Predicting Canada’s technology future

The VAR community is becoming increasingly influential over IT purchase decision makers, and vendors that ignore that influence by going direct will not succeed.

That’s one of the predictions for 2008 made by the analysts at Toronto-based IDC Canada.

The biggest channel specific prediction from IDC involved the SMB and partnering evolution.

The increasing attention around software-as-a-service (SaaS) in 2008 will benefit both partners and SMBs, said Vito Mabrucco, managing director of IDC Canada, if partners adjust their businesses to the new approach.

“More channel partners will begin to reinvent themselves to deliver services-focused solutions vs. hardware-focused solutions,” he said.

Partner-to-partner networking will also increase in 2008 fueled by Web 2.0 technologies; a defining trend that Mabrucco said will begin to redefine vendor-partner relationships and behaviour.

“As (vendors) try to go direct we believe that strategy will fail, they’ll succeed with a partnering relationship,” said Mabrucco, adding vendors will need to recognize the growing influence VARs are gaining over the sales process.

Overall, IDC made 10 industry-wide predictions for the year. “Our predictions this year come in the context of the tidal-wave of change coming to the way we live, work and play,” said Mabrucco, in a Web cast.

1 ICT spending tempered as the loonie goes the distance

Setting the stage, Mabrucco said IDC sees a fairly positive economic outlook for Canada, with investment and growth continuing to be fueled by a strong commodity base.

While there will be short-term pressure in Canada, Mabrucco said the long term lookout is bright and our strong commodity base will fuel continued growth.

IDC is predicting Canadian ICT spending will reach $81.5 billion in 2008, with a four to five per cent growth rate that will continue to outstrip GDP growth. We’ll also be outpacing U.S. growth of three to four per cent, but will fall just off the global pace of five to six per cent.

The business telecom segment will have $21 billion of that pie, with consumer telecom coming next at $18.8 billion, fueled by wireless. IT services is predicted to grow 3.8 per cent and software by five per cent. Mabrucco singled-out the hardware segment’s predicted four per cent growth rate as particularly impressive, given that increasing margin pressure means vendors will need to sell even more equipment.

2 Web 2.0: Productivity workhorse

Certainly social networking and Web 2.0 were high profile topics in 2007, and most businesses by now should be familiar with companies like Facebook, MySpace and LinkedIn.

IDC believes Web 2.0 will become critical to businesses in 2008, as business leaders look for technology tools to help them meet the ever increasing demands for productivity improvements. Vendors like Microsoft are working to move Web 2.0 into the enterprise space, and channel partners will have a key education and integration role to play.

Mabrucco added IDC also sees the beginning of a new phase, Web 3.0, which will involve the coming together of various Web 2.0 applications.

“It is real, and if you haven’t learned about it you need to,” he said.

3 IT Security: Security goes back to basics

The IT security situation in Canada is going to get worse before it gets better, says IDC, because Canadian companies are over-confident, business leaders aren’t taking it seriously and IT leaders aren’t providing best practices.

The market is growing quickly, with 14 per cent growth predicted in 2008, but it’s also fragmented. There’s a disconnect between what managers are looking for, what executives are looking for, and how security vendors are pitching their solutions.

Companies need to assess and manage the risks to their organizations, a task channel partners can help with. Also, security needs to be further integrated into storage and other areas of IT.

4 Technology takes on the environment

While 94 per cent of organizations believe they should be doing more to reduce the impact of their environmental footprint, far fewer actually are.

More can be done by the government, said Mabrucco, around regulations, guidelines and incentives for green investment. There are also a lot of stakeholders when it comes to green IT and those stakeholders need to come together, an area where the IT industry can help. People are looking for more how-to information, best practices and case studies, plus process and workflow changes.

5 Predictions by customer segment

a. Government Focus

The old adage is measure twice, cut once, and IDC says public sector organizations will be looking to do a lot of measuring in 2008. Government IT decision makers are increasingly being held accountable, so they’ll be looking for more pervasive metrics, agency accountability, and other tools to help prove the return on investment for their IT spend.

b. Financial Services Focus

In their drive for customer-centricity, financial services organizations will be looking for a more enterprise-wide view of their clients, and a more seamless customer experience across all their channels.

Risk management is also an increasingly important issue, and as the banks look to improve efficiency and focus on core operations, Mabrucco said there will be increased opportunity for business process and IT outsourcing business.

c. Healthcare Integration

The use of integrated technologies to allow and support the capture of patient data will become increasingly important, said Mabrucco, as Canada’s population ages. The aging population will shift the focus to chronic disease management, and to where care is given and by whom, making collaboration and access to real time information critical and opening the door for Web 2.0 technologies.

6 VoIP Graduates: Dawn of Unified Communications

With VoIP having achieved critical mass in the enterprise, IDC said it’s now on to unified communications (UC). There’s still a lot of confusion in the marketplace around the myriad of UC offerings, said Mabrucco, with each vendor taking its own approach. IT decision makers are challenged to find a unified message around UC. The incumbent network service providers will need to increasingly act as integrators to bring it all together.

7 SmartSourcing-Services Mash-ups

The evolution of the sourcing model is continuing, said IDC, from the tactical outsourcing of the pre-2000 era to the “Outsourcing 2.0” model of today, with mega-relationships and services aggregators delivering the best value available. IDC is calling the next phase “SmartSourcing” and it will be characterized by more flexible sourcing driven by Web 2.0 technologies like mash-ups allowing more efficient supply-chain communications.

“Customers are now being more demanding of their service providers and they want them to evolve their service delivery models…at a competitive business cost,” said Mabrucco.

8 Payments Go Mobile: One Step at a Time

There’s a lot of hype around the mobile payments space, but IDC said there’s a number of key things that need to be worked-out before it can take off in a big way.

Among them is the need for a standards body, which would create a single technical model to allow for efficient payments across systems and devices. Also, the stakeholders will need to agree on a model for sharing revenue, as well as the costs of building the system.

9 Consumer Technology in the Enterprise: Benefits Abound

The low cost of consumer technology is m

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Jim Love, Chief Content Officer, IT World Canada

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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