After the shock of 2009, the business focus on information technology in Asia appears to have fundamentally changed and there may be no turning back. Global market intelligence firm IDC warns that, during the last year or more, companies in Asia have mostly applied ‘wait-and-see’ or ‘back-burner’ IT tactics — but this will no longer work as the economy starts to turn again.
“In 2010, companies will have to adopt a sense of urgency and be more proactive with how they will deal with an economic recovery,” says Claus Mortensen, principal for IDC’s Asia Pacific Emerging Technologies Research Group.
“The economic downturn has taken its toll on all lines of business in the last year and that makes it even more vital to be ready to deal with the next upswing,” Mortensen says. “Companies will have to make strategic bets on when the economy will turn and plan their IT investments accordingly.”
This bottom line IT focus will increase the popularity of cloud computing, which global management consulting, technology services and outsourcing company Accenture, like many others, sees as a dominating trend for the year to come. Lawrence Goh, technology consulting lead for Accenture, ASEAN, says the enterprise benefits of cloud computing, which enables technical capabilities—hardware, software and storage—to be sourced through the Internet across company firewalls and national boundaries, are comprehensive.
“As a company’s IT ecology becomes Internet-oriented, it’s no longer limited by its internal and usually fixed technical and business capabilities, whether they are hardware, software or business processes,” Goh says.
“Additional computing capacity can be added as needed; business processes can be shared and integrated with business partners; entry into emerging markets, often with unpredictable demands, can be accomplished more quickly without long lead times or large fixed costs; local and regional partners can be accommodated; and arguably, business continuity will be enhanced as a company’s IT ecology is now immune to local catastrophes.”
No Cookie Cutters
Goh believes that, as such sourcing options proliferate, “organisations will be able to create new best-of-breed business applications that are uniquely suited for their needs, rather than depending on cookie-cutter processes provided by large, monolithic software packages”.
“And these capabilities can be bought as services (rather than products) in a pay-as-you-go model.”
Accenture also points to two distinct factors—speed of innovation and the extent of worldwide penetration—to suggest that mobile devices will augment, and in many cases supplant, PCs as the new e-business channel for employees and customers.
First, says Goh, innovation in mobile devices continues at breakneck speed: today’s high-end devices run on 800 MHz processors, have a storage capacity of 32GB, touch-sensitive or OLED screens, wi-fi connectivity, near-field communications (NFC) for interacting with the environment, 3G network speeds of up to 384Kbps, GPS-based location identification, motion sensors and accelerometers, eight megapixel cameras and a wide range of audio and video entertainment features. They are also becoming full-fledged ‘platforms’ capable of running a wide range of third-party applications.
Second, Goh describes the extent and depth of mobile device penetration worldwide as “indeed staggering”. Nearly four billion people—or 60 per cent of the world’s entire population—are mobile customers, with 2008 alone adding more than half a billion new users.
“Interestingly,” Goh says, “75 per cent of the subscribers are located in emerging markets and the mobile phone is their sole means of electronic communication.
“Nearly all of the devices have SMS texting capability and an increasing number (although no reliable figures exist) have some rudimentary Internet connectivity.
“Estimates suggest that by 2013, nearly 70 per cent of mobile phones in developed nations will support an Internet browser and near-field communications (NFC).”
With Accenture expecting about 700 million NFC-enabled mobile phones in circulation by 2013, they believe mobile phones may become the new ‘smart card’ for authentication and monetary transactions.
“Payment through mobile phones is already quite widespread in Japan and trials are underway in Germany to use mobile phones as train tickets,” says Goh. “In the emerging world, pure texting from mobile phones is used in many creative ways, the most notable one being the MPESA money transfer system widely used in Kenya.”
Although mobile devices are currently regarded by IT executives as something of a headache, Goh believes that, as smart phone penetration increases among corporate employees, it will become easier to create a single browser-based interface rather than deal with a heterogeneous set of devices.
“And,” he says, “OLED screens are expected to dramatically decrease power consumption and increase battery life. The bottom line for IT departments is that, despite security concerns, mobile devices are here to stay and must be treated as a first-class IT object in terms of IT strategy, planning and support.”
IDC expects India and China to remain the twin engines of growth for the overall mobile segment with the two countries collectively shipping more than 295 million units in 2010.
The key driver of smart phones in the emerging markets is the increasing sophistication of mobile users, says the research house. Shipments of converged devices in China are expected to grow from 7.5 per cent of all shipments in 2008 to 13.5 per cent in 2010. IDC says that, for the mobile industry, this represents “an enormous prospect and a growing one”.
Asia may have suffered a recession, but there’s no shortage of interest in new ideas.
A joint Asia Pacific survey late last year, by PricewaterhouseCoopers (PwC) and the APEC CEO Summit 2009 organisers, found that investment in innovation has not taken a backseat in the global crisis, particularly in Asia.More than 58 per cent of respondents to the study expect higher R&D spending in the next 12 months, as compared to the previous year, with the highest forecast by Northeast Asian respondents (66 per cent). In contrast, nearly half (48 per cent) of respondents in the Americas do not expect any change in their R&D budgets.
Most agree that IT spending will increase in the Year of the Tiger, but analysts differ in their forecast numbers.
Goldman Sachs’ latest IT spending survey, of 100 IT executives from Fortune 1000 companies, forecasts a modest four per cent overall growth in the coming year, with pent-up demand for new hardware such as servers and PCs stimulating an increase in Windows 7 upgrades.
Global market intelligence firm IDC has a more upbeat view of the year to come, predicting 7.7 per cent growth in ICT spending in the Asia Pacific (excluding Japan) to US$184 billion in 2010.
Goldman expects spending on software for servers (with VMware and Red Hat ranking highest), as well as virtualisation and software-as-a-service (SaaS)-based applications (with VMware, salesforce.com and Citrix ranking the highest) to return to ‘normal’ levels in 2010.
“But, with more than half the survey respondents indicating they will do PC, server and storage refreshes next year, most of the spending will be on hardware,” according to the survey report.Goldman says the arrival of Windows 7 also has a significant influence, with 94 per cent of survey respondents intending to upgrade to Windows 7, with 32 per cent planning to do so in 2010 and 28 per cent anticipating an upgrade in 2011.
The remaining 34 per cent of Windows 7 upgraders, who report the intention to upgrade in 2012 and beyond, will lean more toward 2012. Why? Because 85—90 per cent of respondents are still on Windows XP, and XP support expires in April 2014.
“We believe that 2013 becomes a de facto deadline for Windows 7 upgrades,” states the Goldman Sachs report.
One piece of bad news for Microsoft from the survey: Apple, surprisingly, is the PC maker gaining the most share of IT dollars, followed by Windows-based PC makers HP, Lenovo and Dell.
“Although Apple’s presence in the enterprise PC segment remains small,” the report states, “the company was a share gainer for the 11th consecutive time in this survey, as companies and employees continue to adopt the Mac platform for corporate use.”
A recent study, commissioned by Microsoft, found late last year that senior IT executives in Singapore believe their biggest challenges in the Year of the Tiger will be improving productivity and reducing IT costs.
The survey of 221 IT decision-makers, from multinational and Singapore companies, discovered that their key priorities will be to find a balance between improving collaboration, mobility and better management as companies plan for the next wave
Another interesting finding was that 88 per cent of those surveyed acknowledged the need for IT to adapt to the new and different demands of Generation Y employees.
Haresh Khoobchandani, senior director, business and marketing organisation, Microsoft Singapore, says Generation Y is a demanding workforce.
“As digital natives, their productivity is dependent on mobility, connectivity and speed,” says Khoobchandani. “From our survey, it was heartening to see that nine out of 10 IT professionals acknowledge that this is a trend they need to pay attention to, and that they are prepared to provide flexibility and choice to users.”
IM in the Workplace
The consumerisation of IT means users now expect the same experience at work as they do at home, demonstrated by the growing use of free instant messaging tools in the workplace. Microsoft says that, currently, 63 per cent of employees use instant messaging tools for internal communications, while more than half (53 per cent) use it to communicate with customers.
The Microsoft study drew responses from 221 IT managers, from multinational and local companies that ranged in size from large to small. It was commissioned to coincide with the launch of the company’s three new business solutions—Windows 7, Windows Server 2008 R2 and Exchange Server 2010—which Microsoft claims deliver new levels of efficiencies and functionality for the desktop, data centre and unified communications.
Khoobchandani says in 2010’s “economic reset” companies will be constantly challenged to do more with less to achieve a new level of efficiency.
“Cost cutting is only half of the equation,” he says. “It is Microsoft’s belief that the new efficiency will be achieved through a balance of cost savings, innovation and productivity.
“The survey reinforces that IT managers are aware of the need for this balancing act and understand that new technologies can be used to build a competitive advantage by improving business productivity and delivering better value to customers. They need to do this while managing security, maintaining control of their IT environments and meeting compliance needs. We feel very confident that the three innovations we are bringing to market now will help IT managers with this balancing act at the desktop, data centre and messaging levels.”
Laptops over Desktops
Microsoft found that, overall, the organisations surveyed will see a 50 per cent increase in the number of laptop PCs in the next three years, compared to flat growth for desktops.
The survey also found that the use of smart phones in business is no longer just the privilege of senior management. Some 88 per cent of
IT professionals said they are being asked to provide wider support for mobile or remote synchronisation.
Matt Kolon, Asia Pacific CTO with Juniper Networks, says cloud computing, to date, has been centred on applications and platforms, but 2010 is likely to see a serious focus on the infrastructure required to deliver them.
“Already we’ve seen HP announce its intention to buy 3Com and the likes of Cisco, IBM and ourselves have all made moves to re-engineer the network,” Kolon says. “This gives the best indication yet that cloud computing is being taken seriously and that 2010 is going to see a big demand for intelligent networking.”
Application-aware networking is an area that Juniper expects to receive attention.
“In the cloud world, as operations are centralised into the data centre and applications and data are accessed remotely, the network assumes a critical importance,” . “Application aware networking allows even greater flexibility, scale, security, quality of service and capacity—key drivers for cloud computing growth.
Doing More with Less
“In the enterprise, the global financial crisis has left everyone with a far more acute focus on productivity and cost control—doing more with less. Accountants have been running the business and their main focus is TCO [total cost of ownership], ROI [return on investment] and how much value is delivered,” Kolon says.
Goh says while the economy seems to be improving, this tighter focus on value-orientated metrics is sure to continue and this is going to be “a great thing for the industry”.
“It means the challenger vendors, with a proven story in reducing operating costs and delivering greater value, will continue to take the game to the more established competition that have relied on deep in-built relationships rather than proven business success,” he says. Network computing infrastructure solutions provider Sun Microsystems believes “2010 may well be a year of innovation and transformation if the economy recovers from recent woes”.
Lionel Lim, president, Sun Microsystems, Asia Pacific, says enterprise IT professionals will likely want to increase their investments in cost saving innovations such as flash storage, open source software and virtualisation.
He says consolidation has prompted vendors to provide end-to-end solutions for the data centre from networking to more efficient servers and client side virtualisation. Doing more with less will continue to be the guiding principle for CIOs in 2010.
Open Source Gains
“Developments in open storage, flash storage and cloud computing are gaining mainstream adoption by businesses in the region,” says Lim. “As organisations look to streamline their IT budgets, solutions that help manage costs or extend product and service offerings will gain in popularity.
“The flexibility to control one’s own software to best suit one’s business needs, within budget limitations, is a compelling reason for organisations to adopt open source solutions,” he says.
“Green computing will continue to be a point of focus for corporations, and the popularity of netbooks will spur businesses to develop or utilise existing cloud applications for their mobile workforce.”
Goh believes that senior IT executives will need to approach their work in 2010 with a ‘new level of trust’ as their organistions begin hosting various IT applications in the cloud, from e-mails to customer relationship management (CRM) to collaboration tools such as instant messaging.
“The ability to work remotely has changed much of the modern workforce in the past three years—the advent of cloud computing will see the workforce collaborate with more rich documents and media online, achieving even higher levels of productivity and efficiency,” he says.
“The outlook for 2010 is one of hope and renewed enthusiasm for recovery. I believe businesses and IT departments will look at new ways to innovate with existing assets and infrastructure, focusing on how to renew and enhance the processes behind key operations, security or customer service functions.”
On the digital security front, F-Secure expects more iPhone threats, increased snowshoe spamming, and more blackhat search engine optimisation attacks in 2010.
“In 2010, we’re expecting to see more iPhone attacks, and possibly also proof-of-concept attacks on Android and Maemo,” Wing Fei Chia, senior security response manager at F-Secure Asia Pacific says. “Other trends encompass a likely increase of snowshoe spamming and blackhat SEO attacks.”
Snowshoe spamming is a technique used by spammers to spread spam output across many IPs and domains, to dilute reputation metrics and evade filters, just like a snowshoe spreads the load of a traveller across a wide area of snow.
F-Secure also forecasts at least one large-scale DDoS attack against a nation-state, and perhaps even a large-scale internal attack against a target such as Google Wave. They predict that, with Facebook now reaching 350 million accounts, there will be more attacks on social networks such as Facebook, Twitter, Myspace, and Linkedln.
IT security specialist Kaspersky Labs believes malware will become much more sophisticated in 2010 and many anti-virus programs will be slow to treat infected computers due to advanced file infection methods and rootkit technologies.
Alex Gostev, director of Kaspersky Lab’s global research and analysis team, says “IT security companies will respond by developing even more complex protection tools. However, the malicious programs capable of bypassing these measures will remain more or less immune to anti-virus programs for some time.”
He also believes 2010 promises to be a difficult time for iPhone and Android. “The first malicious programs for these mobile platforms appeared in 2009, which is a sure sign that they have aroused the interest of cyber criminals,” says Gostev.
“The only iPhone users at risk are those with compromised devices, but the same is not true for Android users who are all vulnerable to attack. The increasing popularity of mobile phones running the Android OS in China combined with a lack of effective checks to ensure third-party software applications are secure will lead to a number of high-profile malware outbreaks.”
Stephen Ho, CEO with CPCNet, a communications and security solution provider headquartered in Hong Kong, also predicts that 2010 will be a challenging year with flexible and cost-saving IT strategies dominating.
Ho expects that enterprises will use more IP-virtual private network (IP-VPN) services and other managed solutions to reduce their IT operational costs and travelling expenses, providing new opportunities for the growth of virtual private network business.
He also believes service providers will turn IT outsourcing into XaaS (Everything-as-a- Service) model.
“More XaaS types of outsourcing service will be demanded by customers, like managed WAN optimisation services, managed video conferencing services, as well as managed network, managed storage, managed information security and value-added managed services,” Ho says.
“On top of these XaaS services, managed wide-area network (WAN) optimisation services will be one of the focused solutions in the market for businesses to improve the throughput of applications over WAN that they rely on every day — including file sharing, e-mail, backup, SSL, document management systems, and IT tools, as well as ERP and CRM solutions—giving them the ability to expedite applications while cutting costs and enhancing visibility.”
Focus for Data Centres
From the data centre perspective, Equinix, an American public corporation that provides carrier-neutral data centres and Internet exchanges, believes the evolution of the next generation of carrier interconnection services will be a key focus for data centres and data centre management in 2010.
Clement Goh, managing director, Equinix Singapore, says the recent development of the Ethernet Network to Network Interconnections (NNIs) will allow carriers to interconnect and pass data between ethernet services.
Equinix recently announced the development of the Equinix Carrier Ethernet Exchange platform with Alcatel-Lucent, an industry first that will enable the delivery of ubiquitous, high-performance global Ethernet services.
“The platform marks the evolution of the next generation of carrier interconnection services, which will provide fast connectivity to a broad range of service providers, creating a marketplace that effectively enables providers to offer the first regional and global offering in this space,” he says.
What key advice would Equinix give to major enterprises relating to data centres in 2010? How has the market changed and what will distinguish the data centre environment for the coming year?
This major data centre player says the increasing sophistication of computer equipment is driving the demand for power and cooling facilities within data centres. It is vital for enterprises to have long term planning with their data centre strategy. Only data centre providers who are able to support high power density deployments with scalability in terms of both power and space can grow with your business. Though connectivity cost has been decreasing substantially in the past few years, it remains a significant portion of IT spending for the enterprises.
Ethernet services are gaining traction in the market because of its ability to ease the pain and cost of network management. IT managers should go for data centres that provide a range of network and carrier options.
This will provide them with the chance to compare pricing and develop network redundancy for optimised performance.
Sidebar: Disturbing Findings
The Microsoft survey also revealed some disturbing results. These include a lack of management support for IT professionals in being able to effectively address the consumer IT push into the enterprise space:
71 per cent of IT managers reported that management does not understand the potential security risk of using popular software in the market;
68 per cent said their management does not understand the importance of a centrally managed OS or server, implying that the benefits of cost savings and easier management through consolidation cannot be realised.
Consumer-driven demands are putting a significant strain on IT resources, management and security. The rampant use of free software tools like instant messaging and the broader mobility of information workers have increased concerns around security and control.
Only 51 per cent of IT managers feel that every employee should have access to files and e-mail no matter where they are, indicating that there is a gap between the demand from users versus what IT managers believe they can deliver.
At least 90 per cent of respondents are constantly looking for ways to improve the security of their operating systems, simplify the approach to high availability and disaster recovery as well as stay compliant.
At least 80 per cent of managers are actively looking for ways to reduce the burden on help desk teams such as automating the deployment of software to users and simplifying common tasks and improving e-mail management, of which storage, archival and retrieval were among the top 10 help desk requests.
Sidebar: Data Centre Advice
What are the three key issues that Equinix believes should dominate the thinking of major enterprises about data centres in 2010?
Turn CAPEX (capital expenditure) into OPEX (operational expenditure)—building data centre is very CAPEX intensive. Outsourcing will help enterprises turn CAPEX to OPEX.
Scalability — not only space, but also power and cooling requirements are becoming prominent in the data centre selection processes.
Connectivity options—both for cost efficiency and redundancy purpose. The more choices available, the better the network performance. CIO Asia
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