As the curtain comes down on a turbelent 2008 and with certainty in short supply, we ask two leading tech sector analysts to grab their crystal balls and give us their IT market predictions for 2009. Step forward Clive Longbottom of Quocirca and Roy Illsley from the Butler Group.

iQ:  Given the ongoing crisis in financial confidence around world markets, the last 12 months or more have, for many businesses, been a time of consolidation and re-entrenchment. That being the case what technologies do you think will transcend these issues and make a big noise in 2009?  

Clive Longbottom:  Well the first is virtualisation – but not virtualisation moving from the server to the desktops – virtualisation moving from design, development, and test and into the mainstream. There’s been a lot of talk about it, but virtualisation hasn’t been as massive in run-type environments as everybody thinks. It’s the archetypal teenage sex analogy – everybody is talking about it, but nobody’s actually doing it.   But I think we’ll now see it moving more in that direction. Microsoft has really put the cat amongst the pigeons with Hyper-V, and I think this is going to drive the overall progress of virtualisation
very, very rapidly through next year.  

Roy Illsley:  Virtualisation is definitely something that will continue to expand next year and you’ll see servers growing from the current 15% virtualised to 50% over the next 12 months. We’ll also see virtualisation moving very rapidly beyond servers to desktop applications and into areas like disaster recovery and all the value added features on top of that.   I think we’ll also see the desktop PC go through a change. How organisations use desktops and laptops will change to become much more mobile and much more focused on business need rather than the organisational simplicity of just dumping a full-powered desktop on the desk when all the user needs is word processing.     There will be much more mobile access too, with more people working from home driven by an economic situation where office space is an (unnecessary) expense and businesses look to save money. Using Hypervisor and some sort of client to connect to work, it doesn’t really make any difference what device you’ve got, so companies will start giving their people an allowance and saying “go and buy yourself a computer”. As such, home computing might be something a lot more people start to take seriously.   I think we are likely to see semi-intelligent devices coming out in the client space in the next 12 months; not the (old) dumb terminal but not the full fat client either.  

iQ:  Where else do you think we’ll see significant movement?  

Clive Longbottom:   If we take the bottom end of cloud computing, hosted systems have really begun to take hold. Look at the likes of Salesforce.com, NetSuite, and RightNow – we now trust the security around all of this. So the old attitude of the server huggers – nothing shall leave my sight – is disappearing as companies realise the business sense of (divesting some functions) outside the organisation.   I also think we’ll see a sense of reality setting in in social networking as we go beyond the “blogs are the ultimate answer to everything, everybody-twitter-and-everybody-will-listen, if you want to find the truth, go to a wiki” attitudes. This will open up a whole new area where the cloud computing vendors – the Googles, the Yahoos, the Microsofts, the IBMs – will start saying “we can help you make the most of this collaborative environment. We can provide you with the tools for open yet secure exchange of information between groups of people.”   Here, provided you understand what you’re doing and you have the right corporate procedures and rules in place, you’ll be able to go for a “wisdom of the crowd” approach. But get those little caveats wrong, and rather than the wisdom of the crowd you’ll end up with the foolishness of the fellowship.    I think market downturn will make technologies like tele-immersion video conferencing something that, (provided the various players involved can make the price a little bit more accessible – down into the lower six figures rather than the big six figures) could be phenomenally successful.    

“...I think they’re trying to get across to people that Microsoft is no longer a server- and desktop-based organisation; that if you need technology then they’re willing to provide it and that they are willing to go through a subscription model rather than a licence model.”    

Roy Illsley:  I think blades are another interesting area. I think they’ll continue to outstrip servers over the next 12 months, but the future of the blade sector is still up for grabs. There are still practical cooling issues with blades, but once they’re sorted out we’ll probably find blades becoming much more common.

I think we’ll see an awful lot more of enterprise service management too, with a range of organisational assets other than just computers being tracked as people start asking “does it have an IP address? What is it? And how
is it is being used?” 

iQ:  Which vendors do you see falling under the spotlight – and not necessarily for bad reasons – in 2009 then?

Roy Illsley:  Cisco is certainly on the watchlist because, with all this virtualisation taking place, Cisco is not going to like the fact that its hardware is being commoditised. I think we can expect to see Cisco announcing some very interesting stuff over the next 12 months.

Intel is another one to watch because obviously it is moving Hypervisor into the hardware and it has lots of venture capital. 
Clive Longbottom:   Google is still looking strong. But it does have a weak spot in that it’s still highly dependent on advertising revenues and, as we go into recession, advertising is an area that’s likely to get cut. Luckily it’s a company with deep enough pockets to be able to manage through 12 or 18 months of recession without it becoming too painful. 

iQ:  What about Microsoft though? They’re not going to take Google and Co’s dominance lying down surely?

Microsoft has realised what’s happening. Look at the way they’ve gone with Dynamics; the way they’ve gone with the software plus service. I think they’re trying to get across to people that Microsoft is no longer a server- and desktop-based organisation; that if you need technology then they’re willing to provide it, and that they are willing to go through a subscription model rather than a licence model. If you’ve got money to spend, they’ll take it
from you.

iQ:  : Which other suppliers have their work cut out in 2009?

Roy Illsley:  The recent acquisition by HP of EDS will be one to watch because over the next 12 months that could give some of their opponents a great shot at that market.

Citrix is a funny one too – can it deliver what it says it can? They talk a good talk but what will they actually deliver?
VMWare is another one to watch. Looking at its current market capitalisation it’s worth about $1bn; its parent company is worth $20 odd billion, Cisco $120bn and Microsoft circa $256bn. You look at that market and consider that the leader is a relatively small player and you have to ask the question whether, in 12 months’ time, they are still going to be there? Or are they going to be acquired by somebody else?

Clive Longbottom:  I really feel that Yahoo are the big losers in all this. If they’d allowed Microsoft to take them on then Yahoo would have ended up as Microsoft’s cloud computing infrastructure – which would have been really good for them. On their own, they’re a busted flush. Signing up with Google suggests that they’re accepting of the fact that there’s nowhere (else) for them to go. They’re therefore dependent on what is essentially their largest competitor, and I think this is really bad news for them.

In the enterprise stakes, you’ve also got Oracle and SAP who still really have got to get their act together to figure out how they’re going to play in this space. They’ve been caught between a rock and a hard place. The rock being their customers, who are saying “you’ve been promising us real SOA (Service Oriented Architecture) for ages, when’s it going to come through?”; the hard place being that if you break everything down into sets of components, where’s your licence money going to come from?

People will be able to choose whether they use Oracle, whether they use SAP or whether they use something else for certain functionality. So those companies have got struggles coming up.

iQ:  What technology might be on the starting blocks next year? What’s on the horizon?

Roy Illsley:  HP is currently researching quantum mechanics for a security device (which is apparently going to appear first in the military). I think you’re also going to see more on behavioural analysis where there will be no need for lots of rules about inputs and outputs.

The software will teach itself what it needs to know, build on that information, and make intelligent decisions for you. I think that sort of approach to information management is going to make much more of an appearance in data centres over the next five years.

Clive Longbottom:   I think that we’ll see a degree of sharing between the devices we carry around with us. If they can make devices share screens and input devices with one another, we can possibly up the battery life within each system massively. 

We’re also seeing some really interesting stuff down at the energy utilisation level. Within data centres there’s the heavy focus on rationalisation, consolidation, and virtualisation to cut down on the number of servers and
the use of far more focused cooling to cut down on
energy consumption.

There’s some fairly advanced stuff outside that as well though. Voice and video coming into the data centre for instance. A lot of the voice and video stuff is being used in security environments for applications like voice-activated door-entry. In the past those systems were proprietary with analogue video signals, but they’re rapidly becoming IP enabled now. 

IT has to be the central hub of controlling an intelligent building. I think we’ll see far more coming through from vendors like HP, IBM, the big systems integrators, the data centre companies, the design and build companies who will say we can’t look at the data centre in the absence of the rest of the organisation.