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IDC predicts IT disruption in 2006

Analysts believe tech companies need to perform a 'gut check' as the new year approaches, and learn from Google and the open source community
Written by Graeme Wearden, Contributor

2006 will see moderate growth in IT spending, which will push many vendors into taking the plunge and developing some disruptive business models.

That's the view of analyst group IDC, which published its predictions for the coming year on Thursday.

IDC predicted that global spending on IT would grow by 5.5 percent in 2006. Coming on the back of 6 percent growth in 2005, this will force more technology companies into offering IT as a service, predicted Frank Gens, senior vice-president of research at IDC.

"A critical new ingredient we'll see [in 2006] is the acceleration of disruptive business models; 'open innovation' in IT product and service development — the open source effect — and online delivery of IT as a service — the Google effect," said Gens in a statement. "These disruptive shifts will force most vendors to perform a strategic gut check as they enter the year."

The "Google effect" that Gens describes will be prompted by the fear that the search giant will dominate more markets in the years ahead.

"While much of this disruption will be years in the making, and will be over-hyped in 2006, the more important impact of 'Google as a disrupter' will be as a spur for traditional suppliers to disrupt themselves before competitors do. This will be evident in enterprise applications, information management and IT services," said IDC.

Gens also believes that open source-like collaboration will grow in popularity.

"Most of the big market share leaders in IT — e.g., Microsoft, IBM, Oracle, SAP — got that way by keeping tight control over their own product development. The go it alone model of innovation is an endangered species in the IT industry, and incorporating a community-based innovation model — e.g., open source — is quickly becoming an important ingredient for market leadership. In 2006, IDC believes that building more open innovation communities will be a big focus for IT leaders — including Microsoft," predicted the analyst firm.

2005 has seen a clutch of acquisitions, from Adobe's merger with Macromedia to eBay's purchase of Skype and Sky's takeover of Easynet. IDC expects that this trend will continue in 2006, as few vendors have finished reshaping themselves.

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