In this blog I look beyond the obvious and try to find out why people and companies do what they do - and what it means for the rest of us. 
ESG’s annual IT spending survey is about to be published to clients, but it’s so good I’m going to give you a sneak peak into what we found. (Note: if you are a legitimate IT pro, by registering for free on our site – and not lying through your teeth, you get almost all of this enormously valuable stuff for no cost. We also give our stuff away to the media. Non-ESG vendor clients, well, sorry!)
The survey is of North American and Western European IT managers (over 500) responsible for evaluating, purchasing, and/or operating corporate IT in “medium” (500-999 employees) and “enterprise” (1000+ employees) companies.
There is good news, bad news, and interesting news to discuss.
The good:
- The majority of organizations say spending will increase year over year.
- Cautious optimism reigns – people have moved themselves out of cost “reduction” mode and placed themselves in cost “containment” mode. Without boring you with the details – this means spending “strategically” is going up – sometimes WAY up.
- Security, Compliance, and Business Intelligence initiatives are all seeing increased spending. These areas are also being used to justify additional IT spending. They are levers for other initiatives.
- There will be big increases in spending in Virtualization, Security, and get this…….Storage! Swear to god.
The bad:
Cloud is nowhere still. It ranks near the bottom of the list of priorities for 2010. The much hyped amorphous topic will remain a niche play and mostly a marketing mantra in 2010. This doesn’t mean I’m not all for the cloud – but I gotta tell you what the people are saying. No need to panic – it took Virtualization a while to get going too!
The interesting:
When given a list of 25 IT priorities to order, the top four “most important” are:
- Increase usage of server virtualization. No real surprise here, as it is widely deployed but not “deeply” deployed. Looks like that will change in 2010. Probably good for VMware’s stock.
- Information security initiatives. What’s surprising here is that after all the “duh, I told you so” stuff we’ve seen over the last five years, it appears people are finally afraid enough of sending your information to bad people to do something about it. This industry has been the wild wild west for a long time, and maybe now we’ll see some shape start to form in this big money market.
- Improve data backup and recovery! Awesome. After 87 years this STILL makes the top three! $5B spent every year, year after year, on this stuff and we still can’t get it right!!! This is my kind of market. What’s it mean for industry? It means there is a new breeze a blowin’ – the same old crappy, expensive, awfully licensed software you’ve been selling is under siege – and those who have a better way to skin the cat are going to get their 15 minutes. Lot’s of money at stake in 2010 in the data protection world.
- Upgrade network infrastructure. This hits the top 4 with a bullet. 10GbE, converged networking (FCoE), etc. mean IP will squeeze the daylights out of fibre channel (or at least start to in earnest) this year – as well as create tons of new catalyst events for Cisco wanna-bes. If server virtualization was a rallying cry for infrastructure changes in the data center in 08/09 – look at the network to light it on fire.
In the down times where everyone is looking to cut everything, SaaS offerings were high on the spending intention list – but this year, as things seems to have stabilized, SaaS is down at the very bottom. To me that’s crazy, but it shows the ways of the human psyche – if people are worrying less about opex/capex, they go right back to their old habits – crazy as that is.
You’ll see a big resurgence in strategic IT spending. In the words of Steve O’Donnell, things that reduce IT “cycle time” will get far more attention – and funding – from the business than things that just “cut costs” in 2010.
Not from our research, but fascinating just the same: Men’s underwear sales are an indicative of the overall economy. Men don’t buy underwear (since we keep them for decades anyhow) unless they feel good about spending. It’s true. Underwear sales are at an 18 month high, I’m told.
There will be more to follow. Data, that is.
Related posts:
- Come Learn Some Interesting Stuff about Virtualization – Right Down the Street
- Killer Cloud App: Virtual Desktops
Tags: Cloud, data backup, ESG Research, IT spending, networks, recovery, SaaS, security
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I am not @ all surprised there’s little to no adoption of the cloud. I am not an ignorant man, but I personally don’t see it solving any business issues. High performance and questionable availability aren’t really hand in hand from a business perspective. From a lot of blogs I’ve read a lot of cloud service providers aren’t ready for the big show quite yet.
You will always have the issue of the network connection to the cloud as well. This and encryption is the #1 reason WAN based backups will never really take off in the enterprise. Our rate of change is bigger than our total bandwidth + outage window. If a telecom company dedicated a connection to the cloud carrier I could see businesses jumping all over it. Say for example L3 and Amazon teamed up and sold a moderately priced point to point ds3 in the contract would make it more appealing than just “here’s your login, enjoy.”
Another issue is an API/SDK. You’re pretty committed @ some point with the carrier you choose. If your carrier relationship goes sour, all development efforts are instant vaporware unless you shell out a considerable amount of money for an intermediary API which takes one kind of code in and pukes out anything.
As for backups, a lot has changed in windows and the software lately. VSS and SAN integration have finally made friends and should play nice now. The investments in backups are long overdue simply based on the fact that the storage subsystems are catching up with technology. The other big thing is that storage is cheap and fast, making it easy to use so it’s probably time for people to right-size their backups to fit all the data they’ve grown so comfortable with. In a couple years all the rage will be automation to (retroactively) deal with all the content and bring us back to planet earth. Bare metal restores are FINALLY (WTF?) getting to be a reality.
> I am not @ all surprised there’s little to no adoption of the
> cloud. I am not an ignorant man, but I personally don’t see it
> solving any business issues.
@ScottL…. Are you kiddin’ me? You weren’t by any chance the guy with
the accent in this, were you?
http://www.youtube.com/watch?v=C3tjVHQLQ4A
If you are interpreting my implied (and I thought assumed) definition of cloud as something like virtualization well then that’s just silly. Virtulization is pretty much mandatory in this day and age. I am talking about the web hosting platforms. I should have specified HOSTED cloud.
Do I really need to post the hundreds of these (http://gigaom.com/2008/07/20/amazon-s3-outage-july-2008/) to backup my comments? Businesses can’t stand outages. Businesses need their data available and secure, both things the cloud environments of today sidestep in their agreements and apparently in practice. I hear a lot of people using cloud for backups. I don’t think my company can miss a day of backups can yours?
here go crazy
http://status.mosso.com/
@ScottL… Actually no, I was’t assuming that by “cloud” you meant “virtualization” in your comment, and I agree with you about how missing the value proposition of virtualization would be a very silly thing to do indeed. I will have to remain on the fence regarding your distaste for such things as Amazon S3, as I don’t really hold any strong opinions about whether that particular service is worthwhile or not. I do think the IaaS and PaaS models as they are typically defined sit rather too low down the stack to be of general interest to the broad population. Most of the members of my family would have little use for a Virtual Machine in the cloud, but they seem to like FaceBook well enough!
Whether IaaS/PaaS services may one day become interesting to corporate IT departments is a good question. You seem to think no, whereas I’d say it was indeed a little speculative, but by no means an absurd notion. FWIW, I’m sure Amazon will ultimately work through whatever reliability issues they have been suffering, and lets be honest here, traditionally implemented internal IT infrastructures have been known to have their outages too, and in some cases, they have track records that make Amazon’s track record look like a CEO’s dream come true.
However, where I do think you would once again be “silly” to say that cloud solved no business issues, is up at the SaaS layers. I won’t bore you with all the reasons why I think that is, but if you’re interested, most of them are similar or identical to ones articulated in the below by Marc Benioff, the CEO of SalesForce.com, and arguably the Billy Mays (God rest his soul) of SaaS. In case you’re wondering, I don’t know Marc Benioff, I’m not an employee of SalesForce.com, and I don’t even own any of their stock (fool that I am!
), but I do think the man makes many points about SaaS and cloud that are difficult to dispute.
http://www.youtube.com/watch?v=QMzKTeiKGnQ&fmt=18
I would only add that if you were thinking of deploying your own internal infrastructure to provide your company with something like e-mail in this day and age, then well, why stop there? Ya might as well generate your own electricity too!
http://trust.salesforce.com/trust/status
I won’t point out the frequent service outages and degraded states. 300ms is ridiculously long for any query or page to be rendered which is their accepted average. The video didn’t really cover any reasons to adopt a cloud model, just a bunch of enthusiastic buzzwords. The part where Dell went up front and showed their dashboard could be developed and run from a cloud or a vm on my desktop nothing really compelling to use cloud over anything else.
I guess @ the end of the day there’s a debate on which platform to run systems on. The other debate would be to use a hosted solution versus homegrown versus a box with a CD in it.