Analysis

Predictions 2014: How CIOs plan to spend their 2014 IT budget

Computer Weekly
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With the economy picking up, Computer Weekly asked CIOs and IT experts what they believe will be the biggest areas of IT investment in 2014, and how different industries will be spending their IT budgets.

Analyst Forrester predicted that software, IT consulting and systems integration services will have the fastest growth in 2014. Forrester expects purchases of software by business and government to grow by 7.8% in 2014 and 11.4% in 2015.

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Experts believe there will be a shift in power from software providers to IT purchasers and the IT department.

Martin Thompson, chair of the campaign for clear licensing, said: "2014 is the year the enterprise will bite back, the year enterprises begin to claw back control from overbearing software publishers and sloppy licensing and audit practice."

Technology in 2014

There is a lot of hype around the internet of things (IoT), and the hype is set to continue in 2014. 

Gartner research director Errol Rasit predicted that CIOs will need to address the IoT in their datacentre strategy and capacity planning. 

Future technology trends

  1. Drones in the sky to become mainstream. Delivery of goods by drones
  2. Virtual reality to become mainstream with Oculus Rift
  3. Electric and driverless cars to take off
  4. Smell communication by computer
  5. Humans will increasingly fall in love with virtual characters
  6. Stock trading will become crowd sourced, with the ability to follow thousands of traders in real time and copy their trades in real time based on performance
  7. Brain project in the US will map the human brain to allow new breakthroughs such as neural implants
  8. 3D printing will become mainstream in the workplace and at home
  9. Jet pack transportation will enter the market
  10. Every kid will be able to build their own electronics

Source: Adrian David Cheok, professor of pervasive computing at City University London

"We will start to see more devices being connected to each other, typically via a datacentre, to improve the automation and intelligence of everyday objects. This is something CIOs need to take into account in their strategic planning this year,” said Rasit. 

This will involve evaluating how the traditional infrastructure of buildings, roads and smarter cities will affect their business and the datacentre environment they need to build for the future.

Cloud computing is set to gain momentum. The TechTarget 2014 Buying Intentions survey of 770 IT professionals in Europe found that 25% of those asked will be building a private cloud this year, while 22% plan to use an external cloud provider. With more applications being delivered via the cloud, there is set to be an explosion of software as a service (SaaS) providers.

Rory Canavan, a software asset management specialist, said: "I believe the SaaS market will go through a cycle of maturity, at which point certain providers at the bottom end of the performance and value for money ladder will be forced out of business."

A further risk could occur as more companies develop new SaaS offerings based on existing commercial software products. "They may not go through the due diligence of checking with software suppliers that they can offer the product as a cloud service and will be forced out of business," he said. 

Canavan urged CIOs to put in place contingencies to ensure that data is accessible in some manner, even if the cloud provider goes into administration.

2014 is the year when enterprises will begin to claw back control from overbearing software publishers and sloppy licensing and audit practice

Martin Thompson, Campaign for clear licensing

Beyond cloud applications, enterprise software in general is set to catch up with IT consumerisation. 

Mark Ridley, director of technology at recruitment site Reed.co.uk, predicted that enterprise software providers will revamp the user interface on their applications. 

"I expect to see beautiful enterprise software, where the big players will start to catch up with consumer software, realising the importance of [a good] user experience," he said.

The rise in mobile malware could lead to further investment in securing mobile devices. "Mobile malware will rapidly grow in sophistication and ubiquity in 2014," said Art Coviello, executive chairman of RSA, the security division of EMC.

Industry challenges in 2014

In the retail market, Chris Webster, head of retail consulting and technology at Capgemini, expects retailers to re-engineer their linear supply chain and advanced planning systems to support multi-channel retail

While merchandise may have previously moved in bulk from a distribution centre to a store, he said customers are buying more through digital channels. 

"Click and collect is growing very rapidly, and third-party lockers offer great convenience to customers. Retailers will need to have flexible systems to redirect the supply chain and orchestrate orders," said Webster.

The banking sector is set for major changes, according to one banking CIO. He expects regulators to put an end to global banks, to avoid another banking crisis. 

"The regulators are now regionalising the banks to reduce global interdependency and prevent a glitch in one country affecting other economies. The day of the true global bank is over, as governments, regulators and the public have had enough of problems caused elsewhere affecting them. Lehman was a good example of the global impact," said the CIO.

The growing use of mobile payments, where mobile banking and retail apps are linked to personal credit card details, has led to a notable surge in mobile threats, said Rik Ferguson, global vice-president of security research at Trend Micro

"Fake banking apps became a common problem in 2013, and legitimate banking apps became a favoured cyber criminal target," he said.

"Going mobile renders traditional two-step verification methods insufficient for securing financial transactions. As more people use mobile devices for both banking and authentication, cyber criminals have started intercepting authentication codes provided by banking institutions to enable two-factor authentication."

In local government, the Society for IT Managers (Socitm) predicted that local government will increasingly use agile methodologies in IT projects, and look for suppliers that offer modular products rather than all-encompassing and complex frameworks. Data and analytics will be key drivers in local government this coming year.

Before we can pick up on big data, data quality and data cleansing is needed

Chris Head, Socitm

"We are seeing a shift from technology to data," said Chris Head, principal associate at Socitm Insight. "IT is no longer about making sure hardware is up 99.995% of the time." 

In the public sector, he said, there were hundreds of business processes, where each one had its own set of data, often in incompatible formats. "Sometimes data quality is not good. Before we can pick up on big data, data quality and data cleansing is needed," said Head.

He said the public sector was still not sharing enough data, in spite of the recommendations of the Laming report following on from the 2003 enquiry into the death of Victoria Climbie.

"There isn’t a single version of the truth across organisations. Sharing information is difficult – people hide behind the Data Protection Act,” said Head.

Taking this prediction of the shift in local government’s IT’s focus from technology to data, CIO for Hampshire County Council, Jos Creese, wrote on his blog: "The value of ‘corporate IT’ will actually begin to grow again, but only if it’s ‘responsive’ to changing business needs and a ‘door opener’, not a ‘gatekeeper’."


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