IT budgets will grow next year but areunlikely to return to the double-digit rates of the early
years of the 21st century, according
toIain Stephen, director of enterprise servers and
storagefor
Hewlett-Packard (HP) UK and
Ireland.
His words were echoed by
Microsoft CEO Steve Ballmer, who told Korean IT executives:
"While we will see growth, we will not see recovery."
Iain Stephen said enterprises have reacted to the recession in
one of three ways. "Forty percent have got very conservative with
their budgeting because they are uncertain about future economic
growth, 40% are still trying to optimise their IT estate, for
example by virtualising their desktops, and 20% are doing
dramatically innovative stuff," he said.
Firms managing just to keep the lights on risked being
unprepared for growth or for competition from unexpected sources.
This was good news for HP's financing arm, as it gave corporate
treasurers another source of finance for already-strapped budgets
to respond quickly to market changes, he said.
Stephen said most IT products were now commodity items or based
on open source or open technologies. Competitive edge now came from
how one put together such items and applied them to business
problems, he said.
He foresaw a time when there would be just a few main suppliers
to enterprises. These could end up being HP, IBM, Cisco, and
Google, with Oracle the wild card, he said. They would cater to
firms of all sizes, and large enterprises would pick and choose
from their product and service menus.
These firms would also supply those mid-market firms that still
felt there was value in owning their own IT estate. But smaller
firms were likely to turn increasingly to cloud-based services for
applications and storage, which they would access via cheap
commodity-class devices, he said.
However the physical side of the industry turned out,
enterprises still needed better information, innovation capability,
and elasticity if they were to win the battle against an
unpredictable economic climate, and more competitive environment
and fast-changing technology, said Stephen.
This made services a competitive differentiator, he said,
referring to HP's acquisition of EDS. All large enterprises had
legacy systems. They had to manage that legacy and see how they
could move it to new technology that was cheaper to own and better
at doing what they needed it to do. That required IT expertise to
understand the start and end of such moves and expose the gaps to
cross, he said.