2010 CIO priorities shift to lightweight services, virtualization

Post-recession IT budgets aren't increasing, but the seeds are being sown for a different kind of IT

As businesses begin to exit the recession, priorities within IT are moving away from the large-scale enterprise deployments of the 1990s because technologies such as virtualization, collaboration, analytics, and mobile provisioned through lightweight, modular services can be deployed more cheaply, scaled quickly, and be more easily adapted, according to a Gartner report released today. And IT itself -- especially the CIO -- will become more focused on strategic activities, not just cost-cutting, both within IT and for the business as a whole, Gartner's survey of 1,568 CIOs in medium to large enterprises across the world found.

The top 10 technology priorities for 2010 are virtualization, cloud computing, "Web 2.0" collaborative technologies, networking and VoIP, analytics and business intelligence, mobile, data and document storage and management, services and service-oriented architecture, security technologies, and IT management, according to the survey.

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The top 10 business priorities are business process improvement, cost reduction, increased use of analytics, improved workforce effectiveness, attracting and retaining new customers, managing change initiatives, creating new products and services, better targeting of customers, business operations consolidation, and expanding current customer relationships.

Mark McDonald, head of research for Gartner Executive Programs, notes that business intelligence and analytics had been the top technology priority for the previous five years, but has now dropped to fifth place in favor of new technology approaches centered around flexible services and information, signaling a major shift in CIOs' thinking.

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Gartner expects IT budgets to remain essentially flat in 2010, and the bulk of spending to remain on traditional and existing efforts. The lightweight, modular technlogies that have risen to the top of the technology priority list won't account for a huge amount of spending -- yet, notes Dave Aaron, a research director at Gartner Executive Programs.

One reason is that they are cheaper to deploy than traditional enterprise apps, costing thousands of dollars not millions for the initial deployments. Another is that CIOs are still figuring out the implications of the technologies, their potential risks and benefits, and the appropriate structures and methodologies that need to be in place to effectively use them. Thus, Aaron sees IT staffs in 2010 investigating these technologies and how they might be used within IT and within the business before committing to major initiatives in later years.

A shift to lightweight, modular, scalable technologies is "exciting" for CIOs and CFOs, Aaron says, because it lets them adjust costs and resources quickly as needed -- a major shift from IT's history of investing large sums and lots of labor in large technology projects before seeing if they delivered the expected value, and being stuck with the ongoing high costs of maintenance whether or not the expected value was achieved. Of course, the lightweight, modular technologies bring their own challenges, such as integration, information security, and management, which IT is still figuring out, he notes.

The survey also finds a shift in CIOs' attention from an IT focus to a shared focus on business and IT strategy, especially in large businesses, Aaron says. In the last year, "CIOs have gotten better at helping executives see the difference" between IT strategy and the use of IT to further business strategy, he notes. Those CIOs who continue to focus on just IT strategy in isolation from the business will find that their mandate will become "all about cost-cutting."

This article, "2010 CIO priorities shift to lightweight services, virtualization," originally appeared at InfoWorld.com.

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