Welcome back everyone -- to 2009.
It doesn't promise to be an easy year, does it?
If I had to pick one key theme to focus on, it'd be "accelerated change" -- things are going to start happening much faster than before. Tough economic conditions have a way of doing that.
On a personal note, it was wonderful to take two weeks off, and stay well away from blackberries and browsers. But now I'm itching to get back into the swing of things, hence this rather lengthy post.
A Quick Look Back At 2008
Having a bit of spare time on my hands, I enjoyed reading all of the different "best of 2008" stories by various journalists and analysts.
Now, I never agree with anyone's list (how could they pick that?) but I did extract a bit of satisfaction that EMC was pretty well represented in either specific offerings or generic themes of other people's lists.
And that EMC-relevant list was pretty substantial: cloud, virtualization, security, personal storage and backup, information risk management, even flash storage.
Nice to know we're staying pretty close to the action.
But, despite the interesting things that happened in our technology world in 2008, it was all upstaged by events in the economic world. And, for that reason, many of us are glad to be done with 2008 and on to a better 2009.
Onward to 2009!
I mentioned before that I believe the dominant theme in 2009 will be accelerated change, forced by a tough economy and the end of the luxury of business-as-usual.
As a result, I've decided to spend on the big themes that -- while not technically new ideas -- ought to be accelerated to forefront of industry thinking during 2009.
See what you think ...
Industry Theme #1 -- The Shift To An Information Economy
I've written before that many of us believe that information is becoming the single most important asset to most organizations. And a tough economy will accelerate this trend.
Already, I can see it showing up everywhere. People hammering their decision support environments, trying to figure out what's going on. Expensive business travel being replaced by more electronic collaboration. New services and offerings being crafted around detailed information, delivered over networks.
Maybe even better risk mitigation applications for the financial industry?
Information's ascendancy to the primary corporate asset was trending along nicely before 2008; now it seems to be in full throttle, and will likely stay that way for a while.
And I believe that many organizations will recognize this subtle yet important shift in economic value creation, and adjust their strategies accordingly during 2009.
Industry Theme #2 -- The New Information Worker Will Demand Better Tools
I borrowed the phrase information worker from IDC; I had been using the term "knowledge worker", but IW seems to fit the concept so much better -- workers who create value primarily from the use of information.
To me, this implies accelerated investments in a whole slew of technologies and environments that were just getting going in 2008: increased use of traditional decision support tools; newer corporate social productivity environments; advanced information worker productivity clients for our new social world; consistent virtual desktop experiences on laptop and mobile phones; more information risk management capabilities, and so on.
Yes, worker productivity is a squishy concept, but in a world where there are fewer workers carrying a much larger load, there's going to be strong demand for tools and environments that keep them 200% productive 24x7.
And the gap between the haves and the have-nots is getting to be a matter of corporate strategy, I'd offer.
Industry Theme #3 -- Information Governance Goes Mainstream
One of the more resonant themes I explored during 2008 was the notion of corporate information governance -- the growing need for a cross-functional executive-level function to wrestle through the newer policies we'll need for thriving in the information economy.
It's getting increasingly important to manage the balance between making money, saving money and staying out of trouble when it comes to managing information. There's no clear authority, and the rules keep changing. Just dumping the problem on the IT department, or the legal team -- well, that just doesn't seem to work out too well in many situations.
During 2008, we met more and more organizations that had recognized the challenges of effective information governance, and had taken the steps of setting up their own information governance boards.
And I'll think we'll see far more discussion around this topic during 2009.
Industry Theme #4 -- IT Accelerates As An Aggregator Of Services
There's nothing new here -- for many years, IT organizations have methodically used outside service providers and vendors rather than doing things themselves. What I think will be new in 2009 is that we'll see far more appetite for this sort of thing than we saw in the past.
Just about every IT organization I'm meeting is under substantial pressure to lower costs, improve existing services and deliver entirely new ones. And it's getting harder and harder to defend the traditional "we need to do this ourselves" stance in more and more situations.
The list of IT application tasks that just need to get done, rather than provide a competitive advantage, is getting pretty lengthy: backup and restore, email, productivity, CRM, ERP, security monitoring, storage, etc. Lots of good service-oriented alternatives in the marketplace today for many of these things, with more coming.
The key area I'm watching is newer offerings based on -- you guessed it -- virtualization technology. Once an application or desktop is nicely wrapped in a virtualization container, there's a lot less concern about how and where it might run.
I'm guessing that by mid-2009, we'll see a new crop of service providers offering to run your virtualized application or desktop in their data center, either as a direct substitute for your own infrastructure, or as "swing capacity" to react to surges in demand.
This transformation of a corporate function to an aggregator of services has already happened to other non-IT functions (HR, Legal, Finance, Manufacturing, Customer Services, etc. etc.) -- if anything, IT is a bit behind the pace on this one.
Industry Theme #5 -- IT Vendors Sellling Both Products And Services
OK, if you're an IT vendor, you're going to have to invest in getting more adept at selling your value proposition as either a product or as a service. Especially in today's economy, not everyone is going to want to buy and implement technology the traditional way, are they?
And I'm not talking about flying in a load of expensive consultants and contractors to create a bespoke "service". I'm talking about a repeatable, cost-effective offer with the same value proposition as your products, only consumed differently.
We saw some of this in 2008. I can't help but believe we'll see a lot more of this in 2009.
Industry Theme #6 -- IT Industry Consolidation
Sorry to say, but one of the inevitable consequences of an economic slowdown is a rapid consolidation of many of the players. I, for one, enjoy an industry environment with lots of newer players, but I don't think that's in the cards anytime soon.
First, from a customer perspective, it's just plain expensive to deal with large numbers of vendors. Heck, just listening to every decent pitch out there would consume an inordinate amount of internal resources. The natural bias will be to work with current vendors that you already have a relationship with, making things extremely tough for newer entrants -- no matter how compelling their pitch might be.
Second, there's a lot of redundant cost in a smaller vendor organization as compared to a larger one. Small IT vendors need their own dedicated sales and marketing function, their own corporate support for legal, finance, HR and IT, their own customer services operations. For larger IT vendors, economies of scale come into play in a big way, generally making offerings from smaller vendors proportionally more costly to produce, deliver and support on a per-transaction basis.
Third, there's just not a lot of investment capital flowing around these days to fund these newer IT vendors and help them get big. Even if they had an established track record and were making a modest profit, I would expect it would be very difficult to attract capital (whether by IPO or external funding) to fuel growth.
That's three big headwinds for the smaller IT players -- tough odds, I'd offer.
Industry Theme #8 -- Non-IT CIOs
I deal with a good number of IT organizations, and I've been keeping score on an interesting trend over the last few years.
When a good-sized organization appoints a new CIO, is it someone with broad IT experience?
Or is it someone with an excellent grasp of the business -- and with little or no specific IT experience?
You might be surprised how often it's becoming the latter choice. To me, this heralds a change in how organizations are starting to view IT -- as an extension of the business strategy, rather than a standalone discipline.
And, in a world where IT is increasingly an aggregator of external services, where information becomes the most important asset -- what becomes more important?
it will be someone with a business strategy background, and less of a technologist. I use the term "the CFO of information" to describe the concept.
And I'm predicting we'll hear far more about this in 2009.
Industry Theme #9 -- A Complete Rethink Of IT Infrastructure
You might be surprised at how many organizations are seriously considering what their IT infrastructure landscape might look like in 2010 and beyond.
We're not talking the typical incremental enhancements; it's more of a clean-sheet-of-paper discussion.
For decades, IT infrastructure has been seen as expensive and inflexible. There's a gaggle of newer technologies -- with virtualization at the center -- which offers tantalizing new options in IT infrastructure efficiency and responsiveness.
But getting there requires far more than just slapping some hypervisors on your x64 servers: the supporting infrastructure has to change, there's the need to rethink and recast policy, procedures, workflows -- even asking the fundamental questions around what should IT be doing itself, and what should be farmed out to future service providers -- entities that might not even exist today?
The hard part here is thinking holistically about what is essentially a future state. It's very heady stuff, but -- given the investment that many organizations make in IT infrastructure -- I see more and more organizations diving into the heart of the matter, and asking some pretty probing questions.
Today, I've got a personal list of about 30 companies I know about that are actively going through this thinking process.
I'm guessing that list will grow to at least 100+ by the end of the 2009.
Industry Theme #10 -- New Definitions For Storage
You didn't think I'd leave out my favorite topic, did you?
I won't share specifically what I think is going to happen in 2009 in the storage biz (confidential stuff, you know), but -- if you step back a bit -- we're talking an industry that's poised for significant change in several regards:
- continued growth and importance of information -- whether a good economy or not
- new storage technologies such as enterprise flash, dedupe, FCoE et. al. that create new economics and value propositions that didn't exist a few years back
- new access methods beyond block and file that make storage more of an intelligent abstraction, rather than a physical entity
- containerization of applications and desktops in virtual machines that changes the physics of how storage will be used
- and entirely new delivery methods (think cloud) that creates new business models for vendors and consumers alike.
Many of these trends saw first light in 2008. But it 2009, I think we'll see their impact.
As well as a few technology surprises as well :-)
Best wishes, everyone, for a happy, healthy and productive 2009!
Chuck,
Wonderful blog on 2009 and I couldn't agree more. As usual, you've explained it all very clearly, I have just been calling these trends InformationAge2.0, but your blog explains it all in much more detail-- it's the second great wave of information trends and I really like where EMC is positioned.
Brian LaRose
EMC, Atlanta
Posted by: Brian | January 06, 2009 at 01:09 PM
Chuck, Great Blog.
Consolidation sounds logical but I think slow down also bring much faster innovation (not just in technology but in processes too).
Next few years we probably will see a big shift in DBMS technology. New companies in DBMS (much in Analytical workloads) are producing some great products.
Posted by: Anonymous | March 23, 2009 at 04:31 PM