Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with written approval from Gartner.Such approvals must be requested via e-mail: vendor.relations@gartner.com.Gartner is a registered trademark of Gartner, Inc. or its affiliates.

The 2008 Gartner Scenario: Current State and Future Directions of the IT Industry

Ken McGeeDale Kutnick

Gartner Role Service DirectorsGartner Emerging Trends Group

Trends

• Most clients have already started IT cost-cutting programs.

• CIO profiles and responsibilities are changing.

• Overall modest CIO budget growth was going to continue until…

Key Issues for 2008 and 2009

What economic and business trends will prevail during 2008 and beyond?

What will be the most-contentious IT issues in 2008 and 2009?

Which longer-term trends will unfold within the IT industry?

During the next two years, IT's greatest opportunity to significantly improve overall

enterprise operational performance will unfold from successfully navigating a recession and resolving the "nine most-contentious issues."

During the next two years, IT's greatest opportunity to significantly improve overall

enterprise operational performance will unfold from successfully navigating a recession and resolving the "nine most-contentious issues."

Selected 2008 National GDP Forecasts

% EqualsChange Over

2007

% EqualsChange Over

2007

+1.5%+1.5%

+0.8%+0.8%

+2.3%+2.3%+9.9%+9.9%

+1.1%+1.1%

+1.0%+1.0%

+0.9%+0.9%

+7.5%+7.5%

+2.7%+2.7%

+4.3%+4.3% +5.8%+5.8%

+6.3%+6.3%

+6.5%+6.5%

+7.3%+7.3%

World GDP 2008 World GDP 2008 +3.0%+3.0%Source: Global Insight +2.8%+2.8%

Early 2008 and 2011 Views From CEOs

Somewhat Confident

Don't Know/ Refused

Not Very Confident

Very Confident

Not Confident At All

50

40

7

2

1

43

49

6

1

2

"How Would You Assess Your Level of Confidence in Prospects for the Revenue Growth of Your Company?"

"How Would You Assess Your Level of Confidence in Prospects for the Revenue Growth of Your Company?"

Source: PricewaterhouseCoopers Global CEO Survey

Next 12 Months

Next 3 Years

Selected 2009 National GDP Forecasts

% EqualsChange Over

2008

as of 10/14/08

% EqualsChange Over

2008

as of 10/14/08

World GDP 2009 +2.1% (Down From 2.8%)World GDP 2009 +2.1% (Down From 2.8%)

+0.9%+0.9%

+1.0%+1.0%

+8.4%+8.4%

- 0.4%- 0.4%

+0.4%+0.4%+0.4%+0.4%

+7.0%+7.0%

+2.5%+2.5%

+3.0%+3.0%+5.8%+5.8%

+5.5%+5.5%

+4.9%+4.9%

+6.4%+6.4%

+0.2%+0.2%

+6.3%+6.3%

+0.2%+0.2%

+1.7%+1.7%

+2.8%+2.8%

+8.9%+8.9%

+0.1%+0.1%

+1.4%+1.4%

+0.5%+0.5%

+7.8%+7.8%

+2.9%+2.9%

+4.2%+4.2% +5.7%+5.7%

+5.5%+5.5%

+6.4%+6.4%

Yellow = August 2008 EstimatesRed = October 2008 Estimates

Source: Global Insight

EuropeFinland

Sweden

Norway

Ukraine

Romania

Belarus

Estonia

Latvia

LithuaniaDenmark

Poland

CzechRep

Slovakia

HungaryAustria

Germany

Netherlands

Belgium

France

Italy

Spain

Portugal

UnitedKingdom

Ireland

Iceland

Greece

Bulgaria

Luxembourg

Switzerland

Moldova

Albania

Macedonia

Serbia

Montenegro

Bosniaand

Herzegovina

CroatiaSlovenia

Liechtenstein

+0.4%

+1.4%

+1.9%

August 2008

October 2008

October 2007

Changes in Selected GDP Growth Projections

Financial Crisis Takes Harsh Toll on Europe By Dora Iakova IMF European Department

October 21, 2008

In advanced Europe, a mild recession is expected in the near term.

Source: IMF

Financial Crisis Takes Harsh Toll on Europe By Dora Iakova IMF European Department

October 21, 2008

In advanced Europe, a mild recession is expected in the near term.

Source: IMF

Source: Global Insight

IT Spending for 2009 Was Looking Positive, Until…

Source: BBC

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Com

putin

gH

ardw

are 

Sof

twar

e

Ser

vice

s

Tele

com

Ove

rall

Worldwide IT Spending 2008: Results of Official Gartner Survey versus Gartner October Estimates

By IT Segment

2008 WW IT Spending $3.504 Trillion (Gartner Survey Results as of September 2008)

2008 Revised WW IT Spending $3.444 Trillion (Gartner October 2008 Estimates)

As of 10/12/08

These Numbers Will Change

Source: Gartner

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%C

ompu

ting

Har

dwar

e 

Sof

twar

e

Ser

vice

s

Tele

com

Ove

rall

By IT Segment

2009 WW IT Spending $3.708 Trillion (Gartner Survey Results as of September 2008)

2009 Revised WW IT Spending $3.522 Trillion (Gartner October 2008 Estimates)

As of 10/12/08

Source: Gartner

These Numbers Will Change

Worldwide IT Spending 2009: Results of Official Gartner Survey versus Gartner October Estimates

Forecast End-User Spending on IT Products and Services for 2008 versus 2008 Revised

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

United States Canada Latin America Middle East &

Africa

Japan Asia/PacificWestern Europe

Central/Eastern Europe

2008

2008 Revised

2008 WW IT Spending $3.504 Trillion (Gartner Survey Results as of September 2008)

2008 Revised WW IT Spending $3.444 Trillion (Gartner October 2008 Estimates)

By Geography

As of 10/12/08

These Numbers Will Change

Source: Gartner

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

Forecast End-User Spending on IT Products and Services for 2009 versus 2009 Revised

2009

2009 Revised

United States Canada Latin America Middle East &

Africa

Japan Asia/PacificWestern Europe

Central/Eastern Europe

2009 WW IT Spending $3.708 Trillion (Gartner Survey Results as of September 2008)

2009 Revised WW IT Spending $3.522 Trillion (Gartner October 2008 Estimates)

By Geography

As of 10/12/08

These Numbers Will Change

Source: Gartner

Increases in CIO Budgets Over Previous Year 1997 to 2009 (WW and by %)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20081998

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20072006200520042003200120001999

= Trend Line

15.0% 15.9%

9.7% 10.1%

2002 2009

1.3%

0.0%

1.6% 2.5% 2.7%3.2%

3.0%2.3%

EXPThese Numbers Will Change

Source: Gartner

Some Hope??? What Recession???

WW Revenue CQ2 2008-CQ3 2007

WW Revenue CQ2 2007-CQ3 2006

Toshib

a

Nokia

Mic

roso

ft

Oracl

e

Accen

ture

Google

0.0

20,000.0

40,000.0

60,000.0

80,000.0

100,000.0

120,000.0

HPIB

MDel

lEDS

CSCSAP

Rev

enue

12.4%

10.2%

14.8% 40.3%

9.9%18.2%

24.6% 3.6% 20.0% 46.0% 13.0% 38.9%

Source: Company Information

Gartner's Top IT Predictions for 2008

• By 2011, Apple will double its U.S. and Western Europe unit market share

• By 2012, 50% of traveling workers will leave their notebooks at home in favor of other devices

• By 2012, 80% or more of all commercial software will include elements of open-source technology

• By 2009, more than one-third of IT organizations will have one or more environmental criteria in their top six buying criteria for IT-related goods and services

• Through 2011, the number of 3-D printers in homes and businesses will grow 100-fold over 2006 levels

• By 2010, end users' preferences will decide as much as half of all software, hardware and services acquisitions made by IT

• By 2012, at least one-third of business application software spending will be as service subscription instead of as product license

Key Issues

• What economic and business trends will prevail during 2008 and beyond?

• What are the most contentious IT issues for each IT executive?

• Which longer-term trends will unfold within the IT industry?

© 2008 Gartner, Inc. All Rights Reserved.

Executive indecision has halted IT's contribution to business in five vital areas.

Honore Daumier. Chess-Players. c. 1863-1867. Oil on panel. Musée du Petit Palais, Paris, France.

ITIT EXECEXEC

****

Delivering projects that enable business growth 1 1 1

Linking business and IT strategies and plans 2 2 2

Attracting, developing and retaining IT personnel 3 4 5

Improving the quality of IS services 4 7 12

Improving the business and IT relationship 5 * *

Implementing IT process improvements 6 12 *

Improving IT governance 7 8 9

Building business skills in the IT organization 8 9 3

Use of information/intelligence in ops, products or service 9 6 *

Reducing the cost of IT 10 12 *

IT Executive: CIO (2008 CIO Strategies)

Issue: Business expectations for IT have outstripped IT's internal capability to deliver

Issue: Business expectations for IT have outstripped IT's internal capability to deliver

To what extent will each of the following be a top five priority for you in 2008?

* New question for 2008 ** New question for 2007

2008 2007 2006

ITIT EXECEXEC

**

Issue: "How do we more-rapidly modernize I&O and reduce costs?"Issue: "How do we more-rapidly modernize I&O and reduce costs?"

Service Quality Economics

Agility

Infrastructure and Operations Excellence

Computing 25%Networking 35%Storage 50%

Capacity: High Annual Growth Rates

Respond faster to the business

Higher and more consistent levels Legacy:

Disproportionately high TCO

Meet needs of new apps: SaaS, SOA, AJAX, RIA …

CAUTION: Any resemblance of new apps needs to old is purely coincidental!

CAUTION: EVERYTHING is

interdependent (I&O systems, apps…)

Accelerating need to modernize IT

Relentless pressure to reduce costs: I&O: 70% of IT budget Economic downturn

Platform obsolescence

ITM Checklist Holistic, strategic approach Designate ITM "czar"

Look for "self-funding" projects Utilize Gartner maturity models

IT Leader: Infrastructure & Operations

ITIT EXECEXEC

**

IT Leader: Security and Risk Management

Budget $

Business UnitOperations

Translate IntoControl

Requirements

Express Risk in

TechnicalTerms

Express Acceptable

Risk

Explain RiskWithout

Technical Terms$

$$$$$$$$$$

OpportunityRisk

Issue: Business accountability for security and risk managementIssue: Business accountability for security and risk management

ITIT EXECEXEC

**

IT Leader: Business Intelligence and Information Management

Information Access and Analysis

Controlled/Qualified

Information Access and AnalysisOpen/Unqualified

Decision-Making Process Structured

Decision-Making Process

Autonomous

The Decision Factory The Information Buffet

The Brave New WorldThe Hypothesis Explored

AlignOptimize

Innovate

Discover

MeasureManage

Formulate

Experiment

Issue: Lack of business intelligence sponsorshipIssue: Lack of business intelligence sponsorship

ITIT EXECEXEC

**

UserUserUserUser

"The vendor said it was no problem!"

"The vendor said it was no problem!"

IT Leader: Sourcing and Vendor Relationships

"It was never in their contract!"

"It was never in their contract!"

VendorVendorVendorVendor

Issue: "How do I get my vendor to deliver what they promised?"Issue: "How do I get my vendor to deliver what they promised?"

ITIT EXECEXEC

**

IT Leader: Enterprise Architect

"Service Management" — Orchestrating appropriate assets and competencies to ensure the right services are offered at the right price and quality levels to meet business goals.

"Enterprise Architecture" — The process of translating business vision and strategy into effective enterprise change by creating, communicating and improving the key principles and models that describe the enterprise's future state and enable its evolution. The scope of the enterprise architecture includes the people, processes, information and technology of the enterprise, and their relationships to one another and to the external environment.

"BPM" — BPM is a management practice that provides for governance of a business process environment toward the goal of improving agility and operational performance.

Start with these core IT management disciplines:

Issue: TurfIssue: Turf

ITIT EXECEXEC

**

Time

Inh

ibito

rsIn

hib

itors

• Agility, speed-to-market• Maintenance cost consumes capacity for

discretionary investment• Staffing and skills crisis• Disappearing ISVs• Hardware and software stack obsolescence

• Cost and resources required to migrate to modern application environment

• Dependence on specialized and localized capabilities

• Diffused business case, no sponsors

• Short-term focus Drivers

Issue: "Should we modernize our applications? If so, when?"Issue: "Should we modernize our applications? If so, when?"

IT Leader: Applications Manager

ITIT EXECEXEC

**

IT Leader: Business Process Improvement

Depiction of Roles for a Well-Developed BPM Program

Issue: "To whom should business process professionals report?"Issue: "To whom should business process professionals report?"

ITIT EXECEXEC

**

IT Leader: Program and Portfolio Manager

Program and Portfolio Management Activity Cycle

Define

SelectExecute

Evaluate

Evolve

Define• Develop and refine analysis of candidate investment• Define success metrics• Develop business cases

Select• Define the project portfolio investment framework• Prioritize projects and programs• Authorize and initiate projects

Execute• Plan and manage scope, effort and quality• Identify and manage risks• Manage change• Coordinate resources across projects

Evaluate• Review projects and programs• Measure business outcomes• Evaluate work processes• Assess the organization

Evolve• Evolve the organization and function• Refine governance structures and processes• Develop skills and competencies• Evaluate new tools and standards• Plan for the future

Communicate• Set and manage expectations• Enable effective interaction and

collaboration• Report progress to goals

Communicate

Issue: "How much formal process is needed for PPM?"Issue: "How much formal process is needed for PPM?"

ITIT EXECEXEC

**

Whose Move Is It?

IT Leader IT ExecutivesIT Leader IT Executives

1. CIO

2. Infrastructure and Operations

3. Security and Risk Management

4. Business Intelligence and Information Management

5. Sourcing and Vendor Relations

6. Enterprise Architect

7. Applications Manager

8. Business Process Improvement

9. Program and Project Management

1. CIO

2. Infrastructure and Operations

3. Security and Risk Management

4. Business Intelligence and Information Management

5. Sourcing and Vendor Relations

6. Enterprise Architect

7. Applications Manager

8. Business Process Improvement

9. Program and Project Management

******

****

**

******

Whose Move Is It?

IT Leader IT ExecutivesIT Leader IT Executives

1. CIO

2. Infrastructure and Operations

3. Security and Risk Management

4. Business Intelligence and Information Management

5. Sourcing and Vendor Relations

6. Enterprise Architect

7. Applications Manager

8. Business Process Improvement

9. Program and Project Management

1. CIO

2. Infrastructure and Operations

3. Security and Risk Management

4. Business Intelligence and Information Management

5. Sourcing and Vendor Relations

6. Enterprise Architect

7. Applications Manager

8. Business Process Improvement

9. Program and Project Management

******

****

**

****

******

******

Key Issues

• What economic and business trends will prevail during 2008 and beyond?

• What are the most contentious IT issues for each IT executive?

• Which longer-term trends will unfold within the IT industry?

Technology Trigger Peak ofInflated ExpectationsTrough of Disillusionment Slope of Enlightenment Plateau of

Productivity

time

visibility

Years to mainstream adoption:

less than 2 years 2 to 5 years 5 to 10 years more than 10 yearsobsoletebefore plateau

As of July 2008

Location-Aware Applications

SOA

Tablet PC

Electronic Paper

WikisSocial Network Analysis

Idea ManagementCorporate Blogging

Virtual Assistants

Service-Oriented Business Applications

Web 2.0

RFID (Case/Pallet)

Public Virtual Worlds

Video TelepresenceSocial Computing Platforms

Green IT

Microblogging

3-D Printing

Surface Computers

Augmented Reality

Mobile Robots

Behavioral Economics

Cloud Computing

Context Delivery Architecture

Erasable Paper Printing Systems

Solid-State Drives

Basic Web Services

Emerging Technologies 2008-2009

# 1.

# 2.

# 3.

# 4.

@# 5.

# 6.

# 7.

# 8.

# 9.

# 10.

CNN Top 10 Innovations as of 2005

HPCC Grand Challenges

"Grand Challenge means…

a fundamental problem in science or engineering, with broad economic and scientific impact, whose solution will require the application of high-performance computing resources and multidisciplinary teams of researchers."

"Grand Challenge means…

a fundamental problem in science or engineering, with broad economic and scientific impact, whose solution will require the application of high-performance computing resources and multidisciplinary teams of researchers."

Forecasting Weather

Cancer

Superconductors

Air Pollution

Aerospace

Energy Conservation

Microsystems

Earth's Biosphere

High Speed Networks

Education

No Batteries Storage

ProblemProblem

ProblemProblem

ProblemProblem

ProblemProblem

CPUCPU

CPUCPU

CPUCPU

CPUCPU

Inst

ruct

ions

Parallel

Parallel

Parallel

Parallel

Parallel Programming

Non-Tactile ComputingTranslating

IT Investment of $X = + $0.04 EPS by 2Q09IT Investment of $X = + $0.04 EPS by 2Q09IT Investment of $X = + $0.04 EPS by 2Q09IT Investment of $X = + $0.04 EPS by 2Q09 IT and Business

Issue: "What are IT's Grand Challenges in 2008?"Issue: "What are IT's Grand Challenges in 2008?"

Programming x 100

IT Grand Challenges in 2008: Its Time To Engage in Long Term IT Planning Again

Your Next Steps

CIOs Must Resolve Top 25 Most Contentious Business/IT Issues by 1H09…

• Today (or by Monday Morning)

- Identify Top 25 most contentious business/IT issues

- Specify people who must "own" the resolution of each issue

• Near Future (The Next 12 Months)

- Conduct "Business/IT Contentious Issue Negotiation" sessions

- Complete "Business/IT Treaties" of cooperation

- Clear these issues to Prepare for the “New Future”

• Longer Term (2011 and Beyond)

- Review treaties for effectiveness every three years

Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with written approval from Gartner.Such approvals must be requested via e-mail: vendor.relations@gartner.com.Gartner is a registered trademark of Gartner, Inc. or its affiliates.

The 2008 Gartner Scenario: Current State and Future Directions of the IT Industry

Ken McGeeDale Kutnick

Gartner Role Service DirectorsGartner Emerging Trends Group

Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with written approval from Gartner.Such approvals must be requested via e-mail: vendor.relations@gartner.com.Gartner is a registered trademark of Gartner, Inc. or its affiliates.

The 2008 Gartner Scenario: Current State and Future Directions of the IT Industry

Ken McGeeDale Kutnick

Gartner Role Service DirectorsGartner Emerging Trends Group