Some predictions for 2006

At around this time, it seems to be pretty much mandatory for IT analyst firms to offer predictions for the coming year. Although at MWD we like to try and do things a little differently, we couldn't stop ourselves. So below is our take on some of the trends, topics and technologies that we think will have an important bearing on our own area of interest – the challenge of IT-business alignment – throughout 2006.

[Note: this is quite a long entry.]

Application architecture will become more confusing, and more important

The shift in focus of automation within enterprises – away from automation of established, mature day-to-day operations, and towards supporting management and strategy-setting activities and those processes which reach outside the organization – is driving change in the ways in which people, processes and information have to interact. Change is occurring not only in the "process support" layer, via ideas like service oriented architecture (SOA) and new approaches to business process management (BPM). It's also occurring in the "information management" layer, via master data management (MDM) and information integration technologies; and in the "user experience" layer, via the emergence of a variety of "rich client" web-based technologies and the increasingly blurred lines between user interface and document format technologies.

These three changes will start to heal three fractures that have long leached value from enterprise IT: the fracture between the management of structured and unstructured information; the fracture between the automation of structured and unstructured business processes; and the fracture between the desktop and the web user experiences. At the heart of this fundamental "healing process" is one core technology: XML.

In SOA, there will be a much greater focus on business value

In 2005, SOA was a very hot topic – and it will continue to be so in 2006. However as organisations start to grapple with significant SOA deployments and go beyond pilot projects focusing on using service-oriented concepts to improve application integration, they will start to need much more help in ensuring that their initiatives aren't just cool, but deliver real business value. Too much industry focus has so far been on the "bottom up" aspects of SOA – principally, on standards and platforms for helping organisations use web services technologies to improve integration. Not enough attention has been paid to the "top down" aspects of SOA which really drive business value – how can a group of services best be designed so that they represent real business requirements? How can the lifecycles of services best be managed to ensure that business expectations are met? And so on.

2006 will see much more attention being paid to initiatives like the OASIS SOA Adoption Blueprints Technical Committee, which aim to bring together and formalise some of the SOA best practice knowledge that exists in the industry.

User experiences and information access will be key areas for innovation and disruption

2006 will see continued change in the ways that software functionality, structured and unstructured data are all presented to "users" (whether they be people or other programs). More and more mainstream software products and online services will take advantage of technology advances to offer semantically-rich yet open interfaces that blend the advantages of tagged document markup, rich graphics and interactivity, platform-neutrality and automated deployment to create experiences that erase the historical technology boundaries that have separated desktop applications and online services; and rich UIs and structured documents. The result will be challenging for a number of IT industry incumbents, not least Microsoft, which have built their franchises on being able to control the user experience and delivery channel for software applications.

We saw with the emergence of the web and its associated technologies – HTTP, XML, the browser – how it shaped the expectations of employees and customers alike, driving enterprises to invest in browser-based delivery mechanisms, enterprise search technology and so forth. As the web moves into its next phase – Web 2.0 anyone? – enterprises will come under similar pressure to deliver similar experiences. Many of their traditional suppliers are likely to be found wanting.

Suppliers will continue to shift away from traditional product licensing

2005 has seen a number of changes, in both technology and sourcing, which have challenged vendors' enterprise software licensing models. Virtualisation, multi-core processor architectures, open source subscription licensing and software-as-a-service delivery models have lead customers to question the applicability of the traditional, per CPU/user/server perpetual licensing model. In parallel, many IT organisations are looking to position themselves as service providers to their business stakeholders.

Vendors, such as IBM, Oracle and Microsoft, responded to the technology changes in 2005 with tweaks to their existing models. However, changes in sourcing strategies pose a far greater challenge. Microsoft's struggle to engender significant support for its Software Assurance subscription model is a case in point. The vast majority of enterprise software suppliers' business models and sales and marketing strategies have been finely tuned to the one-off, up-front license sale with annual support and maintenance. Vendors such as Sun, which admittedly have less to lose, have taken bold steps with their per-employee licensing model but this an exception, rather than the rule. IBM, with its Gluecode acquisition, and Microsoft, with Office Live, are taking tentative steps, particularly in terms of meeting the needs of the SMB segment, but this is only the start. 2006 will see enterprises of all sizes applying pressure on their suppliers to provide more predictable licensing models, which reflect value as it is delivered, rather than potential value when it is installed.

IT supplier acquisitions will continue at the same rate as in 2005

2005 has seen a number of mergers and acquisitions between mid-sized and large IT suppliers; and a whole host of acquisitions of small specialist suppliers. Throughout the year we've tracked Adobe-Macromedia; CA-Concord; BEA-Plumtree; Attachmate-WRQ; Oracle-Siebel; Sun-SeeBeyond; IBM-Micromuse; and many others.

2006 will deliver a similar number of invited marriages and surprise elopements. As the client-server and web-based application platforms and technologies on which today's IT giants made their fortunes passes into the territory of late adopters and laggards, those customers prefer the advantages of "one throat to choke" over the potential innovative power of smaller, quicker suppliers. Of course, at the same time, the emergence of a new web-based "software as service" application architecture (as described above) is catalysing a new wave of small innovators: many of these, too, will make tasty snacks for the likes of IBM, Microsoft, CA, Oracle, SAP, BEA, Compuware, Mercury and other billion dollar-plus suppliers.

Virtualisation will become more sophisticated and will deliver more strategic value

Virtualisation has been a significant focus for enterprises and public sector organisations in 2005. Whether explicitly, in terms of server and storage virtualisation from the likes of EMC, HP, IBM and Microsoft, or implicitly, in terms of service-oriented approaches to application development and integration, organisations have been turning to virtualisation in its various guises to grapple with the complexity and heterogeneity of their IT infrastructure. However, virtualisation remains a largely siloed proposition.

2006 will see vendors which span those silos begin to enunciate integrated virtualisation propositions, which position virtualisation as an architectural approach to the delivery of IT services. To have any credence, these propositions will have to be backed up with architectural advice and guidance, together with the automation, management and monitoring solutions, required to harness the virtualised data centre. This will pose challenges for the likes of Oracle and SAP, who will face increasing pressure to ensure that their application solutions are capable of exploiting this virtualised environment. Fusion and ESA are a step in the right direction, but there is further work to do to facilitate application provisioning, management and monitoring, together with changes to their licensing models.

IT process automation and improvement will drive spending and attention

There has been a significant focus in enterprises and public sector organisations in 2005 on IT process automation and improvement. Interest in frameworks like ITIL and COBIT are just two symptoms of this. These concerns will attract even more attention in 2006, as IT spend management and value justification add fuel to the drive for formalisation that has in many cases been initiated by regulatory and corporate policy compliance requirements. Leading organisations will look beyond the scope of ITIL to consider how all their key IT management processes can be addressed in a systematic way.

Related to this, software and application quality issues will move higher up development shops' lists of priorities as experience of web-based application technologies continues to mature and the challenges of operating complicated, multi-tier, distributed applications in heterogeneous environments become even more apparent – and as organisations getting to grips with SOA look to manage services throughout their lifecycles.

Once more, "open" will be a buzzword to watch out for and be wary of

2005 was the year when the big IT industry incumbents – particularly IBM, SAP and Oracle – started to realise the potential opportunities and threats presented by the open source software movement, and react to attempt to engage with development communities in new ways. IBM's conversion has been the most high-profile and thorough, but "openness" is finding its way into more and more vendors' marketing pitches.

As was the true when "open systems" were all the rage in the late 80s, 2006 is going to be a year in which organisations will have to carefully scrutinise vendors' claims to openness. The value of a great developer platform and developer programme has long been known (just look back at the value Microsoft got from all those developers building VB controls in the 90s) – and it's too easy to make a straightforward developer programme and make it sound like an open community development effort. There will be lots of bandwagon jumping in 2006, as IT suppliers of all stripes try and convince their customers and prospects – and commercial software developers – that supporting open innovation models is a "tick list" feature and nothing more. 2006 will show that this is far from the case.

The identity management market will remain a hot-bed of activity

2005 saw significant activity in the identity management market, driven by a combination of factors, particularly regulatory compliance, SOA approaches, growing concerns about identity theft and national identity card initiatives. The leading infrastructure, application and enterprise management vendors responded, with the likes of BMC, HP and Oracle, following the likes of CA, IBM and Sun, and acquiring identity management specialists in 2005 to bolster their capabilities in the enterprise market. At the same time, we saw ongoing development in grass roots identity initiatives such as Light-Weight Identity (LID), OpenID and Yadis (Yet Another Decentralised Identity Interoperability System!), together with offerings from vendors such as Sxip Identity, focussing on user-centric identity. The Liberty Alliance continued its work on federated identity standards, converging its work with that of OASIS with SAML 2.0, and branched out into other areas, such as strong authentication and social networking. IBM and Microsoft, meanwhile, continued to evolve the WS-* identity specifications, submitting WS-Trust, WS-SecureConversation and WS-Security Policy to OASIS.

2006 will see no let-up. Acquisitions will continue in the enterprise identity market (with SAP entering the fray), as the major vendors look to fill out their "suites", in areas such as federation, strong authentication, role-based access control and virtual directory capabilities. These vendors will continue to position their suites as more comprehensive, integrated and so forth, whilst feverishly working behind the scenes to ensure that the technology lives up to the promise. The sterling work initiated by Kim Cameron of Microsoft with the "identity metasystem" will continue with the growing realisation of the need to bridge the gap between enterprise and user-centric identity. The dual paths for federated identity standards will (sadly) persist, with the WS-* family receiving a boost as Microsoft customers begin to adopt Active Directory Federation Services as part of the latest Windows Server 2003 service pack and InfoCard materialises as part of Vista towards the end of the year. IBM has a foot in both camps, which together with the "identity metasystem", holds some promise for convergence/interoperability. posted by Neil Ward-Dutton @ 2:08 PM 0 comments permalink