The PAC Group (Pierre Audoin Consultants) published its predictions at the end of last year. They focus particularly on the future of the IT market in Europe and fall into seven main categories:
1. Growth in Europe will be slower than in other regions
PAC expects IT expenditure in Europe to rise by about 2.5% in 2014. That’s significantly less than the growth rates predicted for other regions: 6% in North America, 7% in Asia-Pacific, and just under 10% in both Latin America and the Middle East. Nevertheless, with IT spending growth in Europe having fallen behind expectations in 2013, PAC’s prediction for the coming year represents a slight recovery.
2. Cloud, analytics, mobility: spending on trending topics will soar; expenditure on legacy IT is set to plummet
Considering the buzz attached to trending topics such as cloud computing, analytics, and enterprise mobility, PAC describes the current mood on the IT market as “quite depressed”. Nevertheless, the analysts note, “these new topics are materializing in more and more projects”. The innovative segments, they say, will experience double-digit growth. Expenditure on “legacy IT”, however, will follow an opposite trend: IT managers will be looking to curb spending in this area in order to free up funds for innovation.
3. Cloud computing will drive the IT transformation
According to Christophe Châlons , cloud computing is at the heart of the trend to shift budgets from standard to innovation topics – in terms both of infrastructure and of applications – as enterprises strive to reduce the total cost of IT ownership and intensify industrialization and standardization. To gain maximum benefit from software-as-a-service (SaaS), IT bosses will call on consultants for assistance: after all, it is essential for applications from the cloud to interact with each other and with the legacy IT infrastructure.
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4. CIOs under pressure to cut costs
Last year, PAC interviewed 1,500 CxOs from more than 20 countries to find out about their current priorities. They named the pressure to reduce costs and manage their budgets more efficiently as their toughest challenges. And, as Châlons points out, this pressure will have intensified further still, since the survey was conducted last summer.
5. Innovative IT, including Big Data and M2M, will fuel the digital transformation
The swing toward increased use of cloud computing is not just the result of cost reduction and efficiency pressures. What the PAC survey also revealed is that cloud computing offers the agility and speed required to implement new applications. Other enabling technologies are also accelerating innovation, according to PAC. These include Big Data and machine-to-machine communication (M2M).
6. IT decision power shifting to business users
The general feeling is that business departments will increasingly make their own decisions about IT investments in the future – without involving the IT department at all. The CMO is often cited as a prime example of this trend. In fact, Gartner is predicting that, in a few years’ time, marketing executives will actually be managing larger IT budgets than CIOs will. This development will happen because SaaS is so simple to purchase and to deploy. However, Christophe Châlons points out that the transformation will be slower than is often assumed. Apart from a few lighthouse projects, deal sizes for these topics have so far been on the small side. Many business users, he says, are still struggling to garner business benefits from these new concepts.
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7. Cloud and mobility solutions give rise to new requirements for IT security
Cloud and mobility solutions are giving rise to new requirements for IT security in the enterprise. PAC predicts that businesses’ willingness to spend more on IT security will grow – particularly since public debate surrounding the NSA affair brought home to them the importance of data protection. The CxO survey confirms this expectation: The respondents named security as their number-one priority, ahead even of topics such as mobility, CRM, and Big Data. This ties in with the analysts’ finding that CxOs plan to double the use of SaaS, triple the use of IaaS (infrastructure-as- a- service), and quadruple spending on Big Data in the next two years.