Which Technologies Getting Most Investment Dollars?

Ann All

Ann All spoke with John Longwell, vice president of research for Computer Economics, which just published its Technology Trends 2011/2012 study. In it, Computer Economics examined the maturity levels and growth rates of 16 technologies, providing a glimpse into how quickly emerging technologies are being adopted and how deeply more-established technologies and strategies are penetrating the market. The study is based on a survey of 253 organizations worldwide with annual revenue of at least $50 million, conducted during the second quarter of 2011.

 

"In this environment, we think organizations are shying away from big, disruptive changes. They are focusing on making their data centers more efficient rather than on outsourcing their data centers."


John Longwell
VP of Research
Computer Economics

All: ERP is the most widely deployed technology, and organizations are investing in it at a higher rate than any of the other technologies in the research. This confirms what I've heard from multiple sources over the past few months. So I'm curious: How does ERP fare in meeting organizations' expectations for ROI and TCO?

Longwell: ERP systems are still big and risky. That is the nature of large enterprise software deployments. More than one-third of the adopters find total cost of ownership higher than expected. That's a sizeable number, so we rate the risk as high. The ROI experience is better, but not spectacular. We rate it moderate. Companies need ERP because it is a platform for so many business processes and applications, such as business intelligence, but the ERP systems are really part of the infrastructure. You need to have it and there are lots of opportunities to continue investing in the systems, but it's a cost of doing business.

 

All: Three technologies are in your moderate investment/moderate adoption category: software-as-a-service, unified communications and legacy system renewal. You note that system renewal is an ongoing effort and that not all organizations have legacy systems, meaning it's likely to stay in this category. But what about SaaS and unified communications? Have they shown movement compared to past studies? Do you expect them to move into the high adoption/high investment category?

Longwell: SaaS and unified communications continue to show growth year-over-year both in terms of adoption and positive economic experience. There seems to be some moderation in UC investment this year, but we think that is just a pause. Organizations have brought UC capability into their organizations, but haven't implemented a lot of the functionality yet. We anticipate steady, continuous uptake for both of these areas. The economic experience of the early adopters is just very positive.

 


All: Your research seems to show organizations investing in the cloud at the application level, but not so much at the infrastructure level. Again, any changes there relative to past studies? Any predictions on how this might change in the coming months?

Longwell: Very few organizations today are placing infrastructure in the cloud, less than 20 percent. That hasn't changed much from a year ago. The adoption level is still relatively low. In this environment, we think organizations are shying away from big, disruptive changes. They are focusing on making their data centers more efficient rather than on outsourcing their data centers.

 

All: Can you share with me the highest and lowest performers in the ROI and TCO categories? I'd be interested in your takes on those.

Longwell: In this study, we rate software-as-a-service as having the most positive economic characteristics. Total cost of ownership is proving to be very predictable, as you might expect, and the number of organizations reporting positive ROI is high. At the other end is tablet computers. Organizations are finding they cost more than anticipated and they are not certain whether there is any return. It may be that they are being acquired as communications devices for executives without regard to vertical applications, which is where you'd find the real ROI pop.

 

All: Did anything in the study strike you as surprising?

Longwell: There were a few surprises. Last year we were seeing strong uptake for desktop virtualization. This year, the adoption trend seemed to level out. Perhaps organizations are just being very cautious and not venturing into emerging technologies. Or perhaps initial deployments are proving a little more difficult than anticipated. The technology is still showing very positive economic characteristics, however, so we continue to believe this will be a long-term area of growth and investment.



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Sep 27, 2011 4:43 AM THOMAS GELO THOMAS GELO  says:

What do you think the top 3 to 5 initiatives Financial Services will undertake this coming year?

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Sep 27, 2011 5:33 AM John Longwell John Longwell  says: in response to THOMAS GELO

Our research  indicates the top three areas for investment by financial services and insurance firms will be CRM, Enterprise Collaboration, and Business Intelligence. Looks very customer focused.

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