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Four IT trends to watch

COMMENTARY--A critical part of investing in IT is knowing the optimal path from your current technology base to the next generation of IT products and services.
Written by Dan Farber, Inactive
COMMENTARY--A critical part of investing in IT is knowing what's on the horizon that could potentially impact your plans.

You don't want to be on the bleeding edge, but at least you can chart the optimal path from your current technology base to the next generation of IT products and services.

Our IT Radar, for example, tracks what enterprises expect to spend on IT within the next 24 months. In networking, for example, VPN, Wireless, and VoIP are the dominant themes among the 500 IT executives we polled last month.

At Gartner's Symposium ITxpo 2003 last week, the research firm's analysts consulted their crystal balls, looking at four macro technology trends, and offered some recommendations to IT executives as follows.

Re-examine your sourcing of portal software
Portals are becoming as commonplace to corporate workers as a browser is to Internet users, but the landscape of vendors is changing dramatically. By 2005, portal functionality will be baked in as part of enterprise applications, application platforms (such as BEA WebLogic and IBM Websphere) and a new class of enterprise suites that merge portal, collaboration, and content management features. By the end of this year, Gartner predicts that major application and platform vendors will squeeze out or swallow the smaller players.

The message from Gartner is that if you currently use a best-of-breed portal from a smaller vendor, don't plan on it for the future. The bundling of portal functionality with bigger footprint applications and suites simply points to the reality that plug and play components based on open standards doesn't mean that many vendors will flower. Reducing the number of vendor relationships an enterprise has to manage is a helpful outcome of this consolidation, but it will likely result in less innovation in portal software over time.

Evaluate use of RFID tags for your enterprise
The age of bar codes is coming to an end. Long live radio frequency identification (RFID). Gartner pinpoints 2012 (with a .6 probability, which not means maybe yes, maybe no) as the year RFID will have widespread adoption in the supply-chain world and become commonplace in consumer applications, such as locating lost items.

By 2006, basic RFID chips will cost less than 5 cents, allowing for life-of-the-product tracking and in-depth identification that captures the history and state of an object, according to Carl Claunch, a vice president and director of research in Gartner Research.

"Clever businesses will develop value-added services that can be offered based on the RFID information to generate incremental profit from customers over the entire useful life," Claunch said.

Warehousing, distribution and retail operations can gain speed and cost advantages from the new technology, which doesn't require line of sight like bar codes. However, RFID will require investment spending, and that cost issue could slow down adoption, Claunch said.

The Department of Defense is using RFID as part of its just-in-time logistics to manage 270,000 cargo containers carrying supplies throughout the world, include the current conflict in the Middle East. DARPA is developing "smart" sensors for deployment on the ground, sea and air, and attached to bodies, buildings, and vehicles. The sensors would be networked to detect and track threats, as well as for weapons targeting and area denial.

In the commercial space, Gillette, Wal-Mart and U.K.-based supermarket chain Tesco announced earlier this year a plan to install specially designed shelves that can read RFID chips embedded in millions of shavers and related products. Benetton is outfitting labels with RFID-enabled chips that will indicate where a garment is in the inventory process or within the company's 5,000 stores.

Look to leverage WLAN hot spots
Gartner predicts that by 2007 about 120,000 WLAN hot-spot gateways--up from an estimated 20,000 this year--will exist worldwide and that revenue from WLAN hot-spot users will surpass US$9 billion, up from about US$1 billion in 2003. Always-on connectivity at hotels, airports, restaurants, convention centers and other public venues will be an expected service. Gartner's prediction assumes that the security issues related to wireless LANS will be overcome sooner than later.

Hilton Hotels & Resorts, Borders Group and McDonald's, for example, have all announced pilot projects to provide WiFi access. The cost structure needs to be worked out, but hot spots will provide low-cost or even free broadband access for users.

Ericsson will build 5,000 public Wi-Fi "hot spots" across the United Kingdom for wireless Internet access, including Inspired Broadcast Networks (IBN) 3,000 digital game terminals. Notebook maker Toshiba announced a deal with Accenture to build up to 10,000 hot spots across North America this year.

Another inidication that WiFi has momentum is Intel's promotion and alliance efforts linked to the launch of its Centrino wireless technology.

Cometa Networks, a company financed by Intel, IBM and AT&T, will market its services to business users in an effort to build a wireless broadband network, its chairman said.

With all the hot spots sprouting up around the globe, one of the more vexing problems will be enabling international roaming, similar to how cellular phone service coverage is handled and billed. For enterprises, the promise of almost anytime, anywhere connection will offer more flexibility for mobile users, and an almost always available online presence that will require usage guidelines and VPNs to ensure sufficient security.

Consider if the IT utility model is suitable for your enterprise
Gartner's notion of an IT utility is an IT services company-such as hosting services, application service providers (ASPs)--that sells IT services, often on a pay-for-usage model. The research firm predicts that by 2006, subscriptions to IT utilities as a viable alternative to acquiring and owning IT systems could rise from 15 percent today to more than 30 percent of enterprises. The market for utility services in North America is expected to grow from US$8.6 billion in 2003 to more than US$25 billion in 2006.

This trend is certainly a major thrust of initiatives from IBM, HP and other major players. Part of the concept is delivering IT services-hardware, software, provisioning, and maintenance--like electricity. Simply plug into your service provider, start the meter running and pay for only what you use.

The utility model is certainly compelling, but not every IT function would benefit from it. Similar to outsourcing, the trick is to figure out what functions need to be more closely managed and which can be treated like a commodity service for which the company gets no competitive advantage from ownership or management control.

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