Outlook on IT spends for next fiscal

We might be coming out of an economic slowdown, but we're still not home and

dry. According to a survey we've conducted with IDC recently (read “Enterprise

IT Purchase Strategies 2010- 2011”, page no 28. ), exponential growth in

business volumes is still not a priority for most large enterprises in the

country, at least not over the next 12 months. Their top business priorities are

still to reduce operational cost, improve productivity and enhance customer

services. Maybe (and hopefully) we will see a change in priorities to more

aggressive expansion plans as the months go by, but not now.

So you're not alone if your organization is not focusing on exponential

growth for next year. Most industries, be it BFSI, healthcare, manufacturing,

IT/ITES, and many others we surveyed, are in the same boat as you. Moreover,

your organizations would be more cautious with respect to their topline growth

and profit margins, which would put a direct impact on your IT spends.

While business growth may not be a priority, IT certainly is, which is a good

sign. The IT spends are likely to rise by 10% next year over the current fiscal.

Another good sign is that adoption of new technologies is also on the cards for

most CIOs. The BFSI segment continues to remain the mega-spender in the next

year as well amongst all other industries that were surveyed.

Key technologies being looked at aggressively for next year by most large

enterprises are DR and BCP, data center build-up, Unified Communication,

Virtualization and BI & Analytics. It's not very difficult to determine the

reasons for choosing some of these technologies. They gel well with the overall

business priorities I mentioned earlier. Virtualization and UC for instance, are

the clear cut answer to cost saving. They help reduce server clutter and travel

costs. BI is a clear cut answer to enhancing productivity, allowing employees to

work smarter and manage their information more effectively. Data Center build-up

could be looked at as a way of saving cost, or even for compliance and

regulation, considering that these are large and very large enterprises we

reached out to, who're likely to have hundreds, maybe thousands of servers in

their data centers. They could upgrade their data centers, or even setup new

ones.

The last thing being considered by most large and very large enterprise CIOs

is not a technology, but important nevertheless--managed services. In fact, CIOs

are planning to reduce their hardware budgets and increase their services

budgets next fiscal. A CIO I interacted with recently gave me an interesting

perspective to this. He said that he does not consider his servers as hardware,

but a service. It was his managed services partner's job to manage the hardware,

and ensure that the servers provided uninterrupted services. So possibly, a lot

of organizations will outsource their servers and other hardware as a service.

Hope you have a great new financial year ahead, and read our story on

enterprise IT purchase strategies for 2010-11 to know more about what your

industry is likely to do next fiscal.

Anil Chopra



Editor anilc@cybermedia.co.in