Aberdeen: sustainable growth
Agreeing with other main-line market analysts, Aberdeen expects that 2003 will see modest growth. Based on global economic trends, various surveys and the financial results of vendors, Aberdeen predicts that worldwide spending on information technology will grow 4 percent this year, as opposed to the 1 percent growth seen last year. (Its prediction for the U.S. market is for 3.6 percent growth - slightly less than the global rate, in other words.)
Aberdeen indicated that information spending has actually been recovering since the third quarter of 2001. However, don't expect that the recovery will accelerate until the double-digit growth rates experienced in the late 1990s return, the firm warned. Instead, there will be 'sustainable' growth rates of 4 or 5 percent annually through 2006. (But Aberdeen also thinks that the rate will rise to a slightly higher level in the U.S. market, to 5 or 6 percent.)
Gone are the days, the firm warned, when growth rates for the information technology market can surge well ahead of overall economic growth rates. Nor do the users currently have any reason to upgrade their systems every three years.
Security is hot
But there will still be some hot areas, and the one implication of Aberdeen's predictions is that the security area - plus related fields like anti-spam software - will be hot. On office networks, 25 percent of the e-mail that showed up during 2002 was spam, as the segment of the population that formerly got involved in fraudulent envelope stuffing schemes is now involved in shady Internet mass e-mail marketing schemes. This year, 50 percent of the e-mail is spam, and it has reached 80 percent for consumer ISP users.
Beyond that, there is the unresolved issue of identity theft (i.e., getting credit cards in someone else's name, buying things with the cards, and never making payments.) Aberdeen figures that identity thefts caused damages totaling $8.7 billion among the three types of victims of such scams: the consumers, the merchants, and the credit card companies. This year the total could nearly triple to $24 billion, it warned.
Linux
Another hot spot should be Linux and the enterprise, the firm predicted. Last year saw a 50 percent growth for enterprise Linux servers, and this year the rate should still be 40 percent, Aberdeen said. And while it is widely assumed that the growth of Linux is at the expense of Microsoft, Aberdeen said that Linux enterprise growth actually cuts into the RISC and Unix market. This means that Sun will be have more problems from Linux than Microsoft. However, Aberdeen cautioned that there are few CRM and ERP applications for Linux.
Outsourcing big in 2003
Aberdeen also predicted that outsourcing will be big during 2003, as corporations seek to cut their technology budgets by, basically, paying outsiders to do certain chores. The outsiders will also be able to offer 'business process transformation' by supplying turn-key solutions. (On the other hand, those who have been around may have noticed that the idea of outsourcing catches on from time to time, and then fades way. The idea looks good at first, and then the customers discover that the outsourcing vendors have to make a profit, too, and may do so by piling on charges for services over and above those listed in the original contract.)
Other predictions
In the storage arena, Aberdeen predicts a long-term 're-architecting' of data centers, involving storage automation for resource pooling, provisioning, and policy-driven management. Management will begin to realize that their corporate data (which their business is based on) resides on the storage units, and so storage will finally gain the same management attention long enjoyed by processors and communications.
In the telecom market (whose vendors have experienced catastrophic financial results due to over-capacity and non-existent profit margins) there will not be any growth, but at least there should be stability. Therefore, the vendors should be able to start making rational plans for the future, the firm predicted. One bright spot will be WiFi service to homes. On the other hand, Aberdeen did not see how the investments being made to put WiFi 'hot spots' in many public places can be economically viable.
Supply chain applications will spread, as corporations that do business with each other (i.e., are members of a supply chain) share selected data. Finally, Microsoft will make a big splash in the CRM field thanks to its new .NET programming environment.
Meanwhile, keep in mind that the analysts at the Aberdeen Group are mortal and can't really foretell the future. We can't be sure about their accuracy until next year - and then it will be too late.
Lamont Wood