Special Report: Crystal Gazing 2012

India, Inc will not trim 2012 IT budgets, rather it plans to spend $25 bn in FY12. There would be a strong increase in the adoption of UC and collaboration technologies. There would be a strong spending led by the BFSI, BPO/ITeS sector as enterprises continue to invest in unified multichannel communications across voice, web, social, email, IM, and chat that are proving to be necessary for providing truly customer-centric interactions, scalable infrastructure, and videoconferencing.

Delays in domestic projects will continue to be a big worry for the IT firms. With FY12 being a little tough, the Indian companies will psychologically feel they should exercise optimism with caution, although they may have reasonably good growth.

Weaker rupee will boost the IT sector profits since at a macro-level, rupee depreciation can benefit software exporters in India whose revenues are dependent on the US market; but at a micro-level, the Indian IT companies who have the exposure to foreign exchange are normally covered under forex hedging, thus the overall gain in the bottom line would be minimal.

Staying protected in the cloud is going to be one of the most imperative issues for the IT Industry in 2012. The IT security industry is at crossroads, like escalation of targeted attacks against companies, growth in the use of unsecured personal mobile devices, and cloud implementations. By the end of 2014, the penetration of cloud email and collaboration services will stand at 10% and will have passed the 'tipping point'.

The launch of tablets and ultrabooks brought about a noticeable shift from the existing categories, initiating the desire for more portable gadgets. Tablet operating systems are expected to see further progression with the introduction of Android 4.0 and Windows 8. Slimmer and redesigned versions of first-generation tablets with Tegra 3 are also probable to roll out. Tablets using quad-core chips are expected to increase in number in 2012.

Thin, light, and powerful ultrabooks are going to gain momentum.

The emphasis on touch interfaces with thinner and lighter design of ultrabooks could make this new generation of convertible laptops more desirable than the convertibles of the past few years. New ultrabooks with higher resolution displays are also likely to be unveiled.

India, as an outsourcing destination, will continue to remain the preference for the global companies. Regarding the technology trends, we see 4 major trends in the overall outsourcing industry:

Total Outsourcing: The mature customers are moving to total outsourcing via vendor consolidation, staff transfer, etc, and then in turn driving end-to-end ownership, larger portfolio, or service integration across vendors.

Decline of Outsourcing Providers: Providers who cannot offer global companies a global outsourcing solution across locations and across portfolios are bound to decline.

Impact of New Technologies: Customer interface channels will increasingly integrate mobile or social media apps within the outsourcing delivery model. Hence the way customers interact with and perceive outsourcing vendors will be affected by their ability to leverage these technologies effectively.

Cloud: And, cloud outsourcing-implementation of cloud services and cloud integration is a space to watch out for.

While no one can predict exactly how the IT services marketplace will change, we're confident that the client demand will grow very rapidly in areas such as cloud computing, cyber security, and healthcare IT.

The key highlights for 2012 from an IT services point of view are likely to be:

Enterprises Mobility Market: It will grow dramatically; we have experienced an increased demand in testing services for mobility apps, especially during 2011. With rise in the numbers of private application stores, mobility services are acting as the fuel in promoting information communication technology globally.

Adoption of 'As-a-Service' Offerings: Most of the services offered by the software vendors today will soon be offered as 'As-a-Service', because it gives cost efficiency which is acceptable to most of the customers.

In 2012, virtualization and cloud will continue to be the most-talked-about topics and we are going to notice their impact on the Indian IT Industry, the reason being shrinking IT budgets this year. Therefore the IT department will be under pressure from the Board to reduce the IT cost. Virtualization has proven to be a great tool, delivering significant cost reductions and improvement in response time for server assets, recovering an application or developing a new application.

Cloud computing, too, will be hot this year, as the major cloud vendors have invested heavily, thus generating customer interest and momentum. However there are unanswered questions and inherent challenges in adopting cloud computing, but there are some benefits too that can be the game-changer.

Thanks to cloud computing, improvements in storage, processing power, or technology-enabled innovations that weren't possible before have been made possible. Products like Facebook and YouTube were possible only because of cloud computing. Today, unlike traditional outsourcing of IT, cloud computing will provide the agility and control that traditional outsource cannot match. With cloud computing and virtualization, we are going to notice a decline in the number of private data centers, cyber security becoming a major concern, and increase in mobile computing.

In today's challenging times, technology will play a crucial role of helping business. Firstly, technology will again prove that in times of uncertainty what can be done with minimum cost and maximum efficiency. Convergence of customer prospects with vendors will play a key role, technology will drive customer-oriented programs and tools, and mobile devices will play a key role in 2012. The winners will be those who constantly strive for value and technology, which will make things easier and simpler. Customer Relations Systems, Statistical Analytics, and Omni Marketing will be future trends of 2012.

Notwithstanding the global economic slowdown experienced in the H2FY11, the growth story in data and the Indian economy continued unabated and is expected to continue in FY12. Data, considered to be growing globally at a rate of an additional 5% of all previous data every month for a fast modernizing economy like India, is probably growing even faster which is why storage will continue to be the fastest growing hardware segment.

The impressive traction witnessed by emerging technologies like virtualization, mobility, and cloud will gather further momentum in 2012. By the end of 2012, the big data phenomenon will become the buzzword.

Sectors like e-governance (security and surveillance), media and entertainment (full-motion video), and retail (consumer behavior and risk assessment at point of sale) will drive demand for big data solutions in India. Disaster recovery and network security are set to be the key challenges faced by the industry in 2012 while mid-size businesses are set to drive domestic economic growth.

A mix of natural disasters, political upheaval, and financial crisis in 2011 has prompted companies to plan for 2012 against a backdrop of economic turmoil and great uncertainty.

The top storage trends for 2012 are:

Storage Efficiency: Global economic uncertainty will require IT professionals to achieve better returns from their existing assets rather than buying new assets. There will be a greater focus on storage efficiency technologies like storage virtualization, dynamic/thin provisioning, dynamic tiering, and archiving.

Consolidation to Convergence: Consolidation will give way to convergence of server, storage, networks, and applications. Application programming interfaces (APIs), which offload workload to storage, can make the servers and memory more efficient.

Storage Computerization: Storage systems will need to become storage computers as more functions are being driven down into them. New storage architectures with separate pools of processors will be required to handle these additional functions.

Big Data: The explosion of unstructured data and mobile applications will generate a huge opportunity for the creation of business value, competitive advantage, and decision support if this data can be managed and accessed efficiently. In 2012, there will be a greater adoption of content platforms in preparation for big data analytics.

Storage Scaling: Server and desktop virtualization will increase the need for enterprises to scale up storage systems non-disruptively as physical server demands increase. Modular storage systems will need to be replaced by enterprise storage to service the tier-1 demands of virtual servers.

Virtualized Migration: Disruptive device migrations will be replaced by new virtualization capabilities that will eliminate the need to reboot.

Cloud Acquisition: Cloud acquisition, based on self-service, pay-per-use, and on demand will begin to replace the current 3-5-year acquisition cycle of products as convergence begins to create blended pools of resources.

In the past, industry leaders forecasted for long-term trends and have gone horribly wrong on the same. With the current pace of changes in the industry dynamics and technology trends, it's no mean task to forecast even for the next 12 months.

In terms of technologies, what will be hot are:

Social Media: Effective commercial usage of this powerful media will be faster than what was envisaged.

Tablets: It will be the fastest growing computing device. However we may see de-growth in other areas.

Mobile Apps: Convergence of media will be the biggest reality. More and more innovative applications would rule consumer minds. The big question would be who will win this round-Apple, Android, Microsoft,or xyz?

Big Data: Slow but certainly catching up. Awareness and applicability would increase

Virtual Computing & Storage: In this zone, serious usage should start

Miscellaneous: Risk management, compliance and governance will be the area of focus; predictable, flexible engagements linked to outcome; revenue-generating, cost-reducing projects; mergers and collaboration

Technology is changing too fast and too soon. It will be interesting to watch out this space next year, and how these predictions go!

I think 2012 will be the year where we might see the IT capex compressing but IT opex increasing. We will see more products moving towards SaaS, which will also start the movement towards public clouds. Tablets will rule the market and keep the IT security and compliance teams very busy.

Also, I think that we will see more open-source softwares in the coming year. With the government focusing on the content of social media sites, we might also see some updates in the Information Technology Act. In the area of healthcare, we have already started seeing some mobile applications. We should see some customer-facing healthcare portals and products-supporting Homecare in 2012. With video conferencing becoming a commodity item, we should also see tele-medicine area picking-up for remote healthcare. Medical outsourcing of today could grow from bare medical transcription to tele-radiology and other areas also. We will also see growth of voice reorganization based products in healthcare. Clinical Analytics is another area, which will make a small start.

Recently, Gartner had discussed the top 8 areas where the industry may focus in 2012. As per the Gartner report, the evolution of virtualization will ultimately drive companies to treat IT like a business. Virtualization is one of the most critical components being used to increase densities and vertically scale data centers. IT will also have to address things like performance/licensing.

The growth of unstructured data will create a huge IT challenge. Technologies such as inline deduplication and automated data tiering will be used to get the most-efficient usage patterns.

With power consumption getting attention, it has nowbecome clear that many systems are being highly underutilized. The focus this year will be to increase utilization per KW ofpower consumption.

In context-aware apps/enterprise mobility management, the big question here is how to do something smart to take advantage of smartphones/mobile devices.

In social networks, affordable and accessible technology has allowed individuals and communities to come together with a collective voice, to make statements about organizations

The key trend here is the fact that new application types will be developed to address mobile users, but they won't be desktop replacement applications. Still a secure, well-defined strategy needs to be put into place to take advantage of this development.

Similarly in cloud computing, we need to work towards an end-to-end visibility and economically viable solution, which may help small business segments and few applications areas for large business segments.

The world has changed a lot in 2011 and IT and BPO service providers have pursued the agenda of growth and derived mixed results.

Will technology disruptions such as cloud, social media, analytics, and mobility irrevocably alter the way value is provisioned and serviced in 2012?

While one does not have a crystal ball, it may help the organizations to think of the road ahead in a structured manner. Three imperatives stand out:

Strategic Agility: It has become more important and the locus of value creation is continually shifting. The organizations must increase their 'sense and respond' pattern to succeed.

Customer Centricity: It has become more than a fad and may distinguish the successful players from the rest of the pack

Verticalization: It may not be adequate and vendors may need to embrace 'micro verticals' as the operating units.



To deal with the above imperatives, ASPIRE is a structured methodology that may help firms to deal with these rapid changes and disruptions.

Aim and Articulate



Strategize: Clear focus, explicit trade-offs associated with the strategy, define duration of the strategy cycle

Plan: Establish a clear operational plan that will deliver the near term goals as per the strategy.

Introspect and Inspect: Set up checkpoints and toll gates to reflect; examine the market signals, disruptions, shifts in consumer buying behavior, and socio-political changes; and re-examine the assumptions made earlier while strategizing.

Realign: Fine tune the strategy in line with external and internal stimuli

Execute: The realigned plan with discipline and perseverance

As 2012 dawns, we believe that it will be the year of 'Materialization of Old Promises' by strong momentum in adoption of 3 key services/technologies-cloud services, videoconferencing, and new age naming-Brand gTLDs.

We feel that videoconferencing will truly move into the mainstream this year. Businesses will increasingly see the high value of videoconferencing, and more importantly, personal videoconferencing, as a key enhancer of collaboration and productivity. There will be significant adoption of virtual environments such as virtual desktop infrastructures (VDI) and cloud based VC services. The next phase will be on-demand videoconferencing cloud- and VDI-enabled services that are available to any business, regardless of size, delivered through infrastructure, network and application service providers. Couple this with good quality and ubiquitous 3G & WiMax or LTE and you will deliver the application on any smartphone or tablet. That will the point of EXPLOSION!

"The . will shift in 2012" I am referring to ICANN finally opening up Gtlds for anyone. Now Community/Geography applicants (.PETA/.Mumbai), Brand applicants (.TATA, .SBI, .DLF) and Generic applicants (.food, .music, .shop) can get their own TLD. The popular generic names are likely to attract auction bids in 10s of millions of dollars as internet companies and consortiums scramble for a piece of new age naming on the web. Forward looking brands and cities will surely get a piece of this for unmatched brand value and perception. This will open up the internet to huge amounts of innovation from a marketing and online branding perspective and ways in which brands and geographies manage to use this will constantly evolve.

There has been a paradigm shift from technology for voice, video, and data to unified content, communication, and collaboration services, including social media. Therefore today with technology becoming an important driving factor in our lives, it is in our best interest to acclimatize to it with minimum latency period.

Considering the large-scale investments that are happening in virtualization, it is going to help companies to lower the costs and give better utilizations of the assets whether it is server, storage, or network. Some of the potential hindrances likely to come up while implementing virtualization are network configuration, software licensing, security, and systems management. Also, information management in terms of accessibility and monitoring of information with appropriate controls, including encryption, storage, and back-up facility, cannot be ignored.

Secondly, with the amelioration of business models and evolution of business processes, companies today are embracing technologies for an effective communication and seamless collaboration. There is a surge in demand for an adequate management of information and training people on the benefits of using these IT propositions/models. However the biggest challenge for a CIO in 2012 would be business continuity and disaster recovery with minimal downtime in natural, economic, and unforeseen crisis.

The next decade-and-a-half will bring disruptions, which are unimaginable today. So here is my list for 2012 and beyond; can't predict that all of these will be applicable to everyone, but statistically, over the year, you will find some connection.

CIOs globally will continue to be challenged on operating budgets. Capital investments will become relatively easier; operating expenses will need to be controlled very tightly. Business IT Alignment (BITA) will fall-off from the priority list for many, as it will no longer be an issue. Business will acknowledge IT contribution and will work with IT to plan business goals. There will be no separate IT goals.

Attrition will not be the problem, retention will be; with economic and political uncertainty, staff will hang on to their respective jobs. CIOs will have to take some tough decisions. Clouds will be the first choice for deploying apps for the mobile workforce. The rest will continue to access applications behind the firewall. Hybrid clouds will remain experimental as CIOs figure out that it really does not save money. CIOs will no longer build data centers.

Led by consumerization, mobile devices will be out of IT control and personal devices will find a way to get inside the workplace; resisting CIOs will have to provide equivalent additional device, which eventually the business will turn down. Managing multiple screens will become a pain for the executive who will challenge IT to make it simpler. Over the next 2 years, the phone as a corporate device will thus be replaced by the tablet.

CIOs will or be forced to challenge the cost of sustaining big ERP (licenses, support, etc) as it keeps growing; alternate support vendors will gain market share. Usage will shift out from the office to using marketplace-supplied micro-apps, thereby challenging the existence of big ERP in 5 years.

Social media fatigue will set in and even marketing teams will be asked to create RoI for expenses and investments on such initiatives. CIOs will need to manage expectations around social analytics, while consultants will thrive with maturity models and make loads of money.

Big Data will remain high on hype with vendors pushing and CIOs scratching their heads if it really gives the benefits promised. Custom development of solutions will wane with an ocean of micro-apps promising to enable business processes as effectively.

FY11 saw internet hacks and online security breaches dominating the headlines.

Here are 2 major trends that I see continuing in 2012:

Penetration of Mobile Devices-Lacunae: Driven by the consumerization of IT and the BYOD trend, the mobile platforms like Android, BlackBerry, and Apple iOS are dramatically growing in terms of market penetration. India's mobile workforce is expected to grow by about 53%. According to a Forrester Research survey, 60% of the companies are enabling BYOD. With this proliferation of powerful mobile devices within the corporate environment, IT can expect even more security problems in the form of malware attacks and Trojans in 2012.

Addressing Security Threats: The various entry points that mobile devices provide into the network, including employees accessing media and content-rich applications on internet may attract malware. Businesses will need a comprehensive security plan against today's sophisticated threats that employees are unwittingly creating vulnerability to.

In 2012, the outsourced product development market will become more specialized, with ISVs seeking out outsourcing partners with specialized skills and resources to address specific pain points in their businesses, speed innovation, and reduce costs.

With the growing relevance of enterprise mobility and analytics, cloud computing, and SaaS acting as key drivers, ISVs are renegotiating contracts with their service partners. In 2012, ISVs will be looking to add rigorous SLAs to the commercial engagement model with their service partners.

With the emergence of enterprise mobility and related trends of BYOD, more companies will buy enterprise mobility as a managed service in 2012, with enterprises outsourcing their enterprise software mobility development to specialized service providers.

In 2012, cloud sourcing will outpace traditional outsourcing, with organizations sourcing complete business solutions through the public cloud using a combination of cloud applications, platforms, and infrastructure. Also, with large enterprises and SMEs investing heavily on cloud, SaaS, and mobility, outsourcing partners will provide specialist help to the customers by leverage emerging platforms, tools, and technologies in these areas.