With worldwide IT spending expected to grow a modest 6.6% in 2007, many industry leaders will be more willing than ever to take chances, and embrace change to open up new pockets of growth. The result, according to IDC, will be a year of hyperdisruption, with many IT vendors stepping up their adoption of new business models and technologies, and crossing traditional market boundaries.
“While overall IT market growth will appear almost boringly moderate, its impact will be the opposite,” said Frank Gens, senior vice president of research at IDC. “As IT market leaders step up their relentless hunt for growth, we’ll see many disruptive shifts, with the importance of small business becoming very big, secondary economies becoming primary, software offerings becoming services, services offerings becoming software, channel-oriented players going more direct, direct players developing radically new channel strategies, and less distinction between business and consumer players and technologies.”
Against a background of moderate IT spending growth, one of the main stories in 2007 will focus on “the great disrupter” - globalization. While 2006’s hottest emerging markets (including the hyper-growth BRIC [Brazil, Russia, India, and China] markets) will continue to drive worldwide growth, a new group of countries will show their early potential as the next hot markets. In 2007, these “beyond BRIC” opportunities will be greatest in the Emerging Asia Countries, Latin America’s Southern Cone, the Middle East and NEW (North/East/West) Africa.
The search for market opportunities will also bring the “Long Tail” of small and medium businesses (SMBs) further into the forefront for many IT vendors. Here, the ability to “scale down” offerings will become critically important, and software vendors will shift their software-as-a-service (SaaS) initiatives into high gear. Further disruption will come from online and offshore services players pushing into the SMB market with innovative new offerings and becoming prime acquisition targets in the process.
IDC also predicts that services/software fusion will pick up speed. Offshore services vendors will continue to increase their footprint, swimming upstream and onshore into higher value IT and business consulting markets. To tap the mid-market opportunity, “Service as Software” offerings will emerge that graft traditional BPO services onto high-leverage, online delivery capabilities.
IDC said there will be heightened competition in the information access and management space. With customers demanding “rapid access to relevant information” as a top business requirement for IT, the major vendors will slug it out for “information platform” leadership while Web 2.0 tools will disrupt the market with “good enough” information access.
Virtualization and software appliances will reshape the infrastructure landscape, according to IDC. Already one of the most disruptive forces in the infrastructure marketplace, virtualization will shift into a new phase, delivering higher IT service levels and creating new opportunities for software vendors to create products that manage an increasingly virtualized IT environment. A key innovation here will be “software appliances” - limited function, self-contained products that are easily and inexpensively acquired and replaced.
Consumer and telecom markets will continue to churn, IDC predicts. Both the consumer and telecom markets will be their usual concoction of convergence, creativity, confusion and change in 2007. Internet video will continue to be a hotly contested online niche, while quad-play offerings from cable providers will further challenge the telcos to make a competitive response.
“These disruptions will force many market leaders out of their comfort zones, and open up new opportunities to those that choose to surf with the disruptive tide, rather than stand against it,” said Gens.
If we’re going to read and analyze carefully the predictions made by IDC, I would say it’s going to be a great year in general for the Philippines. Since most of our companies here are in the SMB bracket and with our world-class talents, we can provide better products and services offering competitive pricing. It’s a matter of determining which offerings we are going to present to the world market. This is one opportunity that all of us should grab. We have all the ingredients to make it big - we just have to focus and get our acts together.
2/01/2007
CHINDIA : The Economic Juggernaut
Nathu La Pass: Indo-China
The year gone by was what trade analysts appropriately term 'Year of Acquisitions' as many Indian Companies made successful bids for acquiring the business operations of it's rivals. The India-born Laxmi Nivas Mittal of Mittal Steels set the tone for others to follow suit ( Ahem! Skirt if that pleases you!! ) with his acquisition of Luxembourg based Arcelor. This trend shows no signs of abating this year too, as the bidding hots up for Corus with Indian Conglomerate, Tata throwing it's hat in the ring. The scene back home too was equally refulgent with IT and BPO sector holding sway. Making the world sit up and take notice of a country which was once deemed to be “The Land of Eternal Cow dung”, “The land of Snake Charmers” and so on. I'd run out of pages if I keep writing about their perceptions of India.
The upsurge of Asia in general, India and China in particular has, no doubt, fluttered many a wings and caused worry lines to appear...
It was all too obviously evident at the World Economic Forum in Davos as India and China grabbed the limelight right from the start. The delegates from various countries debated, with mixed feelings of both anticipation and apprehension, about the growing economic clout of the Asian giants.
The who's who from the world of Economics stated – albeit in a cryptic way, the feelings of suspicion and sense of threat which both the nations arouse in many Western Policy makers, politicians and entrepreneurs alike.
The forum opened with a keynote speech from the German Premier, Angela Merkel, where she offered her views about the theme of this annual forum – Shifting Power Equation – by emphasizing the 'enormous changes' that are being undertaken on a war footing in China and India. She was vocal about the emergence of the two countries as a global player in many fields which were once the monopoly of a select few countries.
“One third of the world's population are no longer observers of what's happening on the world stage, but actually players”, she said. “What we have is a completely new balance of power in the world today”.
This view was shared by many members at Davos, but was equivocally challenged by the members of the large Indian and Chinese contingent.
Mr. Zhu Min, the vice-president of the Bank of China was dismissive of the Western claims by stating that power shifting was a very vague concept.
Mr Zhu further reiterated by saying that a lot of talk about the rise of Asia in general is founded on the basic misunderstanding that manufacturing growth equates to economic power.
Indian Industrialist Sunil Mittal, who is also one of the co-chairs at the event, warned that the western propensity to mistrust rather than embrace Asian strengths carried very high risks.
Mr. Mittal eulogized the global pool of talent with 620 million people of Working age as India's greatest asset.
“The world needs to adopt to this talent, to adopt to this global pool because it's responsible, it comes out of a democratic field and from a very peaceful and diverse nation”, he said.
For a country whose founding fathers had once considered this very humongous populace as it's bane, this is a very big change in the outlook, and a good change too as we have realized that it is our human resource that has kept us in a good stead.
China too, like India, is reaping the benefits of the proactive decisions initiated by its erstwhile premiers. With rapid urbanization and almost unbelievable growth rate, the Chinese economy is showing no signs of recession and is a force to reckon with in today's world.
So the neighboring economies are on collision course, and neither can afford to overlook the other's strengths and capabilities. In such a scenario, the best way forward would be to move as a single entity, an economic powerhouse whose might surpasses that of any other. The officialdom from either sides of the border are making the right noises, well, at least we are hearing it that way! The recent visits and the signing of many pacts to improve bilateral trade is a sign of greater things to come. The opening of Nathu-La pass is also a feel good factor.
In an increasingly polarized world, many fledgling economies have to depend only on a certain U.S of A for investments and financial sops ( And be constantly subject to arm-twisting too! ), but in the eventuality of 'CHINDIA', the world will certainly have more options...
Of course, there will always be some ideological differences, but we must always work towards improving our relationship. After all, it's a win-win situation for both the nations.
- Sanketh Adiga
The year gone by was what trade analysts appropriately term 'Year of Acquisitions' as many Indian Companies made successful bids for acquiring the business operations of it's rivals. The India-born Laxmi Nivas Mittal of Mittal Steels set the tone for others to follow suit ( Ahem! Skirt if that pleases you!! ) with his acquisition of Luxembourg based Arcelor. This trend shows no signs of abating this year too, as the bidding hots up for Corus with Indian Conglomerate, Tata throwing it's hat in the ring. The scene back home too was equally refulgent with IT and BPO sector holding sway. Making the world sit up and take notice of a country which was once deemed to be “The Land of Eternal Cow dung”, “The land of Snake Charmers” and so on. I'd run out of pages if I keep writing about their perceptions of India.
The upsurge of Asia in general, India and China in particular has, no doubt, fluttered many a wings and caused worry lines to appear...
It was all too obviously evident at the World Economic Forum in Davos as India and China grabbed the limelight right from the start. The delegates from various countries debated, with mixed feelings of both anticipation and apprehension, about the growing economic clout of the Asian giants.
The who's who from the world of Economics stated – albeit in a cryptic way, the feelings of suspicion and sense of threat which both the nations arouse in many Western Policy makers, politicians and entrepreneurs alike.
The forum opened with a keynote speech from the German Premier, Angela Merkel, where she offered her views about the theme of this annual forum – Shifting Power Equation – by emphasizing the 'enormous changes' that are being undertaken on a war footing in China and India. She was vocal about the emergence of the two countries as a global player in many fields which were once the monopoly of a select few countries.
“One third of the world's population are no longer observers of what's happening on the world stage, but actually players”, she said. “What we have is a completely new balance of power in the world today”.
This view was shared by many members at Davos, but was equivocally challenged by the members of the large Indian and Chinese contingent.
Mr. Zhu Min, the vice-president of the Bank of China was dismissive of the Western claims by stating that power shifting was a very vague concept.
Mr Zhu further reiterated by saying that a lot of talk about the rise of Asia in general is founded on the basic misunderstanding that manufacturing growth equates to economic power.
Indian Industrialist Sunil Mittal, who is also one of the co-chairs at the event, warned that the western propensity to mistrust rather than embrace Asian strengths carried very high risks.
Mr. Mittal eulogized the global pool of talent with 620 million people of Working age as India's greatest asset.
“The world needs to adopt to this talent, to adopt to this global pool because it's responsible, it comes out of a democratic field and from a very peaceful and diverse nation”, he said.
For a country whose founding fathers had once considered this very humongous populace as it's bane, this is a very big change in the outlook, and a good change too as we have realized that it is our human resource that has kept us in a good stead.
China too, like India, is reaping the benefits of the proactive decisions initiated by its erstwhile premiers. With rapid urbanization and almost unbelievable growth rate, the Chinese economy is showing no signs of recession and is a force to reckon with in today's world.
So the neighboring economies are on collision course, and neither can afford to overlook the other's strengths and capabilities. In such a scenario, the best way forward would be to move as a single entity, an economic powerhouse whose might surpasses that of any other. The officialdom from either sides of the border are making the right noises, well, at least we are hearing it that way! The recent visits and the signing of many pacts to improve bilateral trade is a sign of greater things to come. The opening of Nathu-La pass is also a feel good factor.
In an increasingly polarized world, many fledgling economies have to depend only on a certain U.S of A for investments and financial sops ( And be constantly subject to arm-twisting too! ), but in the eventuality of 'CHINDIA', the world will certainly have more options...
Of course, there will always be some ideological differences, but we must always work towards improving our relationship. After all, it's a win-win situation for both the nations.
- Sanketh Adiga
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