Cloudgazing: What Does the Rebound Have in Store for IT?

Let’s hone in on some predictions for IT industry growth and impact, now that the recession appears to have bottomed out. We’re going to ask our distinguished panel of analysts and experts for their top predictions for IT growth through 2010 and beyond.

To help us gaze into the IT trends crystal ball we are joined by our panel: Jim Kobielus, senior analyst at Forrester Research; Joe McKendrick, independent analyst and prolific blogger; Tony Baer, senior analyst at Ovum; Brad Shimmin, principal analyst at Current Analysis; Dave Linthicum, CEO of Blue Mountain Labs; Dave Lounsbury, vice president of collaboration services at The Open Group; Jason Bloomberg, managing partner at ZapThink, and JP Morgenthal, independent analyst and IT consultant. The discussion is moderator Dana Gardner, principal analyst at Interarbor Solutions.

Listen to the podcast (57:00 minutes).

Here are some excerpts:

Brad Shimmin: Mine are geared toward collaboration and conferencing. The first and most obvious is that clouds are going to become less cloudy. Vendors, particularly those in the collaboration space, are going to start to deliver solutions that are actually a blend of both cloud and on-premise.

We’ve seen Cisco take this approach already with front-ending some Web conferencing to off-load bandwidth requirements at the edge and to speed internal communications. IBM, at least technically, is poised do the same with Foundations, their appliances line, and LotusLive their cloud-based solution.

With vendors like these that are going to be pulling hybrid, premise/cloud, and appliance/service offerings, it’s going to really let companies, particularly those in the small and medium business (SMB) space, work around IT constraints without sacrificing the control and ownership of key processes and data, which in my mind is the key, and has been one of the limiting factors of cloud this year.

Number two: I have “software licensing looks like you.” As with the housing market, it’s really a buyer’s market right now for software. It’s being reflected in how vendors are approaching selling their software. Customers have the power to demand software pricing that better reflects their needs, whether it’s servers or users.

So, taking cues from both the cloud and the open source licensing vendors out there, we will see some traditional software manufacturers really set up a “pick your poison” buffet. You can have purchase options that are like monthly or yearly subscriptions or flat perpetual licenses that are based on per seat, per server, per CPU, per request, per processor, or per value unit, with a shout out at IBM there — or any of the above.

You put those together in a way that is most beneficial to you as a customer to meet your use case. We saw last year with Web conferencing software that you could pick between unlimited usage with a few seats or unlimited seats with limited usage. You can tailor what you pay to what you need. …

Dave Linthicum: Number one, cloud computing goes mainstream. That’s a top prediction, I’m just seeing the inflection point on that.

I know I’m going out on the edge on this one. Go to indeed.com and do a search on the cloud-computing jobs postings. As I posted on my InfoWorld blog few weeks ago, it’s going up at an angle that I have never seen at any time in the history of IT. The amount of growth around cloud computing is just amazing. Of course, it’s different aspects of cloud computing, not just architecture with people who are cloud computing developers and things like that.

The Global 2,000 and the government, the Global 1, really haven’t yet accepted cloud computing, even though it’s been politically correct for some time to do so. The reason is the lack of control, security concerns, and privacy issues, and, of course, all the times the cloud providers went down. The Google outages and the loss of stuff with T-Mobile hasn’t really helped, but ultimately people are gearing up, hiring up, and training up for cloud computing.

We are going to see a huge inflection point in cloud computing. This can be more mainstream in Global 2,000 than it has been in the past. It’s largely been the domain of SMBs, pilot projects, things like that. It’s going to be a huge deal in 2010 and people are going to move into cloud computing in some way, shape, or form, if they are in an organization.

The next is privacy becomes important. Facebook late last year pulled a little trick, where they changed the privacy settings, and you had to go back and reset your privacy settings. So, in essence, if you weren’t diligent about looking at the privacy settings within your Facebook account and your friends list, your information was out on the Internet and people could see it.

The reason is that they’re trying to monetize people who are using Facebook. They’re trying to get at the information and put the information out there so it’s searchable by the search engines. They get the ad revenue and all the things that are associated with having a big mega social media site.

People are going to move away from these social media sites that post their private information, and the social media sites are going to react to that. They’re going to change their policies by the end of 2010, and there’s going to be a big uproar at first. …

Dave Lounsbury: I’m going to jump on the cloud bandwagon initially. We’ve seen huge amounts of interest across the board in cloud and, particularly, increasing discussions about how people make sense of cloud at the line-of-business level.

Another bold prediction here is that the cloud market is going to continue to grow, and we’ll see that inflection point that Dave Linthicum mentioned. But I believe that we’re going to see the segmentation of that into two overarching markets, an Infrastructure-as-a-Service (IaaS) or Platform-as-a-Service market (PaaS) and Software-as-a-Service (SaaS) market. So that’s my number one prediction.

We’ll see the continued growth in the acceptance by SMBs of the IaaS and PaaS for the cost and speed reasons. But the public IaaS and PaaS are going to start to become the gateway drug for medium- to large-size enterprises. You’re going to see them piloting in public or shared environments, but they are going to continue to move back toward that locus of controlling their own resources in order to manage risk and security, so that they can deliver their service levels that their customers expect. …

Jim Kobielus: Number one: IT is increasingly going to in-source much of BI development of reports, queries, dashboards, and the like to the user through mash up self-service approaches, SaaS, flexible visualization, and so forth, simply because they have to.

IT is short-staffed. We’re still in a recession essentially. IT budgets are severely constrained. Manpower is severely constrained. Users are demanding mashups and self-service capabilities. It’s coming along big time, not only in terms of enterprise deployment, but all the BI vendors are increasingly focused on self-service solution portfolios.

Number two: The users who do more of the analytics development are going to become developers in their own right. That may sound crazy based on the fact that traditionally data mining is done by a cadre of PhD statisticians and others who are highly specialized.

Question analysis, classification and segmentation, and predictive analytics is coming into the core BI stack in a major way. IBM’s acquisition of SPSS clearly shows that not only is IBM focusing there, but other vendors in this space, especially a lot of smaller players, already have some basic predictive analytics capabilities in their portfolios or plan to release them in 2010.

Basically, we’re taking data mining out of the hands of the rocket scientists and giving it to the masses through very user-friendly tools. That’s coming in 2010. …

Joe McKendrick: My number one trend is the impact of the economy. By all indications, 2010 is going to be a growth year in the economy. We’re probably in this V shape.

See, I’m actually an optimist, not a pessimist. The world may end in 2012, but for 2010, we’re going to have a great economy. It’s going to move forward.

I think 2010 will be a year of growth.

Number two: Cloud computing. We’ve all been talking about that. That’s the big development, the big paradigm shift. Clouds will be the new “normal.” From the SOA perspective, we’re going to be seeing a convergence. When we talk about cloud, we’re going to talk about SOA, and the two are going to be mapped very closely together.

Dave Linthicum talks a lot about this in his new book and in his blog work. Services are services. They need to be transparent. They need to be reusable and sharable. They need to cross enterprise boundaries. We’re going to see a convergence of SOA and cloud. It’s a service-oriented culture. …

JP Morgenthal: Number one: Cyber security. I am beginning to understand how little people actually understand about the differences between what security is and information assurance is, and how little people realize that their systems are compromised and how long it takes to eliminate threat within an organization.

Because of all of this connectedness, social networking, and cloud, a lot of stuff is going to start to bubble up. People who thought things were taken care of are going to learn that it wasn’t taken care of, and there will be a sense of urgency about responding to that. We’re going to see that happen a lot in the first half of 2010.

Number two: Mobile. The mobile platforms are now the PC of yesterday, right? The real battle is for how we use these platforms effectively to integrate into people’s lives and allow them to leverage the platform for communications, for collaboration, and to stay in touch.

My personal belief is that it overkills information overlook, but that’s me. I know that everywhere I go, I see people using their iPhones and flicking through their apps. So, they hit upon a market segment, a very large market segment, that actually enjoys that. Whether small people like me end up in a cave somewhere, the majority of people are definitely going to be focused on the mobile platform. That also relates to the carriers. I think there still a carrier war here. We’ve yet to see AT&T and iPhone in the U.S. break apart and open up its doors to other carriers. …

Jason Bloomberg: I’m going to be a bit of the naysayer of the bunch. I just don’t see cloud computing striking it big in 2010. When we talk to enterprise architects, we see a lot of curiosity and some dabbling. But, at the enterprise scale, we see too much resistance in terms of security and other issues to put a lot of investment into it. It’s going to be gradually growing, but I don’t see such a point coming as soon as you might like.

Small organizations are a different story. We see small organizations basing their whole business models on the cloud, but at the enterprise level, it’s sort of a toe in the water, and we see that happening in the 2010.

Another thing we don’t see really taking off in any big way is Enterprise 2.0. That is Web 2.0 collaborative technologies for the enterprise. You know, “Twitter On Steroids,” and that kind of thing. Again, it’s going to be more of a toe in the water thing. Collaborative technologies are maturing, but we don’t see a huge paradigm shift in how collaboration is done in the enterprise. It’s going to be more of a gradual process.

Another thing that we are not seeing happening in 2010 is CIOs and other executives really getting the connection between business process management (BPM) and SOA. We see those as two sides of the same coin. Architects are increasingly seeing that in order to do effective BPM you have to have the proper architecture in place. But, we don’t see the executives getting that and putting money where it belongs in order to effect more flexible business process. So, this is another work in progress, and it’s going to be a struggle for architects to make progress over the course of the year. …

Tony Baer: On cloud and virtualization, basically I agree with Jason, and I don’t agree with David or with Joe. It’s not going to be the “new normal.” We’re going to see this year an uptake of all the management overhead of dealing with cloud and virtualization, the same way we saw with outsourcing years back, where we thought we’d just throw labor costs over the wall.

Secondly, JP, I very much believe that there is going to be convergence between BI and CEP this year. I agree with him that there’s not going to be a surge of Albert Einsteins out there. On the other hand, I see this as a golden opportunity for vendors to package these analytics as applications or as services. That’s where I really see the inflection curve happening.