According to Gartner, investment in the cloud will increase by 18 percent yearly through 2016, although it will still only make up 5 percent of total IT spending.
In its latest forecast of IT spending in 2012, Gartner has slightly improved its outlook for 2012 over last quarter’s predictions. Instead of an increase in spending of 2.5 percent, Gartner now expects 3 percent growth for 2012. Despite this adjustment, the growth rate is still well below 2011 numbers.
Feeling the financial crisis
For enterprise software, the outlook has taken a slight turn for the worse since Gartner announced its expectations last quarter. In April, Gartner was predicting 5 percent growth in this area for 2012. Now, it has reduced that number to only 4.3 percent. Spending for IT services, on the other hand, is on the rise. Here, an increase of one percentage point over last quarter’s figures to 2.3 percent, can be noted. Telecommunications is another area experiencing growth. Instead of only 2.2 percent, Gartner now predicts a 3 percent increase in spending.
One of the hottest areas for investment, according to Gartner, is public cloud services. In this area, analysts predict an average yearly growth of 18 percent through 2016 – much higher than the 4 percent increase in total IT spending that is expected for the same time period. Despite this rapid growth, a mere 5 percent of all IT spending will be allotted to the cloud.
Gartner releases its IT spending forecasts on a quarterly basis. The next one will come out in September.
Let’s keep a little perspective. Apple still sold 26 million iPhones in its fiscal Q3, up 28% year-over-year, worth $16.2 billion, up 22% year-over-year. The strongest challenger to the iPhone, Samsung’s Galaxy S III smartphone, has been sold 10 million times two months after launch, but that was after months of pent-up demand and stellar reviews.
The normally overexcitable stock market is certainly keeping its collective head. As of mid-day, Apple’s stock is only down 5% on above-average trading. You’d think after what you read on Techmeme yesterday that AAPL would look like this:
Some are blaming Europe for iPhone weakness. But if you’re going to point to a region, point to China, where sales fell 28% to $5.7 billion in Q3 from $7.9 billion in Q2.
People forget that Apple hugely ramped up iPhone sales in China at the beginning of the year. It launched the iPhone 4S at Apple Stores in Beijing and Shanghai in January. January/February is when Chinese New Year occurs, when workers get their annual bonus (usually at least several months worth of pay) plus several weeks of vacation. It’s really the closest equivalent to Christmas, with lots of gift giving. And what better gift for a young urbanite than an iPhone?
Also, Apple officially began offering iPhones via a second carrier partner, China Mobile, at the end of Q2. With 129 million subscribers on its CDMA network, China Mobile is like the U.S.’s Verizon. As a result, its iPhone shipments in China in fiscal Q2 were up 5x year-over-year. Yes, 500%. And don’t forget that China is Apple’s second largest market in the world.
Virtually, all of the $2.2 billion sequential revenue decline, was due to iPhone sales in Greater China and about half of that $2.2 billion is attributable to changes in the channel inventory not the underlying sell through of the iPhone.
No, let’s blame the euro crisis or the housing market or Obama/the Fed because that’s trendier.
For my other argument, I’m going out a little on a limb, using circumstantial evidence, albeit what I consider strong evidence.
There is no doubt that enterprises are buying up iPhones. Not being brought in by BYOD – that’s more of a tablet/iPad phenom – but being bought up by IT and deployed as a standard device, often replacing BlackBerries.
For instance, Good Technology reported today that among users of its MDM software, the iPhone dominated Android, with 62% share vs. Android’s 37% share of smartphones.
Or as Cook said:
We estimate that the number of iPhones in the Fortune 500 has more than doubled in the past year…PepsiCo has deployed thousands of iPhones with an in-house app build specifically for their field merchandisers. This app has eliminated paper reports and provides real-time information to managers, sales teams and delivery drivers.
German insurance provider ERGO has built an in-house app for iPhone that thousands of agents use to process insurance claims, which has significantly reduced paper work and improved processing time and customer satisfaction.
The good thing about enterprise deployments is that they are huge. The bad thing is that CIOs and IT managers are savvier than your average consumer (slap yourself on the back if you’re in IT). You know exactly when smartphones are introduced, and the effect of timing on refresh cycles and Total Cost of Ownership (TCO). And you are plugged into the rumor mill about the iPhone 5, as evidenced by your reading this and other blogs.
It doesn’t take that many Fortune 500 CIOs to wait for the iPhone 5 to cause enterprise iPhone sales to become unfavorably “lumpy” for Apple. If this is a significant factor, I don’t think Apple would admit to it, as it would show a crack in the façade of broad enterprise embrace of the iPhone.
Any readers working in IT who want to confirm or disconfirm that this entered into your decisionmaking about whether or not to deploy iPhones this quarter?
Still, I think the broad narrative holds true – enterprises are still embracing the iPhone. But as it becomes a significant segment for Apple, expect Apple to experience more seasonality in sales as enterprises try to time their buying and refresh cycles to gain maximum TCO.
10. Does compliance ‘chase the bus’, or is it part of strategy-setting and initiative decisions?
In many organizations, managing compliance is an afterthought. The decision is made to expand into a new country, deliver a new product or service, without serious consideration of the potential implications of ensuring the organization is at all times compliant with applicable laws and regulations. Compliance personnel may, at best, be informed of the decision so they can initiate efforts to ensure compliance. At worst, they find out late and have to “chase the bus” to try and catch up and get on board.
Ideally, compliance requirements, risks, and related costs and opportunities are considered when strategies are established and related projects and initiatives planned and executed.
This questions should be considered in conjunction with #4, which talks to the potential fragmentation of compliance – which can lead to duplication of effort as well as gaps in coverage.
This question is simply a variation on the perenniel riddle: Can I get something faster, cheaper and better? Or expressed in culinary terms: Can I have my cake AND eat it, too?
Normally, the answer would be: no effin’ way. Need an app fast? Then expect to pay top dollar for top gun programmers. Want it cheap instead? Then outsource it to some low-bidding offshore firm. Just don’t be surprised if communication problems and inexperience cause things to go awry. Want the best, richest app possible? Then plan upfront to spend lots of money and time.
In light of that, Finley’s answer is surprising: “it is possible” for companies building mobile apps to have it all.
“Building better apps that folks find engaging and compelling has a lot more to do with how you design the app, than about the technology you use,” he said. “My favorite consumer app in the world is the ATM machine. The ATM I use looks like it has a 3270 green screen with one ‘Submit’ button. But the reason I love it is because it gets me cash and it’s not difficult to use. And that has a lot of value to me.”
While I’m the last person to advocate for the return to ugly, limited WAP apps, Finley’s ATM example makes a good point: the best apps don’t have to use bleeding-edge technology and flashy features to make them great. They just work – well.
Apps only need to be rich enough to get the job done. Features and data shouldn’t be gaudily displayed for display’s sake. Rather, hide them in the background until the user calls upon them. Think of it like a BMW sedan that can hum along at 55 mph until you depress the gas and then it zooms up to 120.
But in the rush to gamify enterprise apps and fill tablet dashboards full of twiddly knobs and colorful icons, some developers are ignoring what Apple taught all of us: less is more (ironically, post-Jobs Apple seems to be forgetting this lesson, too).
Time To Think Clearly Lets You Solve Business Problems Faster
I think that’s driven by the arms race in mobile development platforms, each trying to best the other with the latest feature.
That isn’t conducive to letting you build fast, inexpensively and better – at least not all at once. Rather, instead of something that lets your devs deploy the latest trendy UI, what about something that makes connecting to deep back-end data sources easy? Or something that integrates the twin tasks of managing and deploying apps AND devices? Something that, as SAP’s Poonen put it, “can insulate you from back-end complexity” as well as the confusing, fragmented mobile device landscape.
In other words, something that lets you focus strategically on the business problem, rather than the tactical, technical minutiae?
Because that gives you time for clear thinking and planning, which always beats flashy-but-non-integrated technology.
This is the philosophy espoused by SAP and those behind its SAP Mobile platform. I can’t tell you exactly what our latest announcement, scheduled for July 30th, is about, except to say it is another step forward towards a unified platform that enables holistic enterprise mobility management while also offering you a menu of cutting-edge features (just not the bleeding-edge ones).
Check out this preview video, which namechecks four SAP partners involved in the coming news: Above Border, Adobe Systems (PhoneGap), Sencha Mobile and Appcelerator.
11. Does the board receive timely, quality, reliable, current, and useful information to advise on strategy, monitor executive performance, and function effectively?
Survey after survey, including Bridging Board Gaps, have identified the flow of timely, complete, and useful information to the board as one of the greatest challenges to effective governance. Richard Beattie, in that report, is quoted as saying “Boards only know what the CEO and CFO tell them. Nothing more. This is a significant problem.” Olivia Kirtley commented that “Information is the lifeblood of effective governance.”
Striking to the heart of the problem is this quote from Bridging Board Gaps:
“Many governance problems have arisen from poor management decisions, hidden and often compounded through inadequate information disclosure to the board….. However, if the board relies solely on management reports, the risk is that information may be incomplete, filtered, or edited, even in good-faith ways.”
Best practice is for transparency and trust between the board and executive management. Management does not hold anything back, nor wait for perfect information to inform the board. The board has established and management understands expectations for what should be provided to the directors, when, and how.
In the question, I included a number of adjectives to describe the information that the board should receive if it is to effectively advise on strategy and monitor performance:
Timely – is the information provided to the board promptly? This is especially important when events escalate quickly and timely responses are vital
Quality – does the board receive sufficient, relevant information?
Reliable – is the information complete, accurate, and unvarnished?
Current – is the information up-to-date?
Useful – is the information in a form that is clear and easy to use? Does it enable the directors to understand not only the symptoms but the causes of any issue? Are they able to get information in sufficient detail, and is the information delivered to them where they need it (e.g., using mobile technology)?