the world about their top motivations for pursuing green IT operations, regulatory compliance was the 7th-most frequently cited reason, with just 16% of respondents. What's at the top? Cost and cost. Reducing energy expenses (66%) and reducing other IT operating expenses (42%) have been the strongest drivers for green IT since we began our survey work on this topic in 2007. See the full survey results in our latest Green IT Market Overview report, here.

So fear not, even in the absence of significant regulatory or policy moves this year, good old-fashioned business motivators like profitability and customer demand will continue to push companies to adopt more sustainable processes and practices -- in their IT organization and beyond.

The Implications of a Disappearing IT Industry

Christopher Mines [Posted by Christopher Mines]

Last month I had the pleasure of keynoting the "International IT Convergence Conference" in Seoul, sponsored by the Korean Ministry of Knowledge Economy. It was a fascinating combination of academic conference, government policy discussion, and technology trade show. And also my first opportunity to visit Korea.

The theme of the conference, and topic of the panel discussion I participated in, was "IT convergence." Convergence means many things to different people; in this case, convergence means the collision or combination of information technology and other industries, i.e., embedding IT capabilities in transportation, healthcare, construction, and etc. The case was well-argued by a number of speakers, and the example stories were compelling: phones becoming pocket computers, ships becoming floating computers, buildings becoming hi-rise computers, and the like. And we didn't have to stretch too far to imagine that big parts of the IT industry itself will eventually be subsumed into these other industries, becoming as important and ubiquitous -- and invisible -- as, say, electric motors.

Big opportunities for IT hardware, software, and services. But I felt it important to point out that such embedding or tailoring of IT systems into industrial and consumer systems will come with risks and challenges for IT suppliers, including:

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How Tech Vendors Should Approach Green IT

Christopher Mines [Posted by Christopher Mines]

My colleague Doug Washburn and I did a Forrester Webinar yesterday for tech vendor clients & prospects. We closed with 6 takeaways for tech vendors seeking to capitalize on the mega-trend of sustainability adoption by their corporate customers:

  1. Corporate sustainability is here to stay; green IT is not a fad or a fashion.
  2. Energy efficiency is important for all IT assets, not just the data center.

  3. Enterprises implementing green IT need process change and consulting support, not just new hardware and software.

  4. Vendors must market their green solutions with a holistic vision and a tactical implementation path.
  5. Green IT has many customer stakeholders, each with a different view of its priority and benefits. VEndors must be multi-lingual in developing conversations with these stakeholders.

  6. Be clear about the cost-benefit arithmetic. Help customers build their business case with ROI numbers that are clear, simple, and complete.

To paraphrase JFK...

Christopher Mines [Posted by Christopher Mines]

"Don't ask what green can do for IT; ask what IT can do for green."

That's our manifesto for vendors as they survey the opportunity landscape created by the increasing importance of sustainability in corporate strategy and branding.

See our summary and map of the "IT for green" opportunity landscape here.

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A trip back to the future...of green IT

Christopher Mines [Posted by Christopher Mines]

I had the privilege of hosting the Green IT 2009 conference in London back in May and wanted to share a couple of observations about that terrific event. I often tell clients in the U.S. that I am taking "a trip to the future" when I go to Europe; in particular, UK public sector organizations are probably the most advanced anywhere in terms of green IT behaviors (or should I say behaviours?).

Two statements I heard from IT procurement people at the conference that should be on the radar screen for vendor strategists looking to anticipate the next wave of enterprises' green requirements, and for IT planners looking to get more aggressive about their company's green IT initiatives:

  • Requirements for longer-lifecycle IT equipment. Planned obsolence is going to become obsolete. Expect your customers to require longer warranty periods, modular/upgradeable designs, and lifecycle-based carbon footprint analysis from you and your gear. Companies are realizing that, as one conference attendee put it, "we puts lots of bodies in motion" when they order new equipment.
  • Increasing demand for green/renewable energy. No matter how efficient a data center is, it can't really be green unless it's powered by green energy.

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Green Sigma coalition: a dream team of vendors for sustainability solutions

Christopher Mines [Posted by Christopher Mines]

At its green summit event last week, IBM brought together a powerful collection of vendor partners to address customers' sustainability challenges and opportunities. The Green Sigma Coalition is notably different from other vendor partnerships in the green IT space, for three reasons:

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Is cloud computing green?