IDC details IT challenges for 2006

The Google effect, among other influences, will be more keenly felt by IT chiefs

Google has forced firms to rethink their business models

Analyst IDC predicts challenges ahead for IT managers, as the shift towards IT as a service speeds up, and “disruptive business models” spread.

IDC made the forecast in its annual report on trends for the coming year. The firm expects IT spending growth to drop slightly from six percent to 5.5 percent as the industry concentrates more on innovation rather than mature technologies.

IT managers also need to be prepared for possible changes in the vendors supplying them with technology products and services, said IDC. It predicted that the current level of merger activity will carry on into next year, as the industry moves from a product-driven sales model to one more based on a service model.

“The IT and telecoms industry convergence, consolidation and realignment of the past two years will continue in full stride in 2006,” forecast Frank Gens, senior vice-president at IDC.

Gens added that the growth of disruptive business models will also be a big influence on enterprise IT. “[This includes] open innovation in IT product and service development – ‘the open-source effect’, and online delivery of IT as a service – ‘the Google effect’,” he commented.

IDC added that the “Google effect” will force more established firms to rethink their business models and reorganise.

Suppliers of hosted or on-demand technology, such as Salesforce.com with its customer relationship management (CRM) tools, will continue to be successful in 2006, IDC predicted. It also expects to see more on-demand applications offered by the likes of SAP, Microsoft and Oracle.