December 16th, 2006
This is prediction season and Gartner – which holds one of the top spots in the prediction business – has passed along the company’s key expectations. I include these predictions verbatim from Gartner and follow each with a short comment from yours truly.
1. Through 2009, market share for the top 10 IT outsourcers will decline to 40.0 percent (from 43.5 percent now), equaling a revenue shift of $5.4 billion. As market share declines, some key outsourcing vendors will cease to exist in their current named form. The reduced number of large contracts, increased amount of competition and reduction in contract sizes have placed great pressure on outsourcers, which will have to “sink or swim” based on support for selective outsourcing and disciplined multisourcing competencies.
Lundquist: True that the big outsourcers’ share will decline, but false that outsourcing will decline. I think you will continue to see a rise of small, nimble outsourcing firms that use the Web to deliver applications faster than you can say, “Charge it on my credit card.”
2. Only one Asia/Pacific-based service provider will make the global Top 20 through 2010. The number of global players in consulting that come from Asia is relatively small. This will limit the ability of the Asian juggernaut to grow revenue streams rapidly and become global leaders.
Lundquist: Top 20 service providers? This will depend on the government regulatory environment as much as on technology. If the government clearances were in place, an Asian company could quickly acquire its way to the top tier.
3. Blogging and community contributors will peak in the first half of 2007. Given the trend in the average [active posting] span of a blogger and the current growth rate of blogs, there are already more than 200 million ex-bloggers. Consequently, the peak number of bloggers will be around 100 million at some point in the first half of 2007.
Lundquist: Couldn’t happen soon enough. Too many blogs all talking about the same thing. An army of zombie bloggers wandering the Internet by 2007’s end. What do ex-bloggers become? Probably the next generation of video bloggers.
4. By 2009, CSR (corporate social responsibility) will be a higher board- and executive-level priority than regulatory compliance. Regulation has become a key issue for government and the corporate world, with the aim of ensuring more-responsible behavior. However, the need for companies to be socially responsible to their employees, customers and shareholders is growing as well. The future will see corporate boards and executives make this social dynamic a more-critical priority.
Lundquist: Well, wouldn’t that be nice. However, regulatory compliance is a big stick and corporate social responsibility is a nice warm feeling. I don’t think this will happen without a stick somewhere.
5. By the end of 2007, 75 percent of enterprises will be infected with undetected, financially motivated, targeted malware that evaded their traditional perimeter and host defenses. The threat environment is changingÃ¢â‚¬â€financially motivated, targeted attacks are increasing, and automated malware-generation kits allow simple creation of thousands of variants quicklyÃ¢â‚¬â€but our security processes and technologies haven’t kept up.
Lundquist: Good news, as I think it is more than 75 percent now. All it takes is money and motivation to stop the bad guys, and as companies bear more costs for lost data the motivation will be in high gear. There are strong efforts under way right now to find new ways of defeating the bad bugs, and I think the fruits of that research will be seen in 2007. The service providers and hosted services have a role to play here.
December 14, 2006
Entry Filed under: Why Outsource?