Key trends influencing the IT sector

Yesterday at Equinox’s company planning day I was asked to present the key trends that are strongly influencing the IT sector in New Zealand and internationally at the moment. In addition to being a Principle Consultant at Equinox, I'm also the company’s Chief Technology Officer - so it's important for me to keep my finger on the pulse of the changes in our sector.

This blog post summarises the key trends that I presented. It is important to note that I pulled together this information from numerous sources including, Steven Prentice of Gartner who recently presented to Equinox Management and the Equinox Board when he was in New Zealand as part of the Gartner Predicts 2011 sessions.

The IT Environment

The IT environment we operate in is influencing the other trends that we are seeing in the IT sector:

• New Zealand may be in a jobless recovery (economic growth without reducing unemployment) – similar to that being experienced by the US. See here for more information from the Department of Labour that tends to support this view (albeit last year).
• Public and private sector are more aggressively managing costs – e.g. a stronger focus on input costs, staff freezes, and increased transparency of IT costs.
• Globally Gartner sees a move to approvals of projects with quantifiable productivity benefits vs. previous soft or intangible benefits.
• Some IT roles have become or are becoming commoditised (i.e. the market treats resources in these roles as being the same and the only basis for selecting one resource over another is by price / salary expectations).
• Consolidation by public and private sector including shared IT procurement across organisations, all of Government IT initiatives, amalgamation of government agencies, stronger focus on the use of internal resources.

IT Industrialisation

The IT industry is evolving from craftsmanship to an industrialised model - our challenge is delivering cost reductions and competitive advantage.

• Gartner predict “by 2015, tools and automation will eliminate 25% of labour hours associated with IT services”.
• An increased focus on improved predictability of IT project results - reduced variability in IT cost and quality, and automated provision and delivery of (likely cloud-centric) IT services.
• Adoption of visualisation tools to visually capture and model software requirements and screen designs.
• Adoption of Application Lifecycle Management (ALM) tools, such as Microsoft Team Foundation Server / Visual Studio and HP ALM, to help automate and manage the application development and management processes.
• Business Intelligence (BI) remains relevant for 2011, though not with the same attention as with recent years.

Cloud Computing

It is likely that you will have already heard much of the hype and discussion around the cloud. One popular vision of the cloud sees organisations using external server processing and storage services accessed via the internet on a pay-as-you-go model, rather than making large upfront investment in purchasing and then maintaining their own servers.

• IT organisations internationally are investing heavily in the cloud and in the changes that the cloud brings - for example Microsoft’s CEO Steve Ballmer statement that Microsoft is ‘all in’ when it comes to cloud computing.
• Many New Zealand vendors are also investing, as evidenced locally through increased spend on datacenters by hosting providers in support of cloud-centric opportunities.
• Continued growth in Software as a Service (Saas), where software applications are delivered as a subscription service over the Internet.
• Emergence of convincing Platform as a Service (PaaS), which offers an integrated environment to design, develop, test, deploy and support custom applications. Examples include Microsoft Azure and Force.com.
• Virtualisation continues to be a significant route to cloud-computing by turning datacentres into a utility services that provide virtual computing and storage services.
• New Zealand Legislation appears to be trailing behind the technology advancements in cloud computing.

 Change Abounds

There are numerous predictions of an increased presence of personally-owned devices within the work place - notably tablets and smartphones. I see this reality in my day-to-day internal operations role as we move to embrace it.    

I think it is fitting to end this blog post with Steven Prentice's prediction that innovation in IT will primarily come from increased social use of existing technologies, rather than new technologies in themselves.