I’ve been working on forecasting the IT and communications market today, having been able to finalise my Q4 estimates following Dell’s financial announcements last night. The trends many of us have been talking about for the last few years appear to be accelerating now. In particular telecom service and hardware markets appear sluggish in comparison with IT service and software categories (see Figure).
The main offerings in the forecast driving the changes at the category level are infrastructure software and cloud. Cloud itself is split in my work between infrastructure (IaaS/PaaS) and software (SaaS). These offerings are transforming the industry’s delivery models (channels, if you wish) and the way ITC products and services are paid for. Cloud computing is centralising multiple workloads from multiple clients and increasing the opportunity to pay for them more as Operational – as opposed to Capital – Expenditure. The strong historical growth in Infrastructure software purchases over the last decade have enabled IT resources to be virtualised, centralised and managed more easily than in the old hardwired-hardware days. While spending on infrastructure software hasn’t grown so much in the last couple of years, there’s been a strong shift towards enabling the allocation, management, monitoring and security of data held in a mixed environment of on premise and cloud resources – why a number of vendors are making lots of noise about ‘hybrid cloud’ solutions.
If I’m right users will be spending as much on IT services as they do on telecom services – and as much on software as they do on hardware; the change is due to simpler solutions unlocked by software, delivered by the cloud and paid for more as a metered service than something you need to buy in its entirety before you can get it to work.
About – this data is drawn from the ITCandor market model, which sizes and forecasts the ITC market every quarter by multiple dimensions.