The coming cloud - April 30, 2008

I attended the IBM Public Sector briefing this morning. The IBM executives were clearly basking in a financial performance glow. After ending 2007 with increases in revenue, profit and earnings per share, IBM also turned in an impressive 1Q’08. This being a partner conference, a big highlight was the fact that 36% of IBM’s revenue came from partners. The first quarter saw a 15.5% year-on-year growth of partner channel revenue. The public sector business saw a 19% revenue growth. Looking into the future, public sector spending is expected to grow 4.8% in 2008 with over $1.5T in revenue opportunity through 2011. The big industry trends affecting the government customer are:

1) Changing demographics
2) Globalization
3) Environmental concerns
4) Societal relationships
5) Threats to social stability and order; and the
6) Impact of technology.

As far as technology goes, “Cloud Computing” is now the wave of the future. According to Frank Gens of IDC, the IT industry’s future is being shaped by disruptive customers, disruptive solutions and disruptive industry partnerships. Of particular note to me was his view on the “mash-up” of enterprise social networking and information. According to his studies, 14% of enterprises have already deployed social networking environments while 27% of these enterprises plan to do so in 2008. The proliferation of these collaboration platforms on top of the 10x growth in information over the next five years will result in “Eureka 2.0”, which I took as his description of an explosive use of Web 2.0 technologies within the enterprise.

Linking this back to my earlier blog, Mr. Gens also described a move to what I would describe as non-traditional solution platforms. In this world of open computing, instead of choosing between Microsoft or IBM, future IT infrastructures will be built on top of a Google or an Amazon platforms. In order to meet constituent expectation and budget constraints, Government 2.0 will also need to leverage this cloud.

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