As 2010 is drawing near, what kind of changes can we expect?

According to analysts, by the end of 2010 analysts expect there to be more than 1 billion mobile devices accessing the Internet - boosted by the growing popularity of smartphones and the arrival of Apple’s iPad tablet computer.

Mobile devices will also exert a powerful transformational force on the industry as they increasingly compete with PCs as the primary client platform for developers and users alike, predict tech analysts at IDC.

A Modest Recovery
The IT industry will begin to expand again next year, according to IDC, with spending increasing to $1.5 million, good for a 3.2 percent bump. What product areas will be hot? Mobile devices and virtualization, says the report. Plus, demand for software and PCs will return. IDC also expects outsourcing and managed services to show “good growth.”
“The economic recovery will release some of the pressure on spending, enabling a number of transformational tipping points to be reached in a year of economic upswing,” says Frank Gens, chief analyst at IDC, and author of the study.
Telecom Transformation
The global telecommunication market will also see a comeback in 2010, according to IDC, with spending increasing 3 percent due to demand in the IP and data segments in the mature markets, and mobile spending in the emerging economies.
But long-term structural changes will put pressure on the industry to transform, says the report: “2010 will see telecom players accelerate their migration to higher-speed fiber and wireless technologies and to converged IP platforms (supporting the exploding growth of video traffic), expand their managed services footprints, and transform their service delivery platforms and business models to support the growing wholesale, connected device, and machine-to-machine opportunities.”
Emerging Markets Drive Growth

Markets like the U.S. and Western Europe may remain vulnerable next year, but China, India, Brazil and Russia will ensure the IT recovery. By the end of the year, predicts IDC, those four countries will account for more than 10 percent of IT spending worldwide, with the overall emerging markets making up 21 percent.

Another “emerging market,” according to IDC, is underpenetrated small and medium-sized businesses, even in developed economies. “While SMBs took a beating (with a worldwide growth decline of about 3.5 percent) in 2009, we predict that SMB growth will reach 3.5 percent, 1.4 points higher than large enterprises, with the midmarket the brightest spot, recovering faster than small enterprises,” says the report.
The Cloud Expands and Matures
IDC offers up a slew of predictions about cloud computing in 2010, a year it says will be marked by the emergence of enterprise-grade cloud services.
- Public cloud gets more crowded. Salesforce.com, Microsoft and Google will be joined in the public cloud battle by IBM, Oracle and leading IT services providers and telecos, says the report. Also, Google will make its platform more enterprise-friendly and Amazon will develop an application platform.
- A big year for private clouds. IDC expects virtually every major IT provider to make private cloud announcements in 2010. “This is not surprising,” says IDC, citing its yet-to-be-published report that “shows a strong preference by businesses for private clouds over public clouds.”
- Cloud appliances explode. “Dell, IBM, HP, Sun, Fujitsu, Hitachi — and Intel and AMD — will partner with software vendors for ‘applianced’ versions of traditional on-premise packaged software,” says the report. IDC also sees Oracle becoming an aggressive player in the cloud appliance space, and Salesforce and Google partnering with systems vendors to create appliance versions of their public cloud services.
Hybrid cloud management tools will get hot, adds IDC, and a “cloud accessories” market will emerge. The report also predicts that customers will put more pressure on cloud vendors to work on open APIs that help prevent lock-in, though IDC doesn’t see any major breakthroughs on that front in 2010.
Androids and iPads
Mobile devices won’t kill PCs any time soon, says IDC. But a continuing trend in 2010 will be the devices “no longer being viewed as strictly subservient to PCs but as primary client platforms for developers and users alike.” Among IDC’s predictions:
- Welcoming the iPad. 2010 will see the launch of Apple’s long-rumored tablet, says IDC, which calls it a no-brainer. IDC expects the device to be more of a downsized iPod Touch than a mini-Mac, and it sees the Apple tablet putting the hurt on Amazon’s Kindle e-reader, as well as causing a stir with its movie-watching, game-playing, videophone and Web browsing capabilities.
- App store grows by leaps and bounds. Apple’s iPhone application store will grow from more than 100,000 apps to at least 300,000, many of which will come from well-known business and consumer brands.
- Android emerges. IDC sees a big year coming for Google Android phones, predicting that the number of apps for the phones will grow from 10,000 to as many as 75,000 by year-end. Android’s advantage is that it’s more open than the iPhone, notes the study, but that also creates compatibility challenges for developers, given the variety of devices that use the OS.
- Over 1 billion served. “For the first time, there will be over 1 billion mobile devices accessing the Internet by year-end, gaining quickly on the 1.3 billion PCs accessing the Internet,” says the report. More than 200 million smartphones will ship this year, says IDC (good for 16 percent of the market), and more sub-$150 smartphones will be released.
Pressure on Public Networks

Expansion of the cloud, mobile usage and video applications will continue to tax public networks next year, says IDC. Here are themes it sees playing out:

- 4G rollout overhyped. Sure, 4G is a big advance, says IDC, but it won’t be felt much in 2010, and only 125,000 4G-capable phones will ship next year. The real wireless network story, according to the report, will be the “steady migration of carriers and customers to 3G technologies.”

- Fixed broadband shifts to fiber. In 2010, fixed line operators will continue the buildout of fiber to home and neighborhood networks, says IDC, which predicts that in the U.S., almost 2 million more homes will connect to the Internet via fiber. And fiber broadband subscribers will account for more than 40 percent of new subscribers in 2010.

- Wireless services go invisible. IDC expects more mobile providers to strike deals with mobile device and cloud services providers to offer “built-in wireless connectivity through an under-the-covers wholesale model. The most prominent example we’ve already seen is Amazon wholesaling wireless (from Sprint and AT&T) for the Kindle’s Whispernet capability.

Socialytic Apps
Say hello to socialytic apps, a new generation of mashed-up business applications that leverage social networking and collaborative tools. IDC says the hot areas in 2010 for these apps will be marketing, reputation monitoring and fraud detection, as well as people-centric search and business intelligence.
Microsoft, IBM, Oracle, SAP and Google will battle for the socialytic app market, predicts IDC, along with upstarts like Jive and Telligent. IDC sees companies spending more of their software dollars on these platforms than on their core ERP systems. “SAP, much more heavily dependent on ERP than Oracle, has the most to lose unless it can leverage its business process expertise and BI assets to make a splash here,” says the report.
Green Pressures Return
With the economic recovery, the cost of energy is likely to rise, says IDC, along with the focus on sustainability. Technology that helps enterprises reduce their carbon footprint will see increased demand, including virtualization software and systems automation applications, as well as power-efficient compute, storage, network, and printing systems.
Also in demand, says IDC, will be “IT offerings that support sustainability management and real-time monitoring and control of operational systems in high carbon output industries, including sustainability solutions software, sensor technology, network infrastructure, service management software, and analytics software.”
Smart Meters and EMR
As other industries come out of the recession, IT will serve as an “increasingly important lever” for their transformation agendas, predicts IDC. U.S. utilities, for example, will have deployed over 20 million smart meters in 2010, says the report — globally, that number should soar past 60 million. That growth will drive “unprecedented” levels of investment in smart grid technology and enable increased usage of renewable energy resources and the number of plug-in electric vehicles.
Another IT-driven transformation will continue to take place in the healthcare industry, says IDC, which predicts that 25 percent of Americans will have an electronic medical record by year-end, up from the current 14 percent. “This transformation will drive a broadly based investment in infrastructure services, hardware, and software as healthcare providers look to maximize the benefits from healthcare IT,” according to the report.
M&A Activity
IT players will continue to broaden their offerings through acquisitions, says IDC, citing 2009’s Oracle-Sun and Xerox-ACS pairings and the Cisco-EMC joint venture. Dell, which picked up Perot Systems this year, could expand its cooperation with Microsoft while bolstering its in-house software capabilities with deals in IT management applications, a sector that includes CA, Compuware, BMC, Symantec and Novell. IDC also takes a “three-point shot” with the prediction that IBM will reenter network hardware with the acquisition of Juniper Networks. Will Cisco and EMC merge? Not in 2010, says IDC.
Meanwhile, acquisitions could also shake up the cloud landscape, where Amazon needs to build its platform-as-a-service offerings and Google needs more business-focused solutions to become an enterprise player. SAP, which has been slow to grow its cloud platform, could “decide it needs to acquire more pure-play cloud assets to hedge its current cloud strategy and accelerate its expansion in the cloud,” says IDC. And companies like Accenture, Wipro and Infosys will look to expand their cloud infrastructure services with acquisition targets including Terremark, Rackspace and Savvis.
Another IDC prediction: At least two large ($300 million or more in sales), industry-specific technology providers will be purchased by the usual enterprise software suspects — IBM, Oracle, SAP and Microsoft. The characteristics of the likely candidates include “high debt or private investors that want to cash out, software providers without a good SaaS or cloud strategy, and a focus on slow-growing areas of financial services — whether line of business or geography.”

Forrester analyst Rebecca Jennings is predicting, “This deal should help convince even the most stubborn budget-holder that spreading their money outside of Google would be beneficial. This will create a more viable second-string player in all markets, giving interactive marketers a significant, credible alternative/additional outlet for their search spend.”

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