Gartner: Some Silver Linings in IT Clouds

Despite adverse climate, Chambers says Cisco is growing; not afraid of Dell.

ORLANDO, Fla.—A recovery for IT is not in sight; neither is the next big technology revolution. So the only thing to do is get back to basics and deliver what value you can to your organization. That was the message that emerged after the first day of Gartner Inc.s annual Symposium/ITxpo here.

"Theres no compelling technology mandate in the next 12 to 18 months," said Gartner analyst Audrey Apfel in her presentation, "The Business Value of IT," on Monday. With nothing like the PC revolution, the dot-com revolution or the Y2K crisis, "technology is one option competing against other options" for the attention and budget dollars of business managers, she said.

Gartner CEO Michael Fleisher opened the conference warning, "We want to hear the recovery is just around the corner. Theres a danger of wishful thinking." But he urged against a passive reaction to the dilemma: "Its time to take things into our own hands and move forward regardless of the environment."

One proactive approach was proposed by several Gartner analysts, who outlined what they called the "Real-time Enterprise" in the mornings keynote presentation. The analysts advised attendees to find the critical business processes at their companies and then try to reduce the time it takes to complete them. A key tool in the process is an enterprise IT architecture that can "evolve and deal with change," said Gartner analyst Darryl Plummer.

On the more practical side, Fleisher urged attendees to take advantage of the current buyers market and renegotiate existing contracts where possible. The economic climate will continue to work in IT users favor for only another 12 to 24 months, he said.

Such measures can help get IT back into the good graces of their companies upper management. Thats because of a credibility gap that opened up in the wake of Y2K and dot-com spending sprees. "Often, the benefits of IT have been oversold," said Gartner analyst Barbara Gomolski.

But that will not keep IT pros out of corporate boardrooms, Fleisher noted, predicting that by 2005, 80 percent of CIOs will report to the CEO of their company, up from 50 percent today.

The Vendor Side

The hard times will mean radical change in the ranks of the IT providers. "There will be no broad-based recovery in 2003," Fleisher said. "Many vendors will fail or see structural changes. Fifty percent of brand names will be gone in 2004." If that werent bad enough, the survivors will have to content themselves to the modest growth rates, 10 percent, say, for strong companies, of a mature industry.

The star guest of the mornings presentations, Cisco Systems Inc. CEO John Chambers, said he is looking for about that amount of growth for Cisco, but that will translate to a company that is 50 percent to 100 percent larger five years from now. He stressed the notion that vendors and users fortunes are linked. "The good times for IT vendors will turn up when business for our customers turns up." For now, however, sales dont come easy. CEOs are the most cautious hes ever seen.

Gartner analysts Joe Blaylock and Mark Fabbi queried Chambers about Dell Computer Corp.s entrance into the networking hardware market, but the leader of the networking industrys most successful company expressed little fear. "This is the fifth wave of competitors weve faced. We will compete with Dell also. Most of our competitors end up being partners or being acquired. Michael [Dell] ought to remember that," said Chambers, gaining guffaws from many of the several thousand attendees in the keynote hall at the Walt Disney World Dolphin hotel.

As for Ciscos own initiative in storage networking equipment, he said, "Its 50-50 well be the No. 1 player."

More Gartner Symposium/ITxpo Coverage: