The IT industry and its market dynamics are becoming embedded within underlying economic business cycles and developments, with new constituencies of IT buyers and suppliers emerging and truly global processes for the development and delivery of technology being established.
This is according to Will Cappelli, research VP at Gartner, speaking at the METAmorphosis 2005 conference on the East Rand yesterday.
He said the IT industry had come of age, following decades of being framed by a relatively simple relationship between manufacturers of broad portfolios of hardware and software products, and the IT organisations of Global 2000 firms.
"Historically, multi-product IT firms and Global 2000 IT organisations were jointly responsible for more than 80% of the revenue flow volume. Now, the IT market has evolved to a complex network of value flows, linking many more distinct constituencies," Cappelli commented.
Cappelli`s co-presenter, Rakesh Kumar, also a Gartner research VP, highlighted a "pivotal change" in the current value of hardware, software and services - the latter now experiencing most investment in the global IT market. This is in contrast to a few decades ago, when investment in hardware held the top spot.
This, he said, was driven by change in the demand-side dynamics within the IT industry, with most IT product and service firms investing in solutions aimed at small or midsize businesses (SMBs).
On the other hand, changing corporate buying patterns also mean Global 2000 companies demand a closer alignment of their IT operations with corporate objectives and business needs, Kumar added.
Cappelli pointed to new buying centres entering the IT scene, claiming that a profound understanding of SMB requirements and needs had become a prerequisite for market success, and IT vendor strategies must consider consumer requirements.
He said market conditions were framed by government institutions, and IT vendor strategies must react to government policies, directions and sourcing decisions.
Kumar and Cappelli also drew attention to the effects of IT workforce globalisation within the new "IT ecosystem", saying offshore outsourcing is the beginning of what constitutes a major trend towards IT workforce globalisation.
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