I am now at IDC Press Conference about the Israeli and international IT and Media markets.
I will live blog from there – stay tuned…
Israel’s IT per capita expenses is a bit behind Ireland, but in GDP numbers we are in a good position. Our market is not going to grow too much. we have 168K tech workers. IT market has 28K employees, and the industry will moderately develop next years. Most organizations in Israel are very small, but most of the expenditure is done by the largest ones. Public sector have 29% of the market, especially defense contracts.
2008 predictions – software is the the leader, though still below 1 billion dollars. Storage would slow down as the numbers are declining. In the next five years, half of future IT expenditure are in large organizations. The SOHO – SMB will increase its expenditure as well. Small office does not get the proper attention in integration and products. SaaS and telecom providers can change this market.
IBM and HP are moving to the SMB market. Green IT is gaining ground. The biggest challenge for CIOs is management of different platforms they need to handle.
Moti Polak from IDC is now talking about CIOs input.
IDC are doing surveys, morning meetings with CIOs and seminars. CIOs can get their market position in context of the market, and use it as a tool for internal discussions.
Three interesting surveys:
1. Virtualization – getting more and more popular, in both large and mid size organizations. Virtualization helps IT managers to have flexible systems and disaster recovery. This area has issues with selling virtualization internally, as the ROI is not in his area (mainly electricity and such, areas that are not in his domain). There are also issues with managing virtual environments
2. Open source – Linux is becoming more and more popular, due to cost saving on software, better performance and better resource utilization. competing with Unix more than with Linux
3. DRP – still very low in Israel. Only in cases where regulation plays a role such as banking the situation is great. In non regulated fields
4. Outsourcing – companies are not willing to base on a single company. Most contracts are signed for one year, and things are not as clear as in the past.
Dan Yachin talks about emerging technologies.
The main problem of software is its inflexibility to adjust to changes in the business and technology environment. Also there is lack of collaboration inside the organizations, development cycles are too long, inconsistency between environments, no cross platform processes, too many bugs, security is an important problem, salability issues, bad UIs.
Business needs – most CIOs are worried form integrating information from various sources.
IDC believe that the need is to build dynamic applications that will be built for customization. This is achived by various trends:
1. Web 2.0 in the enterprise – give power to the end user to create his own UI and environment. How does that work with Enterprise 2.0? Give the enterprise user the ability to build his own environment. applications are mashups, Flash and Ajax helps creating better UI, social networks help to get information internally, the same for blogs. Mashups and wikis are still not adopted in large numbers.
2. SaaS – 91% are going to adopt it, which will change the way that the market behaves. Smaller companies can get market share, which will change the ecosystem. SaaS value driver will be integration between the small players to create a unified solution to customers. that’s why business development is THE key for market leadership.
3. SOA helps to create a more modular applications, and push this market forward.
How would things work together? they would create an environment of dynamic applications. IDC believe that there is a long tail also here, and small companies can create its vertical applications, as long as it is based on the big guys platforms. Google and Amazon are in this game or sure.
Media update by Gilad Nass
Laptops are still too expensive to be household product, but in the next years we will see more and more laptops, most of them are from friends and family. 67% of houses has at least one computer, 30% of new computers are bought to add another computer. 60% are surfing the web for more than an hour. Another amazing info is that 50% are not using VoIP, but 8% are using it on their mobile devices, either PDA or mobile smartphone. Next year mobile operators will go into wireless broadband based on cellular or WiMax.
Regulators are going to do a lot of noise – naked ADSL should be approved, quad play in Bezeq group, bundled services.
WiMax is looming but not clear that it will happen, and Pelephone are going to UMTS. That will affect Motorola and Samsung, and would increase its expenditure on customer acquisition. iPhone won’t be a great success here.
Israelis would download more media online, as there is no way to do it legally.
UGC would decline, professional content would get into the market. Broadcasters would increase their online presence. IDC do not see the mid tail and semipro content as a market segment. They also believe that regulators will go into this field, and some will try to take money on content. ALL SURVEYS SHOW THAT PEOPLE ARE WILLING TO PAY FOR GOOD CONTENT.