Following on from recent blogs, publications and presentation on the Government’s IT strategy I have been asked a number of times what my thoughts are on how this will play out in the IT industry over the next ten years.
A very interesting question and a difficult one to answer, when you are looking out ten years, but here are a few thoughts.
I think we are all in for a shock, a big shock because IT and service provision will be dramatically different and I’m not convinced the IT industry is facing up to the new reality.
Consider a world where:
· The concept of desktop disappears as a predominant model, as most people are either using a mobile device connected into a cloud or an ultra thin client device at the desk (wherever that might be). So little revenue & margin from the hardware, the standard software, the design etc.· Payment comes from infrastructure as a service as well as software as a service. If you have something that people want, the quality is good, the availability is good and the price is right you might get some business. If you don’t you don’t get the business.
· Things like ERP become a sequence of transactions. You buy the transaction not the ERP; you can construct these transactions to form your own ERP or process. It’s online self selection and configuration. It’s predominantly open standards based, lots of people can play. Gone are the days of big software licences, big rollouts. There will always be some but you have to question the old, or is it current SI model, where they develop a repeatable rollout model for an ERP, yet the client pays as if there is no retained learning.
· The number of data centres will be dramatically reduced. The Green IT agenda, the utilitarian nature of computing, the cloud or G-cloud concept all leads you to less being more. Dramatically optimised to maximise the compute, storage capacity and security capability for the lowest economic and environmental cost. So not a lot of people who can truly operate in that complex market and make a positive margin. Maybe the players you think who do data centres today won’t be the ones who do them in the future? Maybe the players of the future are more engineering based; understand physics, electricity and how to sweat the asset. Now there is a term that I don’t hear suppliers talking much about today... they will in future
· Public and private clouds will be pervasive. We will have cracked the software provisioning, cloud-to-cloud migration, dynamic application and data shifting (and data locked to a location), the prioritisation and the billing. The Application Store approach will also be the norm. So no more getting the client to pay for you to build customised code and then you selling it to other clients. The code is built, the client publishes it and they take any revenue for other use, not the software developer, consultancy firm, SI etc.
· The combined cloud model and the application store opens up the IT market. Now SME’s don’t have to worry so much about infrastructure, security, provisioning. They have avenues to publish their software, deal directly with clients, not through larger partners. They can get access from the application store if open source, to other products that enable them to enrich their offerings. The SME’s no longer have to rely on the crumbs off the table, as size (honest) won’t matter as much. What will play out will be a battle of product; intellectual property; agility to solve the business problem at speed and at a price that is much lower than the value that is being created. More players in the market resets where the revenue will go. More competition equals lower margin. Lower margin plus a high cost base is not a recipe for long term success.
So those operating on the IT world will need to decide what their true competences will be. Where can they shine and get recognition for being outstanding.
I’m in the IT industry, IT functions are in the IT industry, and CIO’s are in the IT industry. It isn’t just suppliers who will be impacted. We all will be. Are we prepared?