2016 will be a difficult year to call for the European IT businesses – any of the usual linear progress in the IT industry in 2015 as a result of more powerful technologies was distorted by special factors such as cloud, security and the economic situation and its impact on dollar/euro pricing.
According to a new report by IT Europa, 2016 will see further major changes in vendors and channels, with legacy vendors facing a bleak future unless they take major steps. As IDC has already indicated. Customers want more, be it in data and analysis, security, cloud apps or guidance. Channels may struggle to keep up. As one expert puts it: “The channel’s ability to pivot its business models to work with a wider range of technologies and commercial delivery models limits the way it can meet this demand.”
Some firms may leave the business completely, under pressure from the new demands placed on them, while others look for dramatic growth through acquisition. Consolidation in the channel will continue, with some signs that firms are getting a clearer understanding of what the M&A market needs to help put a price on their businesses.
With Software-Defined-Everything (SDE) storming across the industry, companies, already under the hammer from customer’s existing demands, will find key resources in short supply. Performance, security and staff recruitment and retention are identified as the three main headaches for the IT industry in 2016.
- As economies recover, IT spending will rise, but this may get diverted into aspects regarded as essential such as security.
- Security issues will make headline news, so expect customers’ concerns to continue.
- EU legislation is moving at a snail’s pace; we don’t hold out much hope for change
- Channels will consolidate – driven by the need to raise capital to invest, lack of available skills, plus the wall of new money looking for a home through IPOs etc.
- Expect distribution to continue to expand its portfolios, especially in security, while fulfilling its role of recruitment and providing cloud management and contracts.
- Big Data will start to affect everyone, not just the obvious big data users and vendors; there is a real shortage of expertise here, however
- Watch for smaller IoT projects: While large transformative Internet of Things (IoT) projects grab headlines, an increasing number of IoT projects are smaller in scale, less expensive and less risky, says TBR. Wearables might finally come through as part of IoT.
- Analytics and big data will drive the market: Today, only 1% of all apps use cognitive services; by 2018, half will, say researchers. Essentially, analytics will be embedded in every application, used to facilitate functionality or convenience.
- Predictive Analytics will be big, but means high demand for IT-based business specialists able to define the rules which can encode the models.