Gartner Updates Annual IT Spending Forecasts

The world's leading information technology research and advisory company Gartner has recently issued updated forecasts for the global IT spending. According to the new estimates, the worldwide IT spending will grow 7.1 percent this year to US$3.7 trillion, which is 1.5% higher than previously anticipated (Gartner’s previous forecast was of 5.6 percent). The growth is largely attributed to cloud migration and increased spending on software and IT services.

Below we also summarize the spending forecasts as to the IT segments:

• Hardware spending is expected to grow at a rate of 11.7 percent to $419 billion (this is slower than last year's growth rate of 12.1 percent).

• Spending in the software and IT services segments is largely driven by the growing adoption of public cloud services and software-as-a-service. On a percentage basis, spending on IT services will more than double, growing by 6.6 percent to reach $846 billion. Last year, spending on IT services totaled $793 billion, growing only by 3.1 percent. Software spending is expected to grow by 9.5 percent year-over-year to $268 billion, Gartner said.

• Spending on telecommunications will increase to $2.1 trillion, growing year-over-year by 6.9 percent.

Source: Computerworld

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Cloud Market to Reach $121 Billion in 2015

According to research data, the cloud services market has already surpassed $37.8 billion and is continuing to grow towards $121.1 billion in 2015.

The continual growth of the cloud market is absolute related to the explosive development of “end products”. It is expected that due to universal mobile device usage, the number of total internet users will increase to 10 billion in only another 10 years. With industry needs and each national government’s promotion, it can be said that cloud computing has truly entered its stage of growth.

IDC’s recent report further reaffirms the growth in the virtualization space. As per IDC, with shipments of virtualized servers growing at a compound annual growth rate (CAGR) of 14% from 2009 to 2014, it is expected that the robust growth in server virtualization will continue through 2014 as datacenter adoption is increasingly considered mainstream in mature economies and as organizations in emerging regions look for datacenter efficiencies. With datacenter consolidation, along with the rise of cloud computing, virtualization and virtual desktop infrastructure, more and more computing power and data itself are moving into virtual world.

The prospects of the cloud market are looking promising, attracting investment from many different sources, so at this time, everyone can acknowledge that using cloud computing will allow data transmission to become quicker and more easily managed.

Source: Global Services

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Eastern Europe to Dominate the IT / ICT Outsourcing Space

Eastern Europe, already a popular and trusted nearshore location for continental Europe outsourced functions, is sweepingly ramping up as a hotspot for global players luring more and more software outsourcing contracts. Just consider the latest activity in the region: Wipro opened its development center in Budapest (in December 2010) and chemical producer Celenase has recently contracted IBM to run its financial shared services center in Hungary.

So what are the driving forces that make the Eastern European region so attractive? A shift in economic patterns, rise in tertiary occupations, improved FDI and government initiatives (lowered tax rates) to promote trade, and improvement of national fiscals are the underlying factors for increased ICT and are the major drivers for IT services and software development. Eastern Europe also ranks high in terms of work ethics and cultural sensitivity, adding to the region’s attractiveness as a base for outsourced activity.

And of course not to forget about the cost advantage. According to the industry experts, the cost advantage offered by Central and Eastern European firms to nearshore and offshore buyers is comparable with that offered by China.

Summing up, it is now highly likely that Eastern Europe will move out from being an ‘emerging destination’ to a ‘key destination’ for IT outsourcing activity. The region is expected to experience a new surge of demand from Western Europe and at the same time gain a ‘hard to ignore space’ on the world arena in the coming years.

Source: SourcingNotes

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Top 10 Mobile Technologies to Watch in 2010/11

Gartner has identified 10 mobile technologies that will evolve significantly through 2011, and as Nick Jones, vice president and distinguished analyst at Gartner, says these “10 mobile technologies should be on every organization's radar screen".

So, here we go:

• Bluetooth (3 and 4). Two new Bluetooth versions will emerge by 2011: Bluetooth 3 will introduce 802.11 as a bearer for faster data transmission, and Bluetooth 4 will introduce a new low-energy (LE) mode that will enable communication with external peripherals and sensors.

• The Mobile Web. More smartphones will appear in the world market and that will encourage greater numbers of people to access conventional websites on mobile devices. So, mobile applications will eventually be as important as web pages are today.

• Mobile Widgets. Widgets provide a convenient way to deliver simple, connected applications, especially those involving real-time data updates (such as weather forecasts, e-mail notifications, marketing, blogs and information feeds). They can also be a good first step to assess the demand for an application on a specific platform before undertaking expensive native development.

• Platform-Independent Mobile AD Tools. Even though platform-independent application development (AD) tools cannot deliver a "write once, run anywhere" equivalent to native code, they can significantly reduce the cost of delivering and supporting multiplatform applications that provide a more sophisticated experience than the mobile Web and operate outside signal coverage.

• App stores. They will be the primary distribution channel for mobile applications and a commercial channel to sell applications and content (especially in international markets), and they will provide new options for mobile application sourcing.

• Enhanced Location Awareness. By the end of 2011, over 75 percent of devices shipped in mature markets will include a GPS. GPS will be the primary, but not the only, means of establishing handset location. Wi-Fi and cell ID systems will remain important in situations where GPS is unavailable or unreliable.

• Cellular Broadband. Continuous improvements in wireless broadband performance in 2010 and 2011 will increase the range of applications that no longer require fixed networking, and make cellular broadband a more effective fallback when fixed connections fail. Embedded cellular networking will become a standard feature of many corporate laptops, and will enable new types of network-connected devices and business models, such as e-books and media players.

• Touchscreens. Emerging as the dominant user interface for large-screen handsets? Touchscreens will be included in over 60 percent of mobile devices shipped in Western Europe and North America in 2011. Organizations developing native handset applications may need to exploit single and multitouch interfaces and haptics to give their applications a compelling and competitive user experience.

• M2M. Many network service providers increased their commitment to machine to machine (M2M) in 2009, so a good range of both national and multinational M2M service options will be available in mature markets during 2010 and 2011.

• Device-Independent Security. This isn't strictly a single technology, but refers to a collection of security technologies, application technologies and sourcing options that enable the provisioning of applications that are secure, but less tightly tied to specific devices and platforms, and that, in many cases, do not require security tools to be installed on the client.

Our 2 cents: mobile applications are becoming as critical as corporate websites for a number of reasons. They provide unmatched user experience to the increasing community of owners of powerful smartphones and other mobile devices. Marketers will keep leveraging the proximity, both physical and emotional, of mobile devices, first and foremost smartphones, to place their products closer to buyers. Predictions about which platform (iPhone, Android, Blackberry, Windows Mobile, or something new we haven’t yet heard of) will take the lead in the coming two years are more difficult to make, but it’s evident that mobile application development market has a very bright future ahead.


Source: Gartner

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Banks Find Tech Talent in Eastern Europe

Barclays Capital has unveiled their plans to recruit 500 IT professionals for a new tech centre in the Ukraine.

BarCap is teaming up with EPAM Systems, the largest and most experienced software engineering services provider in Eastern Europe, which will build and operate the new tech centre in Kyiv. It already employs 50 engineers, but by the end of 2012 that figure will rise to 500. The jobs being created in Kyiv are fairly high-end development roles.

Obviously, it's not a new phenomenon for banks to look to Eastern Europe for IT functions. BarCap itself already has a technology center in Prague, as has Commerzbank captured Czech’s advantage in outsourced software development, Poland is a preferred destination of Citigroup and UBS, where both run their service centers. Deutsche Börse also shifted some 270 tech roles from Frankfurt and Luxembourg to Prague in March.

BarCap has cited strong local technical talent and analytical skills available as the primary motivation for the move.

“Obviously, as it's still a developing country, salaries are likely to be substantially less in the Ukraine, but this is not the only issue," says Rajeena Brar, consultant at IT think-tank Pierre Audoin Consultants. "It allows them to make better use of a global delivery model and there's also a huge pool of innovative IT talent in Eastern Europe that banks are keen to gain access to."

Source: efinancialcareers.co.uk

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ITO Firms in CEE Prioritize Security of Clients’ Data

Risk mitigation in IT outsourcing engagements has become a hot topic recently. It was scrutinized in a recent Everest Group’s whitepaper titled "Emerging Markets Suppliers: A valuable Lever for Risks Diversification" providing a list of recommended, “must-know” vendors in 6 ITO destinations that compete with India. Central and Eastern Europe (CEE) was represented by its leading full-cycle software services provider EPAM Systems.

At a webinar earlier this year, Everest announced their outsourcing market forecast for 2010, where they stated that in a recovering economy the key ITO vendors would transform their approach in order to shift more risks away from the clients.

With delivery models and contracting structures being updated and adjusted to the buyers’ needs and expectations, the leading service providers keep investing into safeguarding their customers’ information. After the assessment of its multiple CEE development centers for the SAS 70 Type II requirements, EPAM took the lead in security in the CEE’s ITO industry. Last week the company announced that it had also received ISO/IEC 27001:2005 certification for its Information Security Management System (ISMS). The scope of the certificate is “Outsourced software development in accordance with the latest version of the Statement of Applicability.”

"This certificate demonstrates EPAM’s dedication to protecting its clients’ information assets and addressing security concerns by defining and maintaining the strictest security policies and verifying their adherence by recognized industry standards. “ISO 270001:2005 and existing SAS 70 Type II certification combined continue our position of leadership in security for our industry and region and are vital parts of EPAM’s global strategy,” stated Balazs Fejes, EPAM CTO.

László Adlovits, Country Manager at Det Norske Veritas, said: “During this process, it was clear that EPAM surpassed the required level and showed a mature and well implemented information security management system."

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