COMMENTARY -- Presenting before a crowd of 6,500 IT executives at the Gartner Symposium ITxpo in Orlando, Gartner analysts used most of the current buzzwords -- service-oriented architecture (SOA), orchestration, business processes, process modeling, Web services, composite applications, orchestration, event-driven, etc. -- to formulate a framework for corporate software development that they said will significantly increase business "agility" and reduce costs. Basically, it was another paean to SOA. Gartner analyst Jeff Comport said that enterprises need to look beyond packaged applications. "A major transportation company received an update from their ERP vendor every 12 months, but it took them 9 to 12 months to deploy, " Comport said. "Users have to retake control of [software] architecture that had been abdicated to vendors." That architecture is SOA and Web services, orchestrated by a framework that is based on business process models. Software becomes a portfolio of capabilities, or services, rather than a collection of inflexible applications.
Gartner is predicting that by 2007 most companies will adopt SOA frameworks for new applications and have the infrastructure required for wrapping legacy applications and integration across processes. "With a services approach, companies can shift form large multiyear marathons to incremental development," said Gartner analyst Gene Phifer. He also envisions that business analysts, rather than programmers, will be able to create and reengineer business processes using SOA and business process modeling tools.
SOA is definitely the next big thing in software development, but reaching critical mass in the next two to three years is optimistic. Enterprises will need to change the way they think about applications and to develop new skill sets and tools, as well as spend money to create infrastructure to support the thousands of loosely coupled components replacing hundreds of more monolithic applications.
According to Gartner analyst Diane Morello, companies need people with a breadth of critical competencies. "Individual and organizational traits can predict superior performance. You need people with multiple competencies, like actors in theatrical repertoire company, with [skills] in information design, process design and relationship and sourcing management."
SOA is a one of the key elements -- along with virtualization, IP network convergence, outsourcing, wireless broadband, policy-based automation, RFID and mobile device advances -- in the battle to fix what's wrong with IT. According to Gartner, the major issues that these elements must address are:
Regarding the last item, Gartner analyst Al Lill said that massive vendor consolidation is inevitable. "In last six months, 420 software companies have disappeared. Currently, there are 1,800, but that's still 50- to 60 percent too many. By 2007, at least half of IT vendors will be acquired or will go out of business. Most of those companies will go away because they can't compete in the market, and a lot of good small companies will be snapped up by big monsters who dominate."
One of the fallouts of consolidation is that pricing power will revert to vendors in many sectors. "It's not likely to occur in the server market, where price competition is extraordinary, but the crazy discounts in higher-end networking are going to end," Lill said.
Gartner also predicts that companies failing to leverage virtualization technologies -- including desktop and server platforms -- for workload and resource management will pay up to 40 percent more in acquisition costs by 2008, and approximately 20 percent more in administrative costs, than those that take advantage of virtualization. However, issues around software licenses will need to be resolved. "Charging per machine or per processor won't work. An entirely new software charging model will emerge," said Peter Sondergaard, global head of research at Gartner.
By 2010, Gartner predicts, 40 percent of companies will have completely converged voice and data onto a single network, and more than 95 percent will have started the process. By 2010, 80 percent of companies will have integrated communications (voice, instant messaging, e-mail).
VoIP will cannibalize current local and long distance revenue, and the established players will have a hard time competing. Next year, for example, 30 new VoIP providers are expected to provide service in the U.S. alone, according to Sondergaard. However, relying on a single converged corporate network has a potential security drawback -- a single point of failure, Lill said. Unless that issue is clearly resolved, enterprises will continue to fund shadow legacy networks.
Somewhere around 2006 to 2007, wireless and broadband technologies will be established as standard components for most applications, Gartner predicts. WiMax (802.16), which has a wireless range of up to 30 miles, should gain traction around 2007, Lill said.
Issues such as end-to-end security, standardized devices, and coverage area will be "good enough," and advances in power management and display technologies, such as electronic ink, will lead to commercially viable next-generation mobile devices by 2007, Lill said. Electronic ink uses an electrically sensitive white chip that floats in a ball full of black dye to display black and white images. Electronic ink displays use less power than LCD displays and don't require backlighting for viewing.
Sondergaard estimated a modest 5 percent worldwide growth in IT spending for next year and noted two major economic challenges for the audience of mostly North American IT executives -- competition from emerging markets and the price of oil. Enterprises in developed economics will have to compete with world-class companies in countries such as India, China, Brazil and Thailand. Escalating oil prices, as well as the unpredictability of world events and rapid changes in markets, will create a level of uncertainty and cost that enterprises have to factor into planning. In fact, uncertainty about the economy is still a major concern that is impacting IT spending, as well as the amount of IT dollars that must go into the security and compliance buckets.
Sondergaard also said that hardware development will be driven more by consumer rather than business needs. The vast majority of semiconductors are going into consumer devices, and screen technology development is targeting TVs rather computers. The consumer sector is also dominating semiconductor usage, and Gartner predicted an installed base of 200 billion processors by 2013. Storage technology will continue to improve, with 1 terabyte-per-square-inch capacity by 2008.
But, the real productivity gains and potential cost savings will be realized by leveraging SOA, virtualization, and other technologies to automate repetitive tasks and business processes. At the same time, Gartner predicts that there will be no "safe havens" for many white-collar job functions, and recommends that IT workers upgrade their skills before their jobs are eliminated or outsourced to workers in lower-cost geographies. By 2007, Gartner predicts, spending on IT services delivered via globally sourced external resources (nearshore or offshore) will top $50 billion, which is 7 to 10 percent of total IT services spending.
You can write to me at dan.farber@cnet.com. If you're looking for my commentaries on other IT topics, check out my blog Between the Lines or my column archives.
