Industry Trends Driving the TSIA Research Agenda

Before finalizing the 2011 research agenda for TSIA, our research reviewed, discussed, and debated the key trends we feel are impacting technology solution providers. Over the past decade, it is clear technology providers have been faced with a myriad of challenges–everything from global economic meltdown to the commoditization and consolidation of many product markets. Moving forward, TSIA feels the waters look no less choppy. In this blog entry, I will itemize the five trends we feel are having the greatest impact on technology companies. For the complete overview of the TSIA 2011 Research Agenda, please contact me or a fellow TSIA employee directly.

Every company in existence must answer two fundamental questions:

  1. What markets are we pursuing?
  2. How will we pursue these target markets?

TSIA sees industry trends that could fundamentally change the way technology companies answer both of these questions. First of all, it is clear that traditional technology markets are changing. The following five trends are breaking down historical market boundaries:

1. Cloud Computing: This is the ongoing trend of hardware and software capabilities migrating from local locations to centralized locations. These centralized, “clouds” can easily be accessed from anywhere. This migration began over a decade ago with software as a service models (Saas), but has continued to expand to now include infrastructure as a service (Iaas) offerings like Amazon.com’s storage offerings and platform as a service (Paas) offerings like salesforce.com’s  AppExchange.

From the TSIA perspective, the cloud computing model is massively disruptive to the current business models of a majority of our member companies. Cloud computing will impact the financial, partner, and service models of many product companies.    

2. Utility Computing: Utility computing is related to cloud computing but is not one in the same. Cloud computing is the trend where IT capabilities migrate from onsite to offsite. Utility computing is the trend where IT capabilities become commoditized. This is different. Just because a software application migrates to a cloud consumption model, it does not mean the application has become a commodity. However, when an IT capability migrates to becoming a utility, customers expect the capability to be always on, easy to access, and relatively cheap to consume. Think of email and storage as two IT capabilities that have rapidly become “utilities” in the minds of many consumers and small business owners. Hence, the price points for these IT capabilities have been rapidly declining.

As more and more IT capabilities migrate into the “utility” category, technology providers will need to refresh their business models.

3. Mobility Computing: Mobility computing is where the access to IT capabilities no longer occurs through traditional desktop machines that are loaded with processing power, memory, storage, and are tethered to the corporate network. Instead, users expect to access IT capabilities from any location and from a myriad of devices, large and small.

The explosion of smart mobile devices is forcing technology solution providers to rethink everything from solution design to security to price points for solutions. 

4. Social Media: This is the phenomenon of communities leveraging technology platforms to share experiences and insights.

For technology providers, social media is not about high school friends reconnecting on Facebook. Social media is connecting customer communities in ways that technology providers cannot control. This trend is forcing tech companies to rethink strategies related to user communities, support models, and knowledge bases.

5. Rise of New Major Markets: Finally, it is very clear that as the world emerges from the most recent global recession, some of the greatest economic opportunities will not be represented by the traditional tech stronghold markets of North America and Europe.  China, India, and Brazil are but three examples where overall economic growth is expected to far outpace that of the U.S. and Europe.

Historically, technology companies have taken products and services optimized for North America, and migrated those offerings to other markets. To maximize growth opportunities, tech providers will need to launch their new products and services with the new major markets in mind—from the beginning.

So what markets are technology solution providers pursuing? That answer is being revised as the five trends outlined above play themselves out. These five trends are forcing technology companies to revisit what they sell and how they sell it. In future blog entries, I will spend time discussing these five trends in more detail and linking these trends to specific challenges being created for technology service organizations.

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