Executive Perspective—In conversation with Crawford Del Prete

Crawford Del Prete is the senior vice-president of IDC’s communications, hardware, services and software. He joined the research firm in 1989 and at that time began coverage of the Winchester disk drive market. Del Prete received IDC’s James Peacock award for research excellence and was also voted “most valuable” storage analyst by a panel of his peers.

Computing Canada: How would you characterize where the IT industry is in terms of recovery post dot-com bust?

Crawford Del Prete: When you look at economic data, it says we’ve actually been in a market expansion since 2003, so we’re in our third year. In 1997, ’98, ’99, we were running anywhere from 10 to 12 per cent annual growth. Big dot-com collapse, we end up contracting down to minus seven per cent growth.

By 2005, we recovered . . . to about five per cent growth and we’re expecting to be in that five to six per cent growth.

The change is the new normal is a maturing industry. Telecom, which is a lot more mature than IT, is trailing off, and that’s going down to about three per cent growth.

What you’ll see going forward is a nice healthy upgrade cycle. You’ll see significant units, declining prices, which means smaller revenue growth, but what you’ll also see is consolidation — fewer and fewer suppliers, just like we’re seeing it the automotive industry.

CC: Are you seeing small- and medium-sized enterprises taking greater advantage of technology today?

CDP: Many people believe in software as a service where it’s more of a subscription model. So, how does a pet store get connected, or create a CRM (customer relationship management) database? How does a small group of lawyers create a database or a payroll system? As the modules get easier to subscribe to and easier to consume, you’ll see small business move. The problem is reaching these people is still very expensive. You can do it through advertising and by giving them subscription models, but at the end of the day you’re still trying to teach someone who sells pet food how to use a CRM database, and you have to really appeal to the job that person wants to get done. That means the offerings are going to have to become micro-segmented, and that translates to expensive.

CC: What’s the key to reaching this market?

CDP: The key is really using local heroes. The idea is that there are people on the ground, building trust, building a relationship with these people. It’s putting the tools in the hands of these local heroes to direct them to an online database or a tool that’s going to help them increase their cash flow. Some of these local heroes can grow up to become big companies.

CC: What are top IT priorities for business in 2006?

CDP: In every survey we do security comes out No. 1, and it’s quite wide. It’s physical security, authentication, making sure I’m giving the right access to the right person at the right time.

We’re seeing a real renaissance of business intelligence — help me make sense out of the data I have. It’s moving down to the mid-market as well — BI tools for less sophisticated users.

Content management is obviously huge — how do I manage my content, do a better search? How do I take some of the tools out there and do a better job of managing my content?

Mobility is also huge, the ability to make people productive while they’re on the road. Not technology for technology’s sake. Take Research in Motion’s BlackBerry, for example. What made RIM so successful was that it clued into the job that people wanted to get done: Secure mobile messaging.

As a service, ERP (enterprise resource planning) and CRM, we’re seeing a lot of interest in, “how do I do a better job of portfolio management?” So, things such as server consolidation, application management, management of virtualization — all of those things are happening, as well as classic stuff such as CRM.

Wireless is the final trend we’re seeing in terms of, “how do I think about the money I spend in my wireless infrastructure and my fixed infrastructure and how do I bring those things together?”

CC: What are your views on service oriented architecture? Is it the next big thing or will it take years to see the benefits?

CDP: It’s a tough story to tell. It is going to take a long time. It’s a journey, not a destination. Where were we four years ago? Four years ago, we were talking about Web services. SOA is an evolution of Web services, let’s face it. Being able to retool some of the custom apps I have, to be able to fit into more of an architecture that is more of an easy-to-use, guaranteed access kind of environment.

CC: Do you think business is getting tired of making huge investments in “integration” technology that never quite hits the mark?

CDP: I think if it had been a colossal failure the first time, there would be very little credibility. But I don’t think it was. The question is always how much tweaking and internal programming am I going to have to do as an end user? What’s different this time is that there are a lot of modular tools out there. If you’re a large enterprise and want to build something from the ground up, there’s a lot you can do with SOA.

CC: What is the main difference in how business are investing in technology today versus five years ago?

CDP: In the last few years, we saw a big pullback, and (companies saying), “I don’t want to spend, I’m not interested in significant IT investment.” What we’ve seen in the last two years is, “how can I strategically reinvest and and where can I reinvest in order to start to grow again?”

So, the CIO definitely has a seat at the table. CIOs can talk credibly about mergers, investing in new business, changing the product management processes, and those sorts of things. Whether you’re looking to outsource new aspects of the business, people didn’t think about outsourcing, whether it’s using IT to figure out, “how do I make my order-to-cash cycle, order-to-delivery cycle more effective?” Those kinds of areas are getting a reinvestment.

So I’ve definitely seen a shift toward “invest to get better, to increase our benchmark versus others,” and people are willing to spend on IT do to that.

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Jim Love, Chief Content Officer, IT World Canada

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