Monday, August 02, 2004

[news] Cognizant & the "Intelligent Internet" + a Peek at 2005 IT Budgets (Part 2 of 2)

Sunday, August 1, 2004
Dateline: China
Ah, the World Future Society.  Much to say about the WFS, but I'll save it for the end of this post.  An article which appears in the March-April 2004 issue of The Futurist was reprinted in a recent issue of Government Computer News (see ); the original paper which was the basis for The Futurist article is also available (see ).  The article focuses heavily on findings from the TechCast Project at George Washington University (see ; BTW, they're seeking beta testers).
The article acknowledges hype during the bubble, but goes on to indicate that 20 commercial aspects of Internet use should reach 30% "take-off" adoption levels over the next several years -- and will rejuvenate the (American) economy.  One area of particular interest is a "conversational" human-computer interface, called "TeleLiving," based on advances in speech recognition, AI, hardware/grid computing, virtual environments and flat wall monitors.  (Sounds like stuff out of PARC and Microsoft Research.)
Their Project results "portray a striking scenario in which the dominate forms of e-commerce - broadband, business-to-business (B2B), online finance, entertainment-on-demand, wireless, e-training, knowledge-on-demand, electronic public services, online publishing, e-tailing - grow from their present 5%-20% adoption levels to 30% between 2004 and 2010.  TechCast considers the 30% penetration level significant because this roughly marks the 'take-off point' when technologies move from their early-adopter phase into the mainstream, where they permeate economic and social life."  (Think of chasm crossing.  Also think of expeditionary marketing within the context of broadband.  BTW, bolded and colored items are MY emphasis.)
The authors discuss the notion that many think that the Internet is already mainstream, yet challenge that notion by stating that this is true only for nonpaying use, citing surfing for free information as one example.  "As of 2003, commercial operations involving monetary exchange were limited to about 23% for broadband, 10% for e-tailing, 12% for B2B, 10% for distance learning, and 5% for music.  And these are the most popular Internet applications.  Others hardly register in adoption levels at all."  Bottom line:  It's all about e-commerce, I guess.  Jerry Maguire said it best. 
A Look at 2005 IT Spending
Not as much as I had originally hoped for in the Forrester glimpse at 2005 IT budgets, but some things to note.  (See .)  Example:  52% of finance and insurance firms -- led by insurers -- will spend more on IT in 2005.  Okay, sounds like an opportunity for SIs (systems integrators) building .NET solutions.  (For those who don't know, Microsoft has fairly strong solutions for the insurance vertical.)  At the subvertical level, media and nongovernment public sector plays look good, whereas the utilities and transportation sectors look weak.  Also, Siebel and PeopleSoft customers are planning to spend more on IT relative to customers of other key vendors, most notably SAP.  (I don't see this, but I don't dispute their data.  Frankly, I think we'll see a lot of activity for SAP SIs in 2005.  P'Soft is too hard to tell, especially with the confusion caused by Oracle.  Oracle benefits whether the acquisition goes through or not!!  It's the FUD factor.)
Not to be outdone, AMR came out with their peek at 2005 budgets for SMEs (small and medium enterprises).  (See .  I got a lot more out of the AMR report.)  Something that is rather common knowledge among IT analysts, but may not be known by those not involved in the IT budgeting process, is that a typical large U.S. manufacturer spends 2% of its annual revs (i.e., revenues) on IT and a large service firm spends 5%.  However, the average for U.S. SMEs is 6.4% of revs, although a good chunk is for basic IT infrastructure.
CRM looks like a hot item for U.S. SMEs and the AMR report makes an interesting comment about the perceived need for other countries to implement a "keeping up with the Joneses" strategy.  This being said, then domestic firms in China may follow suit.  As far as operating systems are concerned, there is only one:  Windows.  And U.S. SMEs spend about 20% of their IT budget on software and software maintenance, with discrete manufacturers outspending process manufacturers or retailers.  Typical apps are for financial management and customer management, although expensive CRM suites (think Siebel or Oracle) are rare.  Sounds like an opportunity for utility computing vendorsBottom line:  If the SMEs market is your key market (by size), then go with Microsoft CRM solutions!
Fast Forward Over Three Decades
At this point, I'm going to get a bit personal.  If you're not interested, simply skip the remainder of this message:  It briefly covers three decades and my so-called "futurist" origins.
The first "adult" organization I ever joined was the World Future Society.  (Remember, the basis for the first section of this posting was an article published in their flagship publication, The Futurist.)  The year was 1971.  I had been an adolescent "futurist" since March 1968, the month that my father bought me a copy of Sky & Telescope magazine.  Although the Vietnam War was on the news each night, I was simply too young for it to really matter.  Both the war and protests against the war were merely uninspiring TV images.
But something caught my imagination and that "something" was the space program.  I can still recall the liftoff of Apollo 11 on July 16, 1969 at 6:32 am PDT.  Believe it or not, I can still recite the countdown.  I can also recite part of the landing sequence of the Eagle -- the Lunar Excursion Module housing Neil Armstrong and Edwin E. "Buzz" Aldrin.  And, of course, I can remember Neil Armstrong stepping off the foot of the LEM on July 20th, probably around 7 or 7:30 pm.  Two movies also inspired me toward a "tech" future:  The obvious, 2001: A Space Odyssey, and the not-so-obvious, The Andromeda Strain.  (My parents didn't let me stay up to watch Star Trek, so Star Trek didn't have any impact on my life during my early adolescence.)  Although I have been a member of the L-5 Society and the British Interplanetary Society (anyone remember Project Daedalus?), the World Future Society was the most influential organization in my life during my high school years.  Well, a wee bit of personal history.  Those were the good 'ol days ...
David Scott Lewis
President & Principal Analyst
IT E-Strategies, Inc.
Menlo Park, CA & Qingdao, China (current blog postings optimized for MSIE6.x) (access to blog content archives in China) (current blog postings for viewing in other browsers and for access to blog content archives in the US & ROW) (AvantGo channel)
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