Changing IT landscape presents new business continuity challenges

A Gartner report has highlighted five issues which are leading a paradigm shift in the way that organisations use and manage IT. Gartner believes that voice/data convergence; service-oriented architecture; IT utility; global sourcing; and the growth of open-source software are all combining to create a new approach to information technology.

"These five trends represent inevitable and irrevocable shifts in the information technology landscape," says David W. Cearley, a Gartner Research vice president. "In the face of such shifts IT decision-makers must ask — 'When do I have to face up to this, or end up left behind?'”. The same applies to business continuity managers, for where information technology leads, business continuity must follow. These five issues are all areas which BCMs must be fully aware of.

Mr. Cearley is a co-author of the report, ‘Gartner's Positions on the Five Hottest IT Topics and Trends in 2005’. Other authors are Jackie Fenn, Gartner Fellow and vice president, and Daryl Plummer, Chief Gartner Fellow and group vice president. All three are specialists on emerging business and technology trends and how these trends shape the way individuals and companies derive value from technology.

An overview of the authors' analyses follows:

Voice/data convergence
IP Telephony and VoIP, new communications technologies made possible by the Internet, will drive voice/data convergence activity in more than 95 percent of major companies by 2010. This will lead to new classes of business applications, and cause the greatest upheaval in the telecommunications industry since its founding. Also by 2010, 40 percent of companies will have integrated their entire voice and data networks into a single network, and more than 95 percent of large and midsize companies will have at least started the process.

By 2009, half of the Tier 1 network service providers will have merged or been acquired. Through 2010, price decreases of 15 percent per year for data services, and 7-to-15 percent for voice services, can be expected. However, traffic growth of 30-to-60 percent means network budgets will grow 5-to-10 percent per year.

Service-oriented architecture
Developers will shift their focus to business processes and away from software functionality. In turn, software will become a facilitator of rapid business change, not an inhibitor. The value creation in software will shift to subscription services and away from packaged software, and to composite applications (i.e., best of breed) and away from monolithic suites.

By 2006, more than 60 percent of the $527 billion market for IT professional services will be based on Web services standards and technology. By 2008, 80 percent of software development projects will be based on SOA. The distinction between software integrators and vendors will blur as packaged applications are broken apart and delivered as service-oriented business applications.

Open-source software
OSS will not destroy industry giants, such as IBM and Microsoft, but it will revolutionise software markets by moving revenue streams from license fees to services and support. In doing so, it will be a catalyst that restructures the industry. OSS refers to software whose code is open and can be extended and freely distributed. In contrast to proprietary software, it allows for collaborative development, and a continuous cycle of development, review and testing.

By 2008 95 percent of Global 2000 organisations will have formal open-source acquisition and management strategies; and, OSS applications will directly compete with closed-source products in every software infrastructure market. By 2010, IT organisations in Global 2000 companies will consider open-source products in 80 percent of their infrastructure-focused software investments and 25 percent of their business software investments.

IT utility
This mode of computing, based on real-time infrastructure (RTI) architecture, enables companies to increase their flexibility in delivering IT business services. Instead of having to dedicate resources to specific roles and processes, companies can rely more on ‘pools’ of multifaceted resources.

The resulting improvements in efficiency will enable large organisations to reduce IT hardware costs 10-to-30 percent, and labour costs 30-to-60 percent, as service quality improves and agility increases. By 2010 large companies typically will fulfil 25 percent of application demands from shared, rather than dedicated, sources, and 30 percent of their software will be delivered by external pay-as-you-go providers.

Global sourcing
Global sourcing is an irreversible trend in delivery models, not a cyclical shift. Its potential benefits and risks require enterprise leaders to examine what roles and functions in a given business model can be delivered or distributed remotely, whether from nearby or across the globe. The political, economic and social ramifications of increased global sourcing will be enormous.

By 2015, 30 percent of traditional professional IT services jobs will be delivered by people based in emerging markets. India will continue to play a significant role, but by 2008, the most likely sources of additional labour will include China, Russia and Brazil. Labour rates for application services in India will rise 40-to-60 percent by 2008 from the levels of 2004.

www.gartner.com

•Date: 8th June 2005 • Region: US/World • Type: Article •Topic: IT continuity
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